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Equilibrium's Finance and Investment News Roundup

In our first roundup of 2016 we look at the big drop in the FTSE 100 and the attempts in China to halt a significant stocks slide, poor Christmas sales for Next and a more positive festive season for John Lewis, as well as reports of increased borrowing ahead of the Christmas period.

 

FTSE 100 drops by 2.6% whilst China attempts to halt stocks slide 

Global markets recovered slightly on Tuesday after China made efforts to halt a significant stocks slide that included a 7% nosedive on Monday. Early trading on Tuesday saw a decrease of more than 2% in Shanghai, which added to the considerable concern already felt following huge stock and yuan currency drops the day before. The FTSE 100 also saw a big drop of 2.6% on Monday, although it jumped up by 1% as trading began on Tuesday.

Attempts to shore up sentiment have included the People's Bank of China injecting almost $20 billion (£13.62 billion) into the markets and an announcement by the China Securities Regulatory Commission regarding new rules aiming to limit the sale of shares by major stakeholders in listed companies.

On Tuesday, the Shanghai Composite Index dropped 0.3% to 3,287.71 points, while the blue-chip CSI300 index was up by 0.3% to reach 3,478.78 points.  

Next reports disappointing pre-Christmas sales

Next has revealed it endured a poor sales period in the lead up to Christmas. The 0.4% rise in Next brand full price sales recorded between October 26th and December 24th represented a significant slowdown from the 6% growth posted for the third quarter of the year.

The retailer, whose company guidance aimed for second half growth of between 3.5% and 7.5%, indicated that warmer-than-usual weather in November and December was partly responsible for the figures. It also claimed greater online competition and poor stock availability help to explain the poor performance.

Despite this, Next said it anticipates a pre-tax profit of around £817 million for 2015-16, with shares in the company 9.9% higher this year than last. However, worries regarding the Christmas trading period have seen shares dip 9.4% over the last month. 

John Lewis posts 2.3% Christmas week sales climb

Website and mobile app sales of gadgets have been credited with helping John Lewis record a year-on-year sales increase during the Christmas week. The department store chain - the largest of its kind in Britain - posted a 2.3% sales climb in the seven days to December 26th.

The retailer explained it saw a climb in consumers purchasing gaming devices and wearable technology, such as Fitbits and headphones, during the week. Other big sellers included beauty products, jewellery and watches.

Sales from the John Lewis website climbed by 25.1% for the week, helping the company record an overall increase of £129.2 million. 

Pre-Christmas consumer borrowing 'surged'

Consumer borrowing climbed markedly in the run-up to Christmas, new research has shown. According to figures released by the Bank of England, the amount of money borrowed in November climbed by £1.5 billion, with consumers owing a total of £178.2 billion on loans and credit cards.

The £1.5 billion increase is the biggest upturn for almost eight years and marks a further climb on the £1.2 billion rise posted in October.

The Money Advice Trust has expressed concern about the figures, adding personal debt could be set to rise in the near future. Its Chief Executive Joanna Elson said: "These figures confirm that we do need to keep a watchful eye on the huge growth in consumer credit we are now seeing."