HomeBusinessInvestors are dumping big Chinese stocks in a record selloff

Investors are dumping big Chinese stocks in a record selloff

Chinese leader Xi Jinping is in South Africa this week for the Brics summit of emerging economies – Michele Spatari/Bloomberg

Global investors have sold China’s flagship stocks in a record selloff, showing China’s industry leaders are falling out of favor over concerns about the economy.

Foreign investors sold 6.2 billion yuan (£676 million) to Kweichow Moutai from August 7 to 18, making China’s largest liquor producer the most sold stock through trade relations with Hong Kong.

It was followed by sales of 4.7 billion yuan each for leading renewable energy stock LONGi Green Energy Technology and major lender China Merchants Bank.

Overseas funds have fled the Chinese market, moving the equivalent of £7.3 billion in a 12-day streak of withdrawals to Tuesday, the longest since Bloomberg began tracking the data in 2016.

The exodus comes after China disappointed markets earlier this week with its latest interest rate changes.

The world’s second-largest economy is experiencing a prolonged slump in the housing market, making the CSI 300 Index one of the worst performers in the world this month, down 7%. Trading is now near its lowest level since November.

Read the latest updates below.

08:11am BST

Ithaca is going to cut back on investments in the North Sea because of windfall taxes

North Sea operator Ithaca Energy has said it will produce less oil next year as it grapples with the impact of government windfall taxes.

The company said it will cut investment “as a direct result” of the levy on excess profits triggered by Russia’s invasion of Ukraine last year.

It said it had taken a $73.7 million (£57.8 million) hit on operations in its so-called Greater Stella Area, which it blamed on windfall taxes and falling gas prices.

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Adjusted profit before tax and other charges in the first half of the year was 8% higher at $979.7 million (£768.3 million).

Executive Chairman Gilad Myerson said:

The Energy Profits Levy continues to have a direct impact on investments in the UK North Sea and on Ithaca Energy’s own investment program in its diverse, operated and non-operated high quality asset base.

We continue to work constructively with the UK Government to highlight the impact of the current fiscal regime on the outlook for the sector and on the UK Government’s energy security and Net Zero ambitions.

8:03am BST

The FTSE 100 opens higher amid broader optimism

The FTSE 100 rose on open day amid optimism over global stock markets ahead of results from the world’s largest chipmaker Nvidia, which could boost hype surrounding the potential of artificial intelligence.

The UK blue chip index started the day 0.4% higher at 7,284.46, after breaking a seven-day losing streak with a slightly higher closing price on Tuesday.

The midcap FTSE 250 is up 0.1 percent to 18,046.65.

07:49am BST

Nike CFO joins Reckitt in shaking up the boardroom

Dettol and Strepsils creator Reckitt Benckiser has announced it is bringing in Nike’s chief financial officer after current chief financial officer Jeff Carr decided to retire.

Shannon Eisenhardt will join Reckitt on October 17 as CFO candidate in succession to Mr. Carr, who will retire on March 31 next year.

Ms. Eisenhardt was Chief Financial Officer of Nike Consumer, Brand & Marketplace and previously spent nearly 20 years at P&G.

Reckitt Chairman Chris Sinclair said:

On behalf of the Board of Directors and the entire company, I would like to sincerely thank Jeff for his outstanding service to Reckitt.

He has been instrumental in driving our strategic and cultural transformation over the past three and a half years, embedding a strong capital allocation process and delivering a world-class productivity program.

Shannon brings extensive experience in the consumer and retail industry, having worked with some of the most globally recognized brands and has an impressive and highly relevant international background.

07:27am BST

Morgan Stanley fined traders for using WhatsApp

Morgan Stanley has been fined more than £5.4 million because its energy traders communicated via their private phones when discussing transactions on the market, regulator Ofgem said.

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The watchdog said traders had used private WhatsApp conversations to talk about their work, breaking a rule requiring their employers to keep all communications and hand them over to Ofgem if requested by the regulator.

