Chinese stocks falls, but Glencore helps FTSE - as it happened

Graeme Wearden (earlier) and Katie Allen

from on 2015-09-07 17:06 (#KNFM)

Rolling coverage of the latest events across the world economy and the financial markets

6.06pm BST

Time for a closing summary of a day marked by more Chinese worries, burning hay bales and a shake-up for mining giant Glencore.

The FTSE 100 has edged up 0.5%, or 31.6 points, to 6,074.5 in a fairly subdued day for European stock markets with US exchanges closed for Labor Day. The pan-Euopean FTSEurofirst 300 similarly gained 0.5%.

BREAKING: European Commission farmer fund - NFU response http://t.co/uBCsyEZkCI

5.28pm BST

With two weeks left before snap elections in Greece, parties have submitted requests to participate in the poll. Our correspondent Helena Smith reports from Athens:

It's official: Athens' Supreme Court has this afternoon received submissions from 19 parties - and five coalitions - to take part in fresh elections on September 20.

5.15pm BST

Mining company Glencore has held onto its share price gains right to the close on London markets. Investors liked its plans for a shake-up to slash its debts and mitigate the effects of falling commodity prices and the shares closed up 7% at 131.8p. That followed an all-time low for the shares in the previous session on Friday.

4.43pm BST

We have news of a breakthrough in Brussels, where thousands of farmers have today been holding a protest for higher milk and meat prices. Dramatic pictures from the scene have shown eggs, hay and other missiles flying as tempers flare.

As we reported earlier, an estimated 4,000 farmers, including some from Britain, gathered in the Belgian city as European farming ministers held an emergency meeting to discuss the crisis in the agriculture industry.

European agriculture ministers have agreed to hand the industry a a500m (366m) aid package after farmers clashed with police in Brussels during protests about falling dairy and meat prices.

The European Commission said it was "well aware of the difficult situation" faced by farmers.

a500 million comprehensive package of measures to support European #farmers - detailed list: http://t.co/Vqvzw9CCKs #agri #agrimarkets

4.28pm BST

Oil prices are under pressure this afternoon as continuing worries about the economic outlook for China, the world's biggest energy consumer, weigh on crude.

As investors fret about falling demand and strong supply, London Brent crude is down almost 2.4% at $48.4 per barrel. It earlier hit a low for the session of $48.11. That is less than half a $115 peak in the summer of 2014 (as seen in this chart).

3.40pm BST

For Fed watchers, here's a perspective from Joseph Stiglitz on what the US central bank should do at its upcoming 16-17 September policy meeting - when there are still expectations it could raise interest rates despite the recent turmoil on global markets.

If the Fed focuses excessively on inflation, it worsens inequality, which in turn worsens overall economic performance. Wages falter during recessions; if the Fed then raises interest rates every time there is a sign of wage growth, workers' share will be ratcheted down - never recovering what was lost in the downturn.

3.14pm BST

Sticking with the stock market, it is a big week for the listed housebuilders in the UK.

Berkeley, freshly promoted to the FTSE 100, holds its annual general meeting and releases an interim management statement on Tuesday. As we reported this morning, Tony Pidgley, founder and executive chairman at Berkeley, is expected to face tough questions at the shareholder meeting near the group's headquarters in leafy Cobham, Surrey, after it emerged last month that his pay package last year was worth 23.3m.

The recent changes in stamp duty thresholds announced by the chancellor last year have also helped slow down house price growth in London, while at the same time helping the lower end of the market, due to the way the changes adversely affect properties over the 2m mark.

On the other hand it has also helped boost the cheaper end of the house price chain due to the cost savings made as a result of the removal of the slab based structure of the duty.

2.25pm BST

Associated British Foods (ABF), the owner of Primark discount clothes stores, is having a bad day on the stock market. Its shares are down after the group, which also owns food brands such as Kingsmill and produces sugar in the EU and China, confirmed in a trading update that profits for the year would be hit by falling European sugar prices and currency issues.

2.05pm BST

After an earlier report today suggested that David Cameron and his advisers are urging business leaders not to speak out in favour of the country remaining in the EU, we now have a response from one of the groups pushing for the UK to stay in the union.

1.22pm BST

It's been a quiet morning, I'm afraid. But here's a recap:

China's stock market has shed another 2.5% on the first day's trading since the markets were shut, for the WW2 victory parade.

Here's why #glencore made announcement - bond yields were fast approaching the dreaded BB junk status #bonds #credit pic.twitter.com/wUi8Hfn2Qo

The standoff: farmers demanding a fair price for milk VS the police protecting EU leaders @isabelleory pic.twitter.com/8TOCT1N2yR

12.53pm BST

The number of European bankers who receive more than a million euros in pay and benefits has fallen (don't all cry at once), as the EU bonus cap kicks in.

12.08pm BST

One pinch of salt is rarely enough where Greek opinion polls are concerned. But taking that as read, today's survey shows that this months election is extremely close:

Pulse for @bankingnewsgr SYRIZA 27 ND 26.5 G Dawn 6.5 PASOK 6 Potami 5.5 KKE 5.5 Cent Union 4 Pop Unity 4 Ind Grks 2.5 Undecided 10 #Greece

11.42am BST

Here's a handy chart showing how the yuan has lost relatively little value against the US dollar, compared to other emerging currencies.

#China Yuan (-3% YTD) is still relatively strong in Asia Pacific after depreciation. NZD has weakened 24% vs Dollar. pic.twitter.com/d8Yl3WuBOb

11.41am BST

European stock markets are losing their early fizz, as traders return to worrying about the state of the global economy.

The FTSE 100 is now up just 30 points, handing back half its gains, while France's market is flat.

