(Reuters) – UK shares slipped on Wednesday, retracing gains from the previous session, as investors questioned whether the optimism over extensive stimulus measures in China was overdone.
At 0715 GMT, the blue-chip FTSE 100 was down 0.3%.
It rose 0.3% in the previous session, amid a global rally after China released their biggest raft of stimulus measures since the COVID-19 pandemic.
However, the optimism faded as market watchers questioned whether the scope of proposed measures was extensive enough to fix deep-rooted issues in China and spark a sustained resurgence in consumer and industrial demand.
Even China’s central bank reducing its medium-term loan rate on Wednesday did little to lift sentiment again.
“Monetary policy remains unlikely to move the needle on Chinese growth … the Chinese economy needs fiscal stimulus and monetary policy alone isn’t sufficient to revive domestic demand,” analysts at BCA Research said in a note.
The pullback in UK equities was broad, with the beverage sector’s near 1% drop leading declines.
The banking and life insurance sectors lost about 0.8% each.
An index of oil and gas stocks dipped 0.3% as crude prices declined.
However, industrial miners and precious metal miners built on gains from the prior session, rising 1% and 0.7%, respectively, as prices of copper and gold continued to rise.
The more domestically focused mid-cap index was flat, with financial shares keeping a lid on gains.
Among other single movers, real estate portal Rightmove lost 0.5% after rejecting a sweetened $8.1 billion takeover proposal from Australia’s REA Group, saying the increased bid was still “unattractive”.
Retailer DFS Furniture also dipped 0.5% after posting a 65.7% slump in annual profit.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Savio D’Souza)
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