Concoction of risks weighs on London markets

A concoction of risks threatening to scupper the global economic recovery from the Covid-19 crisis weighed on London markets this morning.

The capital’s premier index edged down 0.12 per cent to 7,018.60 points during the first couple of hours of trading today.

Ongoing supply issues, severe shortages, accelerating inflation and the growing likelihood of central banks raising rates have soured sentiment on the FTSE today.

Russ Mould, investment director at AJ Bell, said: “There may still be 27 days to go until Halloween, but the fear factors are out in force and investors are not in the mood to be spooked.”

“Inflation, the energy crisis, supply chain issues, economic growth stuttering, concern that interest rates could go up sooner rather than later and China’s ongoing Evergrande debt problem remain at the forefront, clouding investment decisions and muddying the waters for anyone trying to make money on the market.”

Shares in heavily indebted Chinese property giant Evergrande were suspended on the Hong Kong stock exchange this morning after it is reportedly set to announce a bailout agreement.

The Hang Seng, Hong Kong’s elite index, plunged 2.19 per cent in overnight trading.

Financials dragged the blue-chip index down, with the likes of banks Barclays and HSBC dropping over one per cent. Insurer Prudential also took a hit this morning, down 1.24 per cent.

Britain’s fourth largest supermarket, Morrisons, which has recently been admitted to the FTSE 100, was the second worst performer on its first day of trading since CD&R emerged as the successful bidder for the Bradford-based firm on the weekend.

However, three of Morrisons’ biggest rivals, Sainbury’s, Tesco and Ocado, were the best performers on the FTSE 100 during the morning session.

London’s poor performance bled into the continent – Germany’s Dax 30 was down 0.51 per cent and the pan-Europe Stoxx 600 slipped 0.47 per cent.