FTSE 100: Miners Glencore and Anglo American hit by weak China data

Shares in Anglo American fell on Tuesday as China's sluggish recovery continues

Shanghai skyline at sunrise. Photo: Getty.
Shanghai skyline at sunrise: China continues its sluggish recovery. Photo: Getty.

The FTSE 100 was lower on Tuesday afternoon with China-sensitive company Anglo American (AAL.L) among the stocks weighing on the index.

At the time of writing, Anglo American’s share price was down 2.11%, while shares in other stocks with exposure to China were also trading lower, including Glencore (GLEN.L), Rio Tinto (RIO.L) and Prudential (PRU.L).

It comes as China continues its sluggish recovery this year with the latest Caixin services PMI slipping back to 51.8 from 54.1 and well below forecasts.

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“As we saw in the official survey data last week, it highlights the economy is struggling from both weak internal and external demand,” Craig Erlam, senior market analyst at OANDA, said.

Measures to support the economy have been limited and targeted so far and there's little to suggest that approach is going to change in the foreseeable future, Erlam also noted.

Meanwhile, Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said to Yahoo Finance UK that the questions about the strength of the Chinese economy are only getting bigger, especially with the latest news that another survey has hinted at a slowdown in the world's second largest economy.

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“Should China's sluggishness become more entrenched, this would have far-reaching implications for companies globally. As the largest consumer of commodities in the world, a protracted economic slowdown could spell bad news for the UK-listed mining giants who extract the materials so heavily used in China's infrastructure and expansion efforts.”

At the same time, she also highlighted, luxury goods rely heavily on Chinese spending, both domestic and from Chinese tourists spending abroad.

“While the dashboard isn't flashing red, there are certainly some warning signs starting to flag up where Chinese demand is concerned," she added.

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