European markets downbeat as China unrest fuels global concerns
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 zero-Covid policy have sparked a selloff 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 stocks 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 Covidfuelled 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.”
The pound weakened against the US dollar despite making gains earlier in the day, but it was still floating comfortably above the 1.2 mark. When European markets closed, it was down 0.5% to 1.2032 dollars. 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.
In company news, troubled cosmetics group Revolution Beauty announced its chief operating officer would be taking the top job as boss as it undergoes an investigation into auditing failures. Online retail giant Boohoo later said it had doubled its stake in the firm, from 13% to 26%, as it stood by its partner. Shares in Revolution Beauty have been suspended in London since September. Boohoo’s share price rose 2.72%.
Shares in clothes retailer Superdry plunged 17.2% after it confirmed it was in talks with a US hedge fund to try and secure funding. The firm faces an uncertain future as its £70m loan facility is set to expire in January.
Telecoms giant BT Group announced plans to raise pay for all but its highest paid staff in a move to resolve a long-running dispute with unions that has led to strikes. Shares in BT dipped by 2.44%.
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 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.