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London open: Shares in red as surge In China Covid cases hits sentiment
London stocks opened lower on Thursday as investors fretted about surging Covid cases in China and Beijing’s decision to lift travel bans.
The FTSE 100 index was 0.62% lower at 7451 points at 0837 GMT.
“Most FTSE 100 stocks are in the red with only a handful of names including Homeserve and United Utilities in the green as risk-off sentiment grips global markets as we head towards the end of the year,” said Interactive Investor head of Investment Victoria Scholar.
Markets in Asia are under pressure with the Hang Seng down more than 1% amid concerns about the impact of covid on demand in China. This is also dragging oil prices into the red with brent crude down by almost 1%.”
US officials overnight joined other countries in demanding negative Covid tests from all travellers arriving from mainland China. Britain, which failed to move quickly enough more than two years ago to impose restrictions, once again said it had no plans to require negative tests.
Beijing has announced a dismantling of its strict zero-Covid policy which had led to protests across the country over its impact on the economy. On Monday, the country said it would bring an end to mandatory quarantine on arrival, leading to a spike in travel plans by citizens.
Japan, Taiwan, Italy, Malaysia and South Korea have all announced to deal with an expected influx of travellers from China.
Officials in Washington expressed concerns over virus-related data released by the Chinese government.
With the New Year holiday approaching there was understandably a dearth of major corporate news.
The only development of note was the detention on France of Ferrexpo owner Kostyantin Zhevago at the request of Ukrainian authorities over matters related to on suspicion of money laundering and embezzling funds linked to his banking business.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Scottish Mortgage Investment Trust Plc | +1.39% | +9.60 | 699.60 |
| 2 |  |
Hikma Pharmaceuticals Plc | +0.71% | +11.00 | 1,571.00 |
| 3 |  |
Next Plc | +0.60% | +34.00 | 5,692.00 |
| 4 |  |
Direct Line Insurance Group Plc | +0.27% | +0.60 | 222.20 |
| 5 |  |
Hiscox Ltd | +0.23% | +2.50 | 1,109.00 |
| 6 |  |
Mondi Plc | +0.21% | +3.00 | 1,421.50 |
| 7 |  |
Rio Tinto Plc | +0.15% | +9.00 | 5,827.00 |
| 8 |  |
Schroders Plc | +0.11% | +0.50 | 438.90 |
| 9 |  |
Itv Plc | +0.11% | +0.08 | 74.40 |
| 10 |  |
Marks And Spencer Group Plc | +0.08% | +0.10 | 122.50 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Easyjet Plc | -2.40% | -8.00 | 324.80 |
| 2 |  |
Bt Group Plc | -2.17% | -2.50 | 112.70 |
| 3 |  |
International Consolidated Airlines Group S.a. | -1.73% | -2.18 | 124.04 |
| 4 |  |
Ocado Group Plc | -1.38% | -8.60 | 615.20 |
| 5 |  |
Bp Plc | -1.13% | -5.45 | 474.95 |
| 6 |  |
Antofagasta Plc | -1.04% | -16.50 | 1,570.00 |
| 7 |  |
Spirax-sarco Engineering Plc | -0.93% | -100.00 | 10,660.00 |
| 8 |  |
Johnson Matthey Plc | -0.91% | -19.00 | 2,070.00 |
| 9 |  |
Lloyds Banking Group Plc | -0.91% | -0.42 | 45.82 |
| 10 |  |
Whitbread Plc | -0.88% | -23.00 | 2,599.00 |
US close: Major indices register heavy losses
Wall Street stocks registered heavy losses on Wednesday, putting the US stock market firmly on track for its worst year since 2008.
At the close, the Dow Jones Industrial Average was down 1.10% at 32,875.71, while the S&P 500 lost 1.20% to 3,783.22 and the Nasdaq Composite saw out the session 1.35% softer at 10,213.29.
The Dow closed 365.85 points lower on Wednesday, easily reversing modest gains recorded in the previous session.
Wednesday’s heavy sell-off was primarily a result of recessionary fears that weighed on sentiment throughout what has been both a losing month and year.
Oil prices were also in focus on Wednesday after Russia banned oil sales to countries and companies that comply with a price cap agreed upon by Western nations earlier in December. West Texas Intermediate futures were 0.44% weaker at $78.61 per barrel and Brent Crude futures were 1.27% softer at $83.26 a barrel.
On the macro front, mortgage applications rose 0.9% week-on-week in the seven days ended 16 December, according to the Mortgage Bankers Association of America, following a 3.2% advance in the previous week.
Elsewhere, US pending home sales declined by 37.8% year-on-year in November, according to the National Association of Realtors, the 18th consecutive monthly drop and the biggest fall since November 2021.
Finally, the Richmond Federal Reseve‘s manufacturing index rose from a print of -9 in November to 1 in December – the highest reading since April.
In the corporate space, Tesla shares were up more than 3% at the end of trading, reclaiming some of yesterday’s heavy losses driven by a Wall Street Journal article that claimed the electric carmaker would continue a weeklong production halt at its Shanghai facility amid a fresh onslaught of Covid-19 cases.
Thursday newspaper round-up: Consumers, US/China Covid, strikes, pensions, ExxonMobil
Two-thirds of UK consumers are planning to cut their discretionary spending in 2023 amid concerns about the cost of living crisis, according to a survey. Highlighting the pressure on families and the wider economy from inflation, the accountancy firm KPMG said 61% of consumers in a poll of 3,000 were preparing to reduce their spending on eating out, holidays and other non-essentials. – The Guardian
The US has announced all travellers from China must provide a negative Covid-19 test to enter the country, joining other nations imposing restrictions because of a surge of infections. The increase in cases across China follows the rollback of the nation’s strict anti-virus controls. Beijing’s “zero Covid” policies had kept the country’s infection rate low but fuelled public frustration and crushed economic growth. – The Guardian
It is only a matter of time before striking unions join forces, ministers were warned yesterday. Britain was told that it faced co-ordinated and escalating walkouts in the new year in an attempt to force the government to back down in public sector pay disputes. Border Force staff who are members of the Public and Commercial Services Union (PCS) began a three-day strike yesterday. Rishi Sunak refused to step in, repeating his assertion that below-inflation settlements could not be reopened. Mark Serwotka, general secretary of the union, said the wider stand-off could lead to a wave of “co- ordinated, synchronised and escalating” industrial action. – The Times
Millions of people have abandoned saving into pensions in the past year to bag an extra £550 or more in annual take-home pay to meet rising fuel and food bills. The abrupt change in behaviour has left employees typically expecting to have to delay their retirement plans by three years, the Pensions Management Institute has found. According to its research, 20 per cent of employees have opted out of workplace pension schemes or have asked to have their pension deductions reduced in the past year. Another 20 per cent are considering doing so. – The Times
ExxonMobil is suing the EU to try and overturn its new windfall tax on oil and gas companies, accusing Brussels of overstepping its legal powers with the “counter-productive” policy. The US oil giant has filed a lawsuit at the European General Court seeking to block the new levy, which is expected to raise €25bn (£22bn). – The Telegraph
