FTSE 100 Surges on Mining Recovery, But Vistry’s Profit Warning Caps Gains

After having its worst day in two months on Tuesday due to losses in the mining sector as a result of China’s refusal to identify measures to boost its economy, the benchmark FTSE 100 is now showing some gains. Homebuilder Vistry also experienced a decline after cutting its annual profit forecast.

The FTSE 100 blue-chip index (.FTSE) surged 0.45% after a one-month low, while the FTSE 250 midcap index (.FTMC) increased by 0.21% in the opening hours of the market.

As the price of base metals dropped following initial excitement about top consumer China’s stimulus measures waned, most sectors in the FTSE 350 were trading in the red, with industrial metal miners (.FTNMX551020) leading the way, down more than 5%.

Concerns that falling commodities and oil prices could be a result of falling Chinese demand impacted the market, particularly mining and energy firms, which are important components of the FTSE 100. As of writing, FTNMX551020 is traded in green with an increase of 0.15%.

A rally in China's stocks cooled as traders questioned Beijing’s resolve to add more stimulus https://t.co/m4yzSPNNFd

— Bloomberg (@business) October 8, 2024

Concerned that an attack on Iran’s oil infrastructure may cause oil prices to rise, which would harm the US economy and the US election, President Joe Biden has pleaded with Israel not to do so.

At the same time, the FTSE 100 took a knock as homebuilder Vistry admitted it had misjudged the cost of nine different developments.

After issuing a profit warning that it predicted would harm earnings for the next three years, the company’s shares plunged by as much as 24.31% on Tuesday’s close. The company’s stocks were briefly halted from trade.

The share price dropped by as much as £1.5 billion as the news broke. With a final decline of 24.3 per cent, it was the biggest faller in the FTSE 100 index. As of writing, the company’s shares are still traded in red with a decline of 1.66%.

Taylor Wimpey (TW.L), Persimmon (PSN.L), Bellway (BWY.L), and Crest Nicholson (CRST.L) all saw declines of 1.1% to 6.5%.

With a 4.1% increase, Imperial Brands (IMB.L) topped the FTSE 100.  The company announced 2.8 billion pounds in returns to shareholders and predicted a 20% to 30% increase in sales from next-generation products in fiscal year 2024.

South Korea Set to Join FTSE Global Bond Index, India and Greece Eye Market Upgrades

Elsewhere, South Korea has just overhauled its financial market infrastructure, and next year the country will join FTSE Russell’s key global bond index, opening the door to tens of billions of dollars in inflows.

India, South Korea bonds to join FTSE Russell government indexes in 2025 https://t.co/2M8a7spHxP pic.twitter.com/OYttZYfmm8

— Reuters Asia (@ReutersAsia) October 9, 2024

In addition, starting in 2025, the index provider will include India in its measure of developing market debt, based on the government’s efforts to improve market access. At the same time, Greek stocks were added to a list that might include them as developed markets, while Vietnamese stocks were kept on a watch list to be upgraded to emerging markets.

DAX Edges Up Amid Volatility; STOXX 600 Falls on Luxury and Mining Slump

DAX 30, or Deutscher Aktienindex stock market index, follows the performance of the 40 biggest and most liquid companies listed on the Frankfurt Stock Exchange.

The DAX 30 index is up 0.04 per cent from yesterday’s close, trading at 19,080.25 as of this writing. However, investors reacted negatively to contradictory economic indications and company profit predictions, putting downward pressure on the wider STOXX 600 index. At the time of writing, the STOXX 600 index was trading at 516.64, down 0.55%.

Household goods decreased by 1.47 per cent, and mining stocks fell by 4.4 per cent.

Just days after the European Union voted on electric vehicle tariffs, Chinese authorities imposed temporary anti-dumping measures on European brandy imports, sending shares of European beverage producers LVMH and Pernod Ricard tumbling.

The European Commission said it had received enough support in a vote of EU members to impose tariffs of up to 45% on imports of Chinese-made electric vehicles in the bloc's highest-profile trade case https://t.co/cbtqhwGbsD pic.twitter.com/4XZWu91nDi

— Reuters Asia (@ReutersAsia) October 4, 2024

As investors became pessimistic about the prospect of demand growth in the vital Chinese market as a result of stimulus measures, equities in the luxury and mining sectors fell more broadly.