China supply fears send London’s top indexes tumbling

Fears over a possible slowdown in Chinese production caused by Beijing locking down one of the country’s top manufacturing hubs amid an outbreak in Covid-19 cases sent London’s top indexes lower yesterday.

The capital’s premier FTSE 100 index dropped 0.25 per cent to 7,175.70 points, while the domestically-focused FTSE 250, which is more aligned with the health of the UK economy, fell 1.04 per cent to 20,257.66 points.

Beijing has imposed tough lockdown measures on the region that includes the technology and manufacturing hub Shenzhen, raising concerns over a hit to Chinese supply of goods and services.

Large swathes of Western economies rely on China for inventories of components used in production processes.

A slowdown in supply will likely add to inflationary pressures spiking rich nations.

Lingering concerns over an escalation in the Russia-Ukraine war also weighed on market sentiment.

Asian shares tumbled in overnight trading driven by Beijing’s seeming reversion to zero-Covid policies triggering a heavy risk off session.

The worst performer on the FTSE 100 was Russian gold miner Polymetal International, dropping over 20 per cent.

The firm is set to be booted from the FTSE indexes, as is steelmaker Evraz, which counts Roman Abramovich as a major shareholder.

Cult bootmaker Doc Martens was among the worst performers on the FTSE 250, falling 6.53 per cent.

The pound strengthened 0.3 per cent against the dollar to buy $1.3039.