The FTSE 100 beat a hasty retreat in early action on disappointing Chinese economic data and ongoing concerns over the outlook for the eurozone.
In early trade, the FTSE 100 had given up 75 points or 1.16% to stand at 6,386.7. It looks set to notch up its fifth consecutive session decline.
At 6,386.7, the index is down a hefty 5.06% for the week and off 3.81% for the year to date.
Overnight, Beijing disappointed after it revealed that China’s industrial production growth slowed in November to 7.2%. That is slower than the 7.7% increase in October and 7.5% growth forecast by economists.
Jasper Lawler, market analyst at CMC, says there is now growing investor concern that neither the Asian nor European slowdown is being met with enough central bank liquidity.
Lawler says: “With the European Central Bank holding back on any more stimulus moves until next year, if at all; the People’s Bank of China countering its easing measures with tightening measures; and Abenomics set to face the voting public in Japan, more stimulus globally does not appear as certain as it had looked just a few weeks ago.”
On the corporate front, housebuilder Bellway eased 3% after it said in a trading update for the 18 weeks to November 30 that while demand for new housing across the country remained “resilient”, its trading was returning to “a more normal seasonal pattern”, with even growth in London returning to less exuberant levels.
Elsewhere amongst the housebuilders, Persimmon was a heavy faller, retreating 3.7%.
Oils were under pressure after Brent crude fell to a five-and-a-half year low of $63/barrel, bringing this week’s losses to more than 8% against a backdrop of persistent concerns over a global supply glut and slowing global economy. In early action BP fell 1.54%, Shell gave up 1.83% and Petrofac lost 5.1%
Some of the defensive members of Footsie managed to buck the wider retreat, notably United Utilities, up 3.27% and Severn Trent, ahead 2.09%.