FTSE 100 slips as China COVID protests rattle markets
London’s FTSE 100 slipped on Monday, with energy and mining stocks leading broad-based losses, as investors globally fretted over China’s economic outlook following rare protests in the country against its strict COVID-19 restrictions.
The blue-chip FTSE 100 shed 0.7%, following two weekly gains that lifted the index to its highest levels in more than two months. The more domestically focused FTSE 250 midcaps index fell 0.9%.
Energy stocks were the biggest drags in the FTSE 100, with oil majors BP and Shell down around 1.5% each.
Miners of base and precious metals dropped 0.6% and 0.9%, respectively.
Commodity prices dipped on worries about demand from top consumer China where protests against strict COVID-19 restrictions flared up. China’s zero-COVID policy has already slowed the economy and pressured global growth, but failed to stem the rise in infections.
“It’s a very hard thing to price, even the markets are not used to seeing demonstrations in China,” said Chris Beauchamp, chief market analyst at IG Group.
“It looks quite serious, worries about how that will affect the government’s reopening strategy and what kind of response you will get from Beijing, that’s definitely causing a bit of caution.”
Real estate stocks lost more than 1%. A survey showed British property market activity stalled in October and house price growth slowed to its lowest quarterly level since February 2020 due to a disastrous “mini-budget” and a cost-of-living crisis.
British retailers fell 0.5%. Amid the worsening cost-of-living crisis, focus will now be on Cyber Monday sales after data showed Black Friday shopper numbers across Britain rose 3.7% year-on-year, albeit still down 21.3% on pre-pandemic levels. (Reporting by Shashwat Chauhan in Bengaluru; Editing by Savio D’Souza and Sherry Jacob-Phillips)
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