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Monday, January 30, 2023
Stocks & Shares

FTSE 100, European stocks down on China COVID protests

China COVID protests

The FTSE 100 lost 0.35% to 7,461, the CAC fell 0.99% to 6,646 points, while the DAX slipped 0.96% to 14,401

The FTSE 100 and European stocks were in the red on Monday, as protests intensify in major Chinese cities against the country’s stringent zero-COVID rules.

The FTSE 100 lost 0.35% to 7,461 during midday trading, while the CAC in Paris fell 0.99% to 6,646 points. In Germany, the DAX slipped 0.96% to 14,401.

Protests over strict anti-virus curbs erupted across the world’s largest crude importer over the weekend, including demonstrations in Beijing and Shanghai, sparking a broad selloff in commodities as the week opened.

Brent crude plunged to $81 per barrel, while US crude was below $75 per barrel for the first time in around 11 months.

Naeem Alsam, chief market analyst at Avatrade, said: Basically, it is demand that is creating the main issue for the price, and the fact that we have a potential recession threat and now the COVID issues in China, things are becoming difficult for oil traders.

The reality is that no one wants to see more lockdowns in China, as a situation like this creates nothing but more headwinds for oil prices, he said.

In London, the fall in the oil price hit BP and Shell, down 1.65% and 1.04% respectively.

The ongoing protests in China over quarantine restrictions were also affecting expectations for demand for metal. Falling metal prices hit miners Anglo American and Rio Tinto, down 0.73% and 0.51% respectively.

Raffi Boyadjian, lead investment analyst at XM, said: Risk assets took a knock at the start of the week as worries about instability in China and how the country’s unyielding zero-COVID policy might further blight the outlook led investors to search for safety.

Asia-Pacific focused financial firms HSBC and Standard Chartered also took a hit, down 0.68% and 0.31% respectively.

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