The FTSE 100 is set to climb by around 0.32pc at today’s open following the bank holiday, despite data showing China’s services sector shrank for the first time since the peak of the pandemic in early 2020.
Futures for the index point to a 25-point gain to 7,156 when trading begins at 8am. However, that would follow a surprise dip in output from one of the world’s biggest economies.
China’s National Bureau of Statistics revealed a drop in the non-manufacturing Purchasing Managers’ Index (PMI) to 47.5 in August, down from 53.3 in July and worse than expectations of a score of 53. Anything below 50 represents a contraction.
Jeffrey Halley, senior analyst at trading platform Oanda, blamed in part China’s introduction of tougher restrictions against private sectors such as tech and education for the blow to output.
“Several factors are at work here,” he said. “Covid-19 lockdowns in various cities and critical ports sapped domestic consumption, and consumers postponed travel as a result. However, it is likely that the ongoing government clampdowns in multiple…