Seeds of progress in Russia-Ukraine peace talks partly offset China slowdown fears in City

Seeds of progress in peace talks between Russia and Ukraine were enough to partially offset concerns about a looming slowdown in the Chinese economy in the City yesterday.

The capital’s premier FTSE 100 index edged down 0.14 per cent to 7,473.14 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, climbed 0.54 per cent to 21,070.03 points.

Ukraine President Volodymyr Zelenskyy said Kyiv is open to accepting Russian demands that the country becomes neutral and does not join NATO if it yields an end to the war.

The news boosted market sentiment in the capital in the morning and helped ease fears over global trade being hit by Beijing authorities launching the toughest lockdown in China since the start of the pandemic.

Shanghai, one China’s most populous cities and a business centre, has been ordered into a gradual lockdown as Beijing tries to quash a rapid spread of cases.

Oil prices dropped on the news, driven by fears demand could be sucked out of the market as a result of economic activity in the world’s second largest economy cooling.

China is an enormous consumer of commodities due to its heavy reliance on industrial production to generate output.

British Airways owner IAG was among the top performers on the FTSE 100, taking off 1.89 per cent.

Lender Barclays tumbled over four per cent after it said it will book an over £400m hit from over selling financial products.