Interactive Investor

Must read: China stocks rally, McDonald’s, UK retail sales

Our head of investment rounds up the morning's big news.

6th February 2024 08:45

by Victoria Scholar from interactive investor

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      European markets have opened higher after a surge in China overnight. The Shanghai Composite and the Hang Seng rebounded over 3% and 4% respectively thanks to stepped up support efforts from the Chinese authorities.

      This has lifted China sensitive stocks on the FTSE 100 such as Prudential which is trading up over 2%. However, BP is still the best performer on the UK blue chip index after annual earnings topped estimates despite halving in 2023 versus the previous year when Russia invaded Ukraine and energy prices skyrocketed.

      McDonald's Corp (NYSE:MCD) shares fell almost 4% in the US session after its quarterly sales fell short of forecasts for the first time in almost four years, hurt by the Middle East conflict which the fast-food chain said ‘meaningfully impacted’ performance.

      L’Occitane shares surged over 7% in Hong Kong on reports of a potential buyout bid from Blackstone. 


      According to the British Retail Consortium, retail sales grew by 1.2% in January year-on-year, down from December’s growth of 1.7%. Like-for-like sales growth also fell from 1.9% in December to 1.4% last month.

      January was a harsh reality check for the retail sector after the excitement of Christmas quickly faded, with consumers tightening their purse strings to mark the beginning of a new year and the end of the festive splurge.

      While 2024 may be the year that interest rate cuts kick in and real incomes grow, consumers are still grappling with much higher prices than they were a few years ago and higher mortgage payments on top. That’s leading to lower consumer confidence and less spending in the economy including on discretionary retail items.

      A two-speed retail sector has been emerging, separating the winners from the losers in the UK, with luxury and certain discretionary retailers struggling amid the macroeconomic headwinds while supermarkets like Tesco (LSE:TSCO) continue to thrive despite intense price competition.

      Looking ahead, the threat of supply chain disruptions, product delays and shortages following the attacks in the Red Sea is an overhang for the sector worth watching.

      These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

      Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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