European markets downbeat after China unrest fuels global concerns

European and US markets started the week on the back foot as political unrest in China heightened concerns further afield.

Protests in China over the nation’s unwavering zero-covid policy have sparked a sell-off in global stocks as investors fear a prolonged period of restrictions in the world’s second largest economy, according to analysts.

Reports that China could be setting out a path to ease its restrictions had previously buoyed investors, as the nation is a key market for many international businesses.

London’s top index, the FTSE 100, managed to win back some of its losses from the day, boosted by gains from Flutter Entertainment ahead of England playing Wales in the World Cup today.

But it closed down 12.65 points, or 0.17%, to 7,474.02. Other European stocks were down yesterday and the German Dax closed 1.09% lower while the French Cac 40 dipped 0.7%.

Joshua Mahony, from trading platform IG, said: “European and US markets have followed their Asian counterparts lower today, with weekend unrest in China building on the Covid-fuelled uncertainty that had been growing over recent weeks.

“Remarkably, the World Cup seems to have inadvertently served to highlight the disparity between China and the rest of the world, with football fans freely enjoying the tournament as the Chinese population suffer under wave upon wave of Covid measures.

“From a market perspective, the outcome from these protests remains uncertain, with optimists hoping that it will push President Xi Jinping to ease restrictions earlier.”

The pound weakened against the US dollar despite making gains earlier on in the day, although it was still floating comfortably above the 1.2 mark. When European markets closed, it was down 0.5% to $1.2032.

Sterling was also down 0.36% to 1.1587 against the euro. In the US, it was a gloomy start to the week for its top stocks. The S&P 500 was down by around 0.79% and Dow Jones down by 0.72% when European markets closed.

“Outcome from these protests remains uncertain