Concerns over China's economic recovery cloud market trading

The FTSE 100 took an early downturn to the week after an active and volatile days trading in global markets caught up with the holiday happy traders.

Chris Bradshaw
shareprices.com - Tuesday, September 01, 2009

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Amongst the major losers were mining stocks after copper shed 3% in price following selling in the Far East. Vedanta, Xstrata and Lonmin share prices all fell with Eurasian Natural Resources falling by the most.

Oil prices fell by 4% in early week trading on concerns that demand from China was weaker than expected. However, concerns passed sending oil back to over $70 per barrel. Jitters continued and caused oil giants Royal Dutch Shell, BP and Cairn Energy to lose ground.

Banking shares also fell on wider concerns that the underlying ripples of the recession were not fully out of the system. Insurance company RSA Insurance Group suffered as weekend rumours of a possible $1bn rights issue took hold. According to reports in The Sunday Telegraph, the board were reviewing all options before launching the cash call but that they had appointed JP Morgan and Merrill Lynch to prepare the way.

Despite encouraging signs in the housing sector all the major builders share prices fell heavily. Taylor Wimpey and Barratt both dropped 4% in value.

As a result defensive stocks gained ground and tried to offset the gloom in the rest of the market. Pharmaceutical stocks rose including AstraZeneca following encouraging trails that showed a new blood thinning treatment could reduce heart attacks and strokes by 16% amongst patients. Imperial Tobacco and British American Tobacco all showed healthy gains as traders sought solace in the defensive sectors.

 

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