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Global investors have been offloading China’s flagship stocks in a record-selling streak, showing the nation’s industry leaders are falling out of favour amid concerns for the economy.
Foreign investors sold 6.2bn yuan (£676m) of Kweichow Moutai from August 7 to 18, making China’s largest spirits maker the most heavily sold stock via trading links with Hong Kong.
It was followed by 4.7bn yuan of selling each for leading renewables stock LONGi Green Energy Technology and major lender China Merchants Bank.
Overseas funds have been fleeing the Chinese market, offloading the equivalent of £7.3bn in a twelve-day run of withdrawals to Tuesday, the longest since Bloomberg began tracking the data in 2016.
The exodus comes after China underwhelmed markets with its latest changes to interest rates earlier this week.
The world’s second-largest economy is dealing with a prolonged housing slump, making its CSI 300 Index among the worst global performers this month with a 7pc loss. It is now trading near the lowest since November.
Read the latest updates below.
08:11 AM BST
Ithaca to cut North Sea investment amid windfall taxes
North Sea operator Ithaca Energy has said it will produce less oil next year as it grapples with the impact of the Government’s windfall taxes.
The company said it will reduce investment “as a direct result of” the levy imposed on excess profits triggered by Russia’s invasion of Ukraine last year.
It said it had taken a $73.7m (£57.8m) hit on operations in its so-called Greater Stella Area, which it blamed on windfall taxes and falling gas prices.
Its adjusted profits before taxes and other charges were 8pc higher at $979.7m (£768.3m) in the first half of the year.
Executive chairman Gilad Myerson said:
The Energy Profits Levy continues to have a direct impact on investment in the UK North Sea and Ithaca Energy’s own investment programme across its diverse high-quality operated and non-operated asset base.
We continue to constructively engage with the UK government to highlight the impact of the current fiscal regime to the industry’s outlook and to the UK government’s stated energy security and Net Zero ambitions.
08:03 AM BST
FTSE 100 opens higher amid wider optimism
The FTSE 100 moved higher at the open amid global stocks optimism ahead of results from the world’s largest chipmaker Nvidia, which could boost hype around the potential for artificial intelligence.
The UK’s blue chip index began the day 0.4pc higher at 7,284.46 after breaking a seven-day losing streak with a slightly higher close on Tuesday.
The midcap FTSE 250 has gained 0.1pc to 18.046.65.
07:49 AM BST
Nike finance chief to join Reckitt in boardroom shake-up
Dettol and Strepsils maker Reckitt Benckiser has announced it is bringing in Nike’s finance boss after its present chief financial officer Jeff Carr decided to retire.
Shannon Eisenhardt will join Reckitt on October 17, as CFO designate to succeed Mr Carr, who will step down on March 31 next year.
Ms Eisenhardt was chief financial officer of Nike Consumer, Brand & Marketplace, and previously spent close to two decades at P&G.
Reckitt chairman Chris Sinclair said:
On behalf of the Board and the entire company, I would like to sincerely thank Jeff for his excellent service to Reckitt.
He has been instrumental in driving our strategic and cultural transformation, embedding a strong capital allocation process and delivering a world-class productivity programme over the past three and a half years.
Shannon brings extensive experience across consumer and retail, having worked with some of the most globally recognised brands, and an impressive and highly relevant international background.
07:27 AM BST
Morgan Stanley fined over traders using WhatsApp
Morgan Stanley has been fined more than £5.4m because its energy traders communicated via their private phones when discussing transactions in the market, regulator Ofgem has said.
The watchdog said traders had used private WhatsApp discussions to talk about their jobs, therefore breaking a rule which requires their employer to hold on to all communications and hand them to Ofgem should the regulator request.
It is the first such fine handed out in Great Britain under the regulation on wholesale energy market integrity and transparency (Remit) rules, Ofgem said.
Cathryn Scott, regulatory director of enforcement and emerging issues at Ofgem, said: “It is unacceptable that MSIP (Morgan Stanley International plc) failed to prevent electronic communications which could not be recorded or retained.
“It risks a significant compromise of the integrity and transparency of wholesale energy markets.”
07:16 AM BST
Nvidia shares hit record ahead of results
Investors are eagerly awaiting results from Nvidia due after US markets close today.
The chip company’s blockbuster report last quarter fuelled a rally in tech stocks and artificial intelligence hopes, propelling the S&P 500 this year.
Shares of Nvidia hit an all-time high of $481.87 overnight, with options data showing traders are expecting a larger-than-usual swing in shares after the quarterly results.
Analysts expect Nvidia to forecast 110pc growth in third-quarter revenue to $12.5bn. Stuart Humphrey, an analyst at JPMorgan, said some are forecasting $14-15bn.
He said: “This kind of number feels a touch high to me, but if it sniffs this – one could argue that into this print, it doesn’t matter if demand will eventually decline next year – (it) still will be rerated higher.”
07:11 AM BST
Good morning
Investors are offloading shares in China’s blue-chip companies amid growing concerns about the world’s second largest economy.
Overseas funds have been fleeing the Chinese market, offloading the equivalent of £7.3bn in a twelve-day run of withdrawals to Tuesday, the longest since Bloomberg began tracking the data in 2016.
5 things to start your day
1) Half of all indebted businesses will be struggling by end of this year, Bank of England warns | Calls for additional support grow as Treasury receipts surge
2) Rishi Sunak to woo Elon Musk after Tesla billionaire’s meetings with Macron | Efforts are also underway to attract Jeff Bezos and other ‘A-list investors’ to flagship summit
3) Former Opec president bribed with Cartier jewellery and Louis Vuitton, corruption case claims | Accused former Nigerian government official now lives in St John’s Wood in London
4) Meta claims breakthrough in quest to build Hitchhiker’s Guide-style language translator | Facebook owner reveals free AI tool capable of translating speech from 100 languages
5) Waitrose launches first ever meal deal for £5 | High-end supermarket under pressure to win back cash-strapped customers
What happened overnight
Asian markets were mixed as investors awaited results from tech darling Nvidia to see if the sector’s lofty valuations can withstand a jump in bond yields, while still gloomy factory readings from Japan left sentiment fragile.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3pc, hovering not far away from its nine-month trough hit just two sessions ago. Japan’s Nikkei also eked out a gain of 0.3pc.
Data on Wednesday showed Japan’s factory activity shrank 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 flash PMI readings on Wednesday, which is likely to show the factory sector remained in contraction.
The benchmark 10-year Japanese government bond yield advanced to a fresh 9-1/2-year peak of 0.675pc, as investors took the Bank of Japan’s decision to refrain from intervening to buy bonds as a green light for further selling.
In China, bluechips failed to hold onto Tuesday’s gains, falling 0.9pc, while Hong Kong’s Hang Seng Index held up better, up 0.6pc after a 1pc jump.
Wall Street stocks ended lower on Tuesday as higher Treasury bond yields fuelled concerns over whether the Federal Reserve will keep interest rates higher for longer.
The Dow Jones Industrial Average fell 0.5pc to 34,288.83, while the broad-based S&P 500 dropped 0.3pc to 4,387.55.
The tech-centered Nasdaq Composite Index nudged up 0.1pc to finish at 13,505.87.
The benchmark 10-year Treasury yield nearly reached a 16-year high after interest rate fears triggered a selloff in the bond market.
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