European markets downbeat as China unrest fuels global concerns
Market report
European and US markets started the week on the backfoot 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 per cent, to 7,474.02.
Other European stocks were down on Monday and the German Dax closed 1.09 per cent lower while the French
Cac 40 dipped 0.7 per cent.
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.”
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 per cent to 1.2032 dollars.
Sterling was also down 0.36 per cent to 1.1587 against the euro.
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.
The biggest fallers on the FTSE 100 were Admiral Group, down 94p to 2,034p, Persimmon, down 49p to 1,279.5p, Melrose Industries, down 4.6p to 129.95, Ocado Group, down 16p to 633.8p, and Rolls-royce Holdings, down 2.23p to 88.62p.