11.29am BST

11.21am BST

It's getting serious in Brussels - riot police are now using water cannon against the protesting farmers, after one officer was hurt:

Water cannons have been unleashed pic.twitter.com/B0F6qZFHRs

There has been at least one injured police officer... pic.twitter.com/0Fa7gJCV1O

11.05am BST

Over in Brussels, thousands of European farmers are urging the EU to help them cope with falling meat and milk prices.

Tractors are blocking the roads in the Belgium capital, causing serious disruption as ministers meet to discuss the situation:

As refugees die by the hundreds - #milkmanif protestors are the ones using dead men as their symbol. #Brussels #EU pic.twitter.com/2UtK2DQY6W

There's "chutzpah", then there is "protesting outside an institution that gave you 100s of billions in free money" https://t.co/7x0oQkdqT8

Improvised device for throwing eggs at riot cops at Brussels farmer protest https://t.co/BWilpLSsFo

10.28am BST

China's recent turbulence has hurt investor confidence in Europe, as investors brace for more trouble ahead.

Research group Sentix's monthly survey of sentiment across the eurozone has hit a seven month low, weaker than forecast.

"Investors now see the slowdown in China as well as in other emerging markets as a significant burden for the euro zone's economy, which can no longer be compensated by good developments in the domestic euro zone economy or the United States."

9.56am BST

9.54am BST

Hao Zhou, an analyst at Commerzbank, predicts that Beijing will keep spending huge sums to prop up the yuan, saying:

Further intervention can be expected as China reiterates to maintain a "stable currency". However, it is not costless.

#China FX reserves drop by $93.9bn in Aug, double the pace of Jul & largest mthly drop ever. https://t.co/UoaNnL1mTT pic.twitter.com/peYz5atvQ8

9.39am BST

China has just revealed the extend to which it intervened in August to prop up the yuan during the market turmoil.

The country's foreign reserves fell by around $93bn last month, the biggest fall on record, as Beijing scrambled to stabilise the currency's value and stem capital flight.

China FX reserves at end of August: $3.56 trillion, down $93 billion. Largest monthly drop on record.

China's Foreign Exchange Reserves Fall in August: http://t.co/XxEJftuO63 pic.twitter.com/jZecUERIq8

When will the yuan drop its additional twenty percent?, http://t.co/J9O2HP0rz3

9.14am BST

China's slowdown is a serious hurdle to Britain's much-vaunted 'March of the Makers'.

Manufacturing body EEF has halved its growth forecast for this year, to 0.7% from 1.5%, citing Chinese volatility and the Greek debt crisis.

9.04am BST

European stock markets are shrugging off China's losses, all gaining ground in early trading.

The FTSE 100 is up 1%, starting the week in positive mood after last Friday's 2.5% slide. Here's the picture across Europe:

8.51am BST

Today's selloff shows that Chinese investors still fear further turbulence, despite those reassuring words from central bank chief Zhou Xiaochuan.

Not too surprising, given the People's Bank of China didn't cover itself in too much glory in recent weeks, by not acting faster to stem the turmoil.

Whilst Xiaochuan might be confident (at least publicly) that the worst is over, investors aren't fully convinced there won't be more losses to come.

It doesn't help that the PBOC's actions in the past few weeks have hardly eased the situation, meaning whatever assurances the central bank provides hardly carry the previously perceived omnipotent force of the Chinese government, a perception that was perhaps irrevocably damaged across August.

8.36am BST

Despite Beijing's best efforts, the Chinese stock markets suffered further losses today as investors returned to their seats after a long weekend break.

The CSI 300 index slumped by 3.4%, after an early rally spluttered out, leaving the wider Shanghai composite index down by 2.5%.

The risk is always that you can have further decline.

8.15am BST

After several sharp falls last week, Japan's stock market enjoyed a calmer day today.

The Nikkei gained 0.4% by the close, with the yen dipping against the US dollar (good news for exporters).

Tokio starts the week in risk-on attitude: Yen weakens & Nikkei ends up 0.4% at 17860.47 after last weeks 7% plunge. pic.twitter.com/R1tyVJ0GZK

8.13am BST

The City likes the look of Glencore's $10bn debt reduction plan.

Its shares just leapt by 11%, even though future dividends are being suspended as the company tries to get its finance into better shape.

#Glencore to sell assets, shares to trim $30 Billion debt, share up 10% pic.twitter.com/zQuq3gPtIe

8.09am BST

Speaking of turnaround plans, supermarket chain Tesco has announced the sale of its South Korean division for just over 4bn.

This is the biggest asset sale since CEO Dave Lewis took charge of the struggling retailer in summer 2014.

8.05am BST

Commodities trading giant Glencore has announced a major shake-up today, after being hit hard by the slump in commodity prices.

Amazing action at Glencore. Selling assets, cancelling the dividend, reducing debt. Any other company the CEO would be in trouble.

At the Ferrari dealership in Zug, they're weeping into their risti this morning. $GLEN #mining https://t.co/0vaw5LKtLB

7.52am BST

China's top economic planning agency helped to ward off a market crash today, by declaring that growth prospects are improving.

"The power usage, rail freight, as well as real estate prices and turnover have all improved into August, indicating the economy is stabilizing amid fluctuations."

Whether or not we have realistically seen the lows in the various Chinese markets is yet to be seen, but the belief and assurance provided by the Chinese authorities over the weekend suggests we may see better days ahead.

Of course, one day doesn't make a bull market. However, when you hear that power usage, train freight and property markets are showing signs of improvement, domestic traders listen.

7.36am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Global stock markets are on edge today, as the Chinese stock market reopens for business after a four-day break.

Our European opening calls: $FTSE 6079 up 36 $DAX 10103 up 65 $CAC 4551 up 28 $IBEX 9877 up 55 $MIB 21609 up 136

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