It is the first fine issued in Britain under the Wholesale Energy Market Integrity and Transparency (Remit) regulation, Ofgem said.

Cathryn Scott, Director of Enforcement and Emerging Issues at Ofgem, said: “It is unacceptable that MSIP (Morgan Stanley International plc) failed to prevent electronic communications that could not be recorded or retained.

“It risks a significant compromise of the integrity and transparency of wholesale energy markets.”

Morgan Stanley

Morgan Stanley

07:16 BST

Nvidia shares hit a record ahead of results

Investors eagerly await Nvidia’s results, which will be announced after US markets close today.

The chip company’s blockbuster report last quarter rallied technology stocks and artificial intelligence hopes, boosting the S&P 500 this year.

Shares of Nvidia hit an overnight high of $481.87, with options data showing traders are expecting a larger-than-usual share price after the quarterly results.

Analysts expect Nvidia to forecast 110% growth in third-quarter revenue to $12.5 billion. Stuart Humphrey, an analyst at JPMorgan, said some predict $14 to $15 billion.

He said: “I think numbers like this are a bit high, but if it sniffs this out — you could say in this print it doesn’t matter if demand eventually declines next year — (it) will still be rated higher.”

07:11am BST

Good morning

Investors are relinquishing shares in China’s top companies amid growing concerns about the world’s second-largest economy.

Overseas funds have fled the Chinese market, moving the equivalent of £7.3 billion in a 12-day streak of withdrawals to Tuesday, the longest since Bloomberg began tracking the data in 2016.

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5 things to start your day

1) Half of all companies with debt will be in trouble by the end of this year, the Bank of England warns | Calls for additional support are growing as government bond receipts rise

2) Rishi Sunak is going to court Elon Musk after Tesla billionaire’s meetings with Macron | Efforts are also underway to lure Jeff Bezos and other ‘A-list investors’ to the flagship summit

3) Former Opec president bribed with Cartier jewelry and Louis Vuitton, alleges corruption case | The accused former Nigerian government official now lives in St John’s Wood in London

4) Meta claims a breakthrough in the search for a Hitchhiker’s Guide-style language translator | Facebook owner unveils free AI tool that can translate speech from 100 languages

5) Waitrose launches first-ever meal deal for £5 | Luxury supermarket is under pressure to win back customers with little money

What happened at night

Asian markets were mixed. Investors awaited results from technology enthusiast Nvidia to see if the industry’s high valuations can withstand a jump in bond yields, while Japan’s still dismal manufacturing data left sentiment vulnerable.

MSCI’s broadest index of Asia-Pacific equities outside of Japan rose 0.3%, staying close to its nine-month low of just two sessions ago. Japan’s Nikkei also gained 0.3%.

Data from Wednesday showed that Japanese factory activity contracted for a third straight month in August, offering the first glimpse into the health of global manufacturing this month. The United States will also report its preliminary PMI data on Wednesday, which will likely show that the manufacturing sector is still contracting.

Yields on 10-year Japanese government bonds rose to a new high of 0.675% over a period of 9.5 years as investors viewed the Bank of Japan’s decision not to step in to buy bonds as a green light for further selling saws.

In China, blue chips failed to hold on to Tuesday’s gains, falling 0.9%, while Hong Kong’s Hang Seng Index held up better, rising 0.6% after a 1% jump.

Wall Street stocks closed lower on Tuesday as higher Treasury yields fueled concerns about whether the Federal Reserve will keep rates high any longer.

The Dow Jones Industrial Average fell 0.5% to 34,288.83, while the broad S&P 500 fell 0.3% to 4,387.55.

The tech-focused Nasdaq Composite Index rose 0.1 percent to close at 13,505.87.

Yields on 10-year government bonds nearly hit a 16-year high after interest rate fears triggered a sell-off in the bond market.

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