Market movers: stocks start lower, China, oil, Rightmove, crypto

Victoria Scholar, interactive investor's head of investment, runs through today's big stories and how financial markets are reacting. 

European equity markets have kicked off the week in the red, extending losses after last week’s declines across global markets.

Initial post-Fed optimism was short-lived, prompting the worst sell-off on Wall Street on Thursday since 2020, with US futures pointing to another down day Monday.

All the major European bourses are under pressure, with the FTSE 100 trading below 7,400, driven by weakness in the miners with stocks like Anglo American (LSE:AAL), Rio Tinto (LSE:RIO) and Fresnillo (LSE:FRES) trading at the bottom of the basket following China’s softer trade data.

CHINA DATA

China’s exports in April grew by 3.9% versus forecasts for 3.2%, but sharply slowing from 14.7% growth in March. Meanwhile, imports were unchanged year-on-year, and slightly better than an anticipated 3% decline.

China’s trade sector accounts for around a third of GDP, with the slowdown in exports pointing to a deceleration of international demand. Sharp declines from the EU and US as inflation and the cost-of-living have taken their toll. Meanwhile, domestically, China is dealing with the fallout from lockdowns, with factory activity and supply chains under pressure as Beijing pursues its draconian zero Covid tolerance mission at the expense of its own economy.

OIL

Oil prices are under pressure, with WTI and Brent crude both lower by more than 1%, driven by concerns about the global economy following softer Chinese trade data overnight. However, the market remains underpinned by the prospect of an EU ban on Russian oil with talks continuing this week.

Broader bearish sentiment that is weighing on equities is also hitting the oil market this morning, spooked by concerns of a slowdown in Chinese demand and the prospect of rising interest rates around the world.

RIGHTMOVE

Shares in Rightmove (LSE:RMV) are down by more than 5%, languishing at the bottom of the FTSE 100 after CEO Peter Brooks-Johnson announced plans to step down after 16 years with the company. He has been at the helm since May 2017 and will leave in February 2023 to help achieve a smooth transition. Rightmove is now launching the hunt for his successor and said trading year-to-date has been as expected with full-year guidance unchanged.

Brooks-Johnson took the top job at a time when Rightmove was successfully growing alongside its share price. Under his tenure, the share price has gained by around 45%, faring particularly well during the pandemic as a stay-at-home stock with many browsing homes online and thanks to the stamp duty holiday.

However, it has also been expanding into mortgages, insurance, commercial property and other services helping to drive 67% growth in operating profit last year. But, like many stocks, 2022 has been extremely challenging with shares down 30% since the January high, testing one-year lows with the potential for further declines if the house market starts to peak and interest rates push higher.

CRYPTOCURRENCIES

Cryptocurrencies are under pressure, extending losses after posting declines this weekend. Bitcoin and ether are both down by around 3% against the major currencies with XBT trading close to its lowest levels of the year and down around 50% since the peak in November.

Having attempted to stage a rebound in the first quarter, April reignited the bears amid a broader move away from risk assets, which has seen bitcoin break below support at $34,000. A combination of the war in Ukraine, China’s lockdowns, concerns about rising interest rates and softer equities have left crypto complex sharply out of favour among investors, who are flocking to the safety of the US dollar and other safety assets instead.