Equities hit by new China woes, Rightmove jumps on advertising success, infrastructure companies back in fashion and Frontier Developments warns for the umpteenth time

“Renewed worries about the outlook for the Chinese economy caused tremors across global markets at the start of the new trading week. There was a slowdown in China’s industrial profit growth during October, causing markets to speculate its government will have to come up with yet another stimulus measure to avoid the economy spluttering,” says Russ Mould, Investment Director at AJ Bell.

“Shares in mining companies tend to slip back whenever there are concerns about China, given it is a major consumer of commodities. True to form, the big mining stocks were in the red on Monday. BHP dropped 1.1%, Anglo slipped 0.9%, Rio Tinto fell 0.6% and Glencore retreated 0.4%. A 0.9% drop in the Brent Crude oil price to $79.83 pulled down BP and Shell. Prudential’s focus on Asia also saw its shares caught up in the sell-off, down 0.7%.

“While the FTSE 100 was in negative territory, down 0.1% to 7,479, half the index still managed to achieve positive share price gains. Rightmove scored the top spot, rising 4.8% after saying revenue had grown ahead of market expectations since reporting results in July. Clients are spending more on advertising on average, driven by new home developers doing more to try and shift their properties.

“It has long been argued that Rightmove could do well in both good and bad market conditions. When times are good, it benefits from a steady flow of properties being advertised on its portal. During tougher times, estate agents and home developers need to work harder to attract potential buyers and that means spending more on advertising.”

Infrastructure Sector

“Infrastructure-related companies have been quietly moving higher on the stock market in recent weeks and that trend was firmly in motion on Monday. Sequoia Economic Infrastructure Income Fund, Octopus Renewables Infrastructure Trust and Digital 9 Infrastructure were among the top risers on the FTSE 250 as investors regained interest in a sector that has been beaten up by rising interest rates.

“With many investors taking the view that we could have seen the peak for rates rises in the current cycle, they are now fishing around for opportunities among stocks that could rally at the first sign of rates moving back down.”

Frontier Developments

“The market has lost count of the number of profit warnings issued by gaming group Frontier Developments in recent years, and true to form along comes another one.

“Possibly the unluckiest company on the London Stock Exchange, demand for its latest game is below expectations.

“Perhaps management hasn’t got the memo that it is better to under-promise and over-deliver than to set the bar too high from the start. Its shares crashed to a nine-year low.”

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