Today, oil prices and the FTSE 100 plummeted after China delayed announcing new economic stimulus measures.
Brent crude dropped over 4%, while the FTSE 100 declined by 1.4%.
Investor hopes were dashed when China’s National Development and Reform Commission (NDRC) did not unveil additional stimulus, leading to a significant drop in Hong Kong stocks.
The Hang Seng index in Hong Kong fell 9.4%, marking its worst day in 16 years.
In London, sectors heavily reliant on Chinese demand, such as mining and energy, faced significant losses. These sectors are crucial to the FTSE 100 and suffered due to concerns that reduced demand from China could negatively affect commodity and oil markets.
Additionally, oil prices were driven down further by concerns over Chinese demand and international pressure on Israel not to attack Iranian oil facilities.
This pressure comes in the wake of Israel’s heightened tensions with Iran, where a missile attack by Iran last week had previously driven oil prices to their highest since August. However, U.S. President Joe Biden has urged Israel to refrain from striking Iran’s oil infrastructure, fearing such actions could further increase oil prices and negatively impact the U.S. economy and the upcoming U.S. election.
Meanwhile, the FTSE 100 also suffered after Vistry, a housebuilder, disclosed that it had underestimated construction costs for nine projects. This revelation led to a temporary trading suspension of Vistry’s shares, which plunged as much as 36% after issuing a profit warning expected to affect earnings for the next three years, erasing up to £1.5 billion in market value.
