It comes after world stocks slipped as tensions rose between the US and China. Investors were cautious after US President Donald Trump signed two executive orders banning WeChat, owned by Chinese tech giant Tencent, and TikTok in 45 days’ time while announcing sanctions on 11 Chinese and Hong Kong officials. Rounding out the actions, U.S. regulators recommended that overseas firms listed on American exchanges be subject to US public audit reviews from 2022.
“The bigger question for markets is whether these actions jeopardise the US-China trade talks on August 15 and markets will be looking closely for any Chinese retaliation,” said Tapas Strickland, director of markets & economics at National Australia Bank.
“The running assumption in markets has been President Trump needed the phase one deal to succeed, as much as China, this side of the November elections…
“At the same time President Trump is running a hard China line into the elections.”
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3.00pm update: FTSE stabilises after early drop
The FTSE has shaken off it’s mid-morning slump to secure a cautious rise on yesterday’s close.
The index opened at 6,032, rose to 6,095 before dropping to 6,031 earlier today.
However it has now risen slowly again and currently sits at 6,059.
12.30pm update: China performance offers hope for recovery
Share markets rose on Monday as stronger industrial activity in China offered signs it was recovering from the coronavirus pandemic that outweighed jitters over U.S.-Sino trade tensions.
Deflation at China’s factories eased in July, data showed, driven by a rise in global energy prices and as industrial activity climbed back towards pre-coronavirus levels.
Industrial output in China is returning to levels seen before the pandemic paralysed huge swathes of the economy, driven by pent-up demand, government stimulus and surprisingly resilient exports.
11am update: Cautious start for EU markets
EU markets have started slowly today, with Euronext 100, CAC 40, DAX and Swiss Market Index all reporting small rises.
Euronext is up 0.10%, CAC is up 0.44%, DAX is up 0.06% and Swiss Market is up 0.50%.
9.45am update: FTSE plummets
FTSE has plummeted in the wake of the Bank of England’s bleak update.
After rising to 6,095 this morning, it has since fallen to 6,031.
This is marginally lower than yesterday’s close of 6,032.
9.00am update: Bank of England issues dire warning
The UK economy is set to slip 9.5 percent by the end of the year – the country’s worst drop in 100 years.
While still better than the 14 percent drop initially expected, the downturn will be the worst suffered by the UK since WW1 and the Spanish Flu pandemic.
By the end of the year, the country’s unemployment could also hit 7.5 percent.
8.30am update: Bright start for FTSE
The FTSE has enjoyed a positive start to the morning, opening up on yesterday’s close.
After closing at 6,032 yesterday, the index is now sitting at 6,089.
It comes despite fears of a second coronavirus wave in the UK, after the highest rise in cases since June.
5.53am update: Oil prices rise one percent on Saudi Aramco’s optimism
Oil prices climbed on Monday, supported by Saudi optimism on Asian demand and an Iraqi pledge to deepen supply cuts, although uncertainty over a deal to shore up the US economic recovery capped gains.
US West Texas Intermediate (WTI) crude CLc1 futures rose 50 cents, or 1.2 percent, to $41.72 a barrel at 0301 GMT, while Brent crude LCOc1 futures were up 40 cents, or 0.9 percent, at $44.80 a barrel.
Both benchmark contracts fell on Friday, hurt by demand concerns, but Brent still ended the week up 2.5 percent, with WTI up 2.4 percent.
“Comments from the weekend from Aramco are the driver at the moment,” said Michael McCarthy, market strategist at CMC Markets and Stockbroking.
Saudi Arabian Aramco’s Chief Executive Amin Nasser said on Sunday he sees oil demand rebounding in Asia as economies gradually open up after the easing of coronavirus lockdowns.