On Wednesday, the London stock market exhibited a positive turn with the FTSE 100 index soaring by 1.75%. This increase reflects a significant rally among blue-chip indices across Europe, indicating a robust day of trading despite varied economic indicators globally. The surge in London's stock market comes in light of recent trade data stemming from China, the world’s second-largest economy, which has presented unexpected results.
In July, China reported a trade surplus of $84.65 billion; this figure marks a decrease from June's surplus of $99.05 billion and falls short of the consensus estimate which had anticipated a surplus of $99 billion. A closer look at China's export data reveals a slower than expected growth rate. In July, exports increased by only 7%, contrasting the expected growth of 9.7%.
This decline is notable when compared to June's performance, which saw an 8.6% increase in exports. Conversely, China's imports showed signs of recovery in July, rising by 7.2%, a turnaround from June's 2.3% decline, and surpassing the anticipated increase of 3.5%. Economists at ING have commented on the implications of these trade figures, warning that the introduction of new tariffs could pose challenges to China's export and manufacturing sectors in the latter half of the year.
They noted, "Overall, the details from import product categories indicate that this recovery is not being driven by a recovery of household demand, but rather instead reflects the national strategy to drive growth through investing in hi-tech fields and innovation." In the UK housing market, confidence appears to be returning, with home prices experiencing a month-over-month rise of 0.8% in July.
This follows a period of stagnation in June, as reported by British lender Halifax. Turning to corporate developments, Glencore ($GLEN) saw its stock gain 2.81% after the company announced its decision to retain its coal and carbon steel materials business, receiving backing from a majority of its shareholders.
This strategic retention is viewed as the optimal pathway for maximizing shareholder value, despite the commodities trader reporting a loss in its financial results for the six-month period concluding in June, along with revenue growth during that timeframe. In contrast, WPP ($WPP) experienced the steepest decline among London-listed blue-chip companies, dropping by 1.95% at the day's close.
This downturn follows the firm's announcement regarding its exit from its strategic communications and advisory firm, FGS Global. The British advertising giant anticipates receiving total proceeds of approximately $767 million from the transaction with KKR, with plans to allocate the funds towards initiatives aimed at reducing its leverage. Furthermore, WPP confronted a year-over-year decline in attributable profit, despite a slight increase in its revenue during the first half of the year.
As a result, the corporation has revised its like-for-like revenue guidance for the full year of 2024 downward, now projecting either flat revenue or a decrease of 1% compared to the previous year's performance. As the UK market navigates these mixed signals from both local and international fronts, investors are advised to remain vigilant and adaptive to the evolving economic landscape..