London’s top indexes fail to recover China Covid lockdown triggered losses

London’s top indexes failed to recover from Monday’s bruising session as investors were still jittery due to concerns over the severity of the impact on the global economy from China sticking to its zero-Covid tolerance policy.

London’s premier FTSE 100 index edged 0.08 per cent higher to 7,286.19 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, fell 0.52 per cent to 20,492.12 points.

Fears over a cool down in the Chinese economy triggered by authorities plunging more cities into lockdown to deal with a surge in Covid-19 cases prompted investors to ditch risky assets en masse yesterday.

All the European, US and UK top indexes fell deep into the red.

Risk appetite only partially recovered yesterday, meaning the UK’s top companies did not recover all of yesterday’s losses.

The pan-European Stoxx 600 continued its decline, dropping 0.84 per cent, while Germany’s Dax 30 dropped over one per cent.

Both indexes had registered gains during opening exchanges.

Stock markets have also been weighed down recently by a string of gloomy forecasts projecting global economic growth to come in much lower than first thought at the beginning of the year.

The International Monetary Fund cut its expectations for UK growth one percentage point off the back of an expected slowdown in consumer spending caused by inflation eroding spending power at the quickest rate in 66 years.

A growing likelihood of the world’s top central banks ploughing ahead with a rapid tightening of monetary policy has also dampened sentiment.

The Bank of England and US Federal Reserve both announce their next decision on interest rates next week. Both are expected to lift borrowing costs.