Stocks plunge as fears grow over impact of China’s draconian Covid lockdown Business News

Stock markets fell across the world on Monday amid fears China’s growing Covid lockdown could cause a global slowdown in supply and economic growth.

About £40bn was wiped off the value of shares in the FTSE 100, which fell 1.9%, as looming restrictions in Beijing sparked panic buying.

The Chinese capital is to carry out mass testing of most of its 21 million citizens and has imposed lockdowns on individual residential buildings and part of the city.

While only 70 cases have been discovered since the outbreak emerged last week, authorities have implemented strict measures as part of China’s “zero-Covid” approach to managing the virus.

Chinese stocks suffered their biggest fall since the start of the pandemic while European stocks fell to their lowest in more than a month.

Economists have warned that the world’s second-largest economy could already be in recession, with a potential ripple effect around the world.

Wall Street was more mixed, with shares of Twitter helping to lift the Nasdaq after news of its purchase by Elon Musk.

Oil majors Chevron Corp and ExxonMobil fell more than 3% each, while oil service companies Schlumberger NV and Halliburton Co fell nearly 9% each. The S&P 500 Materials Index fell 1.75% and Utilities lost 2%.

“Earnings are going to be crucial to the mindset of the average investor. The playbook was: buy Apple, buy Netflix, buy Google and throw away the key, but that playbook doesn’t work anymore,” said Jake Dollarhide , CEO of Longbow Asset Management. “What will be the prospects for these companies?”

Investors were also nervous at the start of a week that will see megacap companies like Google-parent Alphabet Inc, Microsoft Corp, Inc and Apple Inc report quarterly results.

The grim results of the Netflix-darling pandemic along with soaring bond yields hit high-growth stocks last week, pushing year-to-date losses in the tech-heavy Nasdaq to around 18%.

Reuters contributed to this report

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This notice was published: 2022-04-25 21:40:15

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