Gains for FTSE as Chinese spending slowdown weighs on rest of Europe

London stocks recovered to make solid gains yesterday, despite wider concerns over a slowdown in consumer activity in China.

The commodity sector once again came to the FTSE’s rescue to ensure it finished in the green while its European counterparts remained lower despite lifting slightly from lows seen during morning trading.

The FTSE 100 ended the day up 46.65 points, or 0.63%, at 7,464.8 points.

“After an early dip prompted by a sharp slowdown in Chinese retail sales in April, markets in Europe have recovered to some extent from their intraday lows, however, there has been a big mismatch between how the FTSE 100 is performing and weakness in the Dax,” commented Michael Hewson, chief market analyst at CMC markets UK.

The German Dax decreased by 0.67% by the end of the session, while the French Cac was also down 0.49% due to weaker sentiment on the continent.

Mr Hewson added: “To give an indication of how badly the Chinese economy has been hit by lockdowns, the latest car sales data for April showed that no cars were sold in Shanghai through the entire month, compared to 26,311 a year ago.

“For a major exporter like Germany that’s not good news, with weakness in the likes of Porsche, BMW and Mercedes-Benz.”

On Wall Street, the main markets pulled back after traders witnessed new manufacturing data showing a drop off in economic activity in April.

Meanwhile, sterling made slight inroads against the dollar, although the US currency continues to hover near 20-year highs.

The pound increased by 0.12% against the dollar to 1.226, and dipped 0.01% against the euro to 1.177.

The price of oil had another lift as European leaders continue to put pressure on other nations to enforce Russian oil embargoes.

Brent crude increased by 1.38% to 112.75 US dollars per barrel when the London markets closed.

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No cars were sold in Shanghai through the entire month