FTSE dips on China import data but then turns around
Fiona Cincotta June 8, 2020 6:02 AM
Although China’s economy is to a large extent showing a recovery after the pandemic, import numbers are remaining stubbornly low.
Although China’s economy is to a large extent showing a recovery after the pandemic, import numbers are remaining stubbornly low. With a large percentage of China’s imports being used in products that are eventually exported, exports are likely to slow down too over the months ahead. This is not good news for companies with a significant China focus which are already hurting from a decline in domestic sales.
London opened a touch lower on the news and was further weighed down by a decline in AstraZeneca and Smith & Nephew, but then reopening optimism took over and the index started turning around.
Travel industry shares were the best performers, with cruise operator Carnival leading the pack.
On the surface of things airlines should still be struggling as the controversial two-week quarantine rule kicks off today and is expected to stop hundreds of thousands of travelers going abroad for a summer holiday. But investors seem to take the same view as Ryanair boss Michael O’Leary who called the rule a political stunt that will be unenforceable.
AstraZeneca merger likely to hit hurdles on both sides of the pond
With the pharma industry now embroiled in a frantic search for a coronavirus solution it was only a matter of time before a major merger and acquisitions situation occurred. Over the weekend AstraZeneca made that approach, proposing to merger with US drug maker Gilead Sciences in a deal worth potentially $240bn. However, the deal is likely to run into opposition on both sides of the pond, with the US unlikely to be willing to give up domestic control over a developer that can find a solution not only for COVID but also for other potential future outbreaks, the same being the case on the British side of the deal.
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