Asia-focused banks lead FTSE 100 lower as trade tensions flare

The blue-chip FTSE 100 declined 0.4 per cent, with Prudential sliding 9.3 per cent to the bottom of the index while HSBC slipped to its lowest since 2009. — Reuters pic
The blue-chip FTSE 100 declined 0.4 per cent, with Prudential sliding 9.3 per cent to the bottom of the index while HSBC slipped to its lowest since 2009. — Reuters pic

LONDON, May 23 — London’s FTSE 100 fell yesterday, dragged down by Asia-focused lenders after China’s proposal to impose national security laws on Hong Kong compounded trade tensions between Washington and Beijing.

The blue-chip FTSE 100 declined 0.4 per cent, with Prudential sliding 9.3 per cent to the bottom of the index while HSBC slipped to its lowest since 2009.

China’s plan also raised fears of more pro-democracy protests in Asia’s financial hub.

“Investors may have been more focused on the continued unhelpful dialogue between the US and China, hence they chose to trim some risk exposure,” said Ian Williams, economics & strategy research analyst at Peel Hunt.

The domestically focused FTSE 250, nudged 0.1 per cent higher, boosted by pub operator Marstons which surged 102.7 per cent after saying it would combine its brewing business with Carlsberg UK.

Both major indexes logged their strongest week in six, with the FTSE 100 now up more than 22 per cent from its mid-March lows, supported by aggressive stimulus measures and hopes of a recovery from a deep coronavirus-fuelled economic slump.

Data yesterday showed retail sales fell by the most on record in April, while British consumer confidence in early May sunk to its joint-lowest level since the global financial crisis.

“Data releases had little obvious impact on equity markets, which have been behaving as if April was the low point for several weeks now,” Williams said.

Transport operator Go-Ahead Group slumped 10.6 per cent after warning the pandemic would hit its profit this year.

Luxury retailer Burberry Group Plc rose 3.3 per cent after its chief executive said the company was encouraged by a “strong rebound” in some parts of Asia, having earlier reported a 27 per cent slump in comparable sales in the final quarter of its year, which ended with about 60 per cent of its stores closed.

British Airways-owner IAG fell 7 per cent and easyJet Plc was down 3 per cent with the country to introduce a Covid-19 quarantine for travellers arriving from overseas from June 8. — Reuters

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