China fears put dampener on market


The FTSE 100 Index slipped 59.8 points to 5917 on opening

Fears that China will have to do more to cool economic growth following higher than expected inflation have put a dampener on world stock markets.

The FTSE 100 Index slipped 59.8 points to 5917 after similar losses in Asia as the Nikkei 225 and the Hang Seng Index both dropped by more than 1%.

China’s economy expanded 9.8% in the fourth quarter, while inflation in December moderated to 4.6% from November’s 28-month high but analysts said it was still more than expected and likely to rise again.

This led to fears that China will have to slow economic growth, which could dent the country’s appetite for crude and other commodities.

Stocks were also under pressure after banking giant Goldman Sachs said fourth quarter earnings fell by more than half.

In corporate news, shares in easyJet slumped 13% or 59.2p to 396.5p after the airline warned half-year losses could double due to the impact of weather disruption and the rising cost of fuel.

More Than insurer RSA was another casualty of the recent snow after it revealed its bill for UK weather-related claims was expected to be £110 million more than normal after the coldest December for 100 years.

RSA said full-year earnings would be lower than market forecasts – at around £600 million to £630 million against predictions for at least £700 million. Shares fell 2.4p to 132.4p.

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