China continues to weigh on FTSE

Heading into the close the FTSE 100 is down ten points, as weak manufacturing numbers from China have spooked the market.

Chinese manufacturing continues to shrink

Chinese manufacturing has gone from bad to worse. In January the manufacturing sector was already in contraction, and it has continued to shrink. This has sent mining stocks tumbling. The People's Bank of China is removing the liquidity it added in the summer, and it strikes me as odd that the central bank is depleting the liquidity pool while manufacturing levels are in decline. 

BAE worries continue

Shareholders in BAE Systems are ducking for cover, after the defence contractor expressed fears that Uncle Sam’s belt-tightening will lead to less merchandise being moved. 

It is one week until Royal Bank of Scotland releases its figures. Traders have taken heed from Lloyds' announcement last week, and RBS is in a much more vulnerable position. 

Dow bouncing back after sell-off

In the US, the Dow Jones is up 56 points at 16,097, as the market bounced back after last night's sell-off on the back of the FOMC minutes. 

Bargain-basement retailer Walmart revealed a drop in fourth-quarter EPS. Customers like its rock-bottom prices, but traders are not so keen on its bottom-of-the-barrel earnings. 

WhatsApp was delighted to receive a $19 billion friend request from Facebook last night, but shareholders in Facebook don’t ‘like’ the acquisition.

Copper at seven-month low

Copper is under the cosh after Chinese manufacturing slipped to a seven-month low. To add salt to the wounds, the Chinese central bank is removing the additional funding to the interbank market. 

Euro down after disappointing data

The euro is off versus the US dollar after the eurozone announced poor manufacturing and services figures.

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