London midday: Stocks maintain losses as miners hit by China trade figures
London stocks were still weaker by midday on Friday, with miners under the cosh following the release of disappointing Chinese trade data, while weak German industrial figures also weighed, as investors eyed the release of the latest non-farm payrolls report.
The FTSE 100 was down 0.9% at 7,093.79, while the pound was off 0.2% against the dollar at 1.3057 and 0.4% weaker versus the euro at 1.1645.
Sentiment was knocked by data released overnight showing that dollar-denominated exports in China tumbled 20.7% in February from a year ago as the trade war with the US took its toll, missing expectations for a 4.8% drop and compared to a 9.1% increase in January.
Dollar-denominated imports were down 5.2% from a year ago, versus expectations for a 1.4% decline and a 1.5% year-on-year fall in January.
CMC Markets analyst Michael Hewson said: "Despite the disappointment over the Chinese trade numbers it should be remembered they will have been hugely skewed by the Lunar New Year holiday with most of the country closed for several days, which means the numbers must be looked at in that context."
Elsewhere, figures from Destatis showed German factory orders fell 2.6% on the month in January, missing expectations for a 0.5% increase and compared to a 0.9% rise in December. The December data was revised up from an estimated fall of 1.6%.
On the year, orders were down 3.9%, an improvement on the upwardly-revised 4.5% drop in December and better than the 5.7% fall analysts were expecting. The year-over-year rate for December was revised up 2.5 percentage points.
The main focus on the macro front later will be the US non-farm payrolls report and unemployment rate due at 1330 GMT. Payrolls are expected to show that 180,000 jobs were added in February, compared to 304,000 the month before.
The unemployment rate is expected to tick down to 3.9% from 4%. Average earnings on a yearly basis are forecast to improve to 3.3% from 3.2%, while on monthly basis, the reading is tipped to be 0.3%, up from 0.1%.
James Hughes, chief market analyst at Axi Trader, said: "In light of the recent selloff, weak wages growth may be sufficient to convince the market that the fed is ready to call time on quantitative tightening. This should in turn have the ability to bolster the inflation print without resorting to talk of a rate hike and any suggestion that cheap money is coming back into circulation also has the potential to lend some support to stocks."
Investors were also mulling a report that the US and China are yet to set a date for a summit on trade.
Terry Branstad, the US envoy to Beijing, said in a Wall Street Journal interview that a date hasn’t been finalised for a meeting between Trump and China's Xi Jinping. He also said that preparations for such a meeting are not underway yet.
In equity markets, miners were under pressure on the back of the Chinese trade data, with Rio, BHP, Glencore and Antofagasta all lower.
Gambling operator GVC Holdings tanked after chief executive Kenneth Alexander sold £13.7m worth of shares in the company and chairman Lee Feldman ditched £6m worth.
Russ Mould, investment director at AJ Bell, said: "Investors are clearly spooked by this news and are also selling down. The two directors have pledged not to sell any more while they ‘continue’ at GVC. Investors may have read that statement as implying the pair aren’t going to be around that long."
Plastic packaging supplier RPC fell after saying it has agreed to be bought by plastics maker Berry Global for 793p per share in cash, abandoning an earlier offer from Apollo Global Management.
Outside the FTSE 350, shares in Debenhams were sharply higher after Sports Direct called an extraordinary shareholder meeting to remove all but one of the current board and to appoint the sports chain's founder Mike Ashley as its new boss. The department store chain said it was "disappointed" with the move.
Sports Direct shares were a touch lower on the news.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "Debenhams is in dire straits already, and so the potential for change has been received positively by the market. We wouldn’t get too carried away with what the share price move means, the stock is small and targeted by short sellers, so any sort of news tends to lead to big price swings, up or down."
On the upside, Bodycote rallied after it posted a 12% increase in full-year profit thanks to solid performances from its specialist technologies business, emerging markets and civil aviation, as it announced a special dividend.
Building materials company SIG surged as it reported a rise in full-year profit but warned that like-for-like sales in the first half of 2019 are likely to continuing declining amid "challenging" trading conditions.
In broker note action, Bunzl was hit by a downgrade to 'neutral' at Credit Suisse, while Just Eat was cut to 'neutral' at Citi. Over-50s specialist Saga saw its shares slump after a downgrade to 'underweight' at JPMorgan.