Stocks fall as China’s Zero-covid policy in focus
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 Zerocovid 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 on Tuesday.
But it closed down 12.65 points, or 0.17%, to 7,474.02.
Other European stock markets were down on Monday and the German Dax closed 1.09% lower while the French CAC-40 dipped 0.7%.
Joshua Mahony, senior market analyst at online 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 containment measures.
“From a market perspective, the outcome from these protests remain uncertain, with optimists hoping that it will push President Xi Jinping to ease restrictions earlier.
“However, for now we see major uncertainty that has been reflected by market weakness, with concerns growing over a drawn-out period of restrictions thanks to growing Covid cases.”
In the US, it was a gloomy start to the week for top stocks. The S&P 500 was down by around 0.79% and Dow Jones 0.72% lower when European markets closed.
Shares in clothing retailer Superdry plunged after it confirmed reports it was in talks with a US hedge fund in efforts to secure funding. The business faces an uncertain future as its £70 million loan facility is set to expire in January. Investors were clearly spooked by the update and its shares tumbled by 17.2%.
Telecoms giant BT Group announced plans to raise pay for all but its highest-paid staff in a move to resolve a longrunning dispute with unions that has led to strikes.
Shares in BT dipped by 2.44% following the pledge to lift a large proportion of its UK workers’ pay by £1,500.
The biggest risers on the FTSE-100 were Pershing Square Holdings, up 40p to 2,955p, Flutter Entertainment, up 150p to 11,945p, Reckitt Benckiser Group, up 68p to 5,968p, Pearson, up 11.2p to 990.2p, and Unilever, up 41.5p to 4,155p.