(Alliance News) - Stocks in London ended sharply lower on Monday after China's April exports slumped to the lowest level in almost two years, due to the nation's strict zero-Covid policy.
China's export growth slowed in April, customs data showed, as a Covid resurgence shuttered factories, sparked transport curbs and caused congestion at key ports.
Export growth plunged to 3.9% year-on-year last month, the Customs Administration said. While this was above analysts' expectations of 2.7% growth according to a Bloomberg poll, it marked the lowest rate since June 2020.
Import growth was flat in April, an improvement from a 0.1% contraction in March, as Chinese consumers remain hesitant under a welter of restrictions across the country.
The FTSE 100 index closed down 171.36 points, or 2.3%, at 7,216.58. The FTSE 250 ended down 512.95 points, or 2.6%, at 19,306.72, and the AIM All-Share closed down 31.41 points, or 3.2%, at 946.01.
The Cboe UK 100 ended down 2.5% at 719.80, the Cboe UK 250 closed down 2.6% at 17,059.96, and the Cboe Small Companies ended down 1.9% at 14,555.88.
In European equities, the CAC 40 in Paris stock index ended down 2.8%, while the DAX 40 in Frankfurt closed down 2.2%.
In addition, millions of people in Beijing stayed home on Monday as China's capital attempted to fend off a Covid-19 outbreak with creeping restrictions on movement.
Beijing residents fear they may soon find themselves in the grip of the same draconian measures that have trapped most of Shanghai's 25 million people at home for weeks.
Lockdowns across dozens of Chinese cities - from the manufacturing hubs of Shenzhen and Shanghai to the breadbasket of Jilin - have wreaked havoc on supply chains over recent months and further stoked global inflationary pressures.
"The bloodletting on stock markets has continued today as we start a new week with the DAX and FTSE 100 plunging below their April lows, with the biggest declines being seen in basic resources after the latest China trade data showed that imports ground to a halt in April," said CMC Markets analyst Michael Hewson.
"The stubborn pursuit by Chinese authorities of a zero-Covid policy is raising concerns that it will have a chilling effect on the Chinese economy in the months ahead, and with Beijing and Shanghai tightening curbs on resident of those cities, we appear to be seeing a realisation that supply chain issues may still have some way to go as far as downside risk is concerned, with dire consequences for growth prospects," Hewson added.
In the FTSE 100, gambling companies Entain and Flutter Entertainment ended the worst performers, down 8.9% and 5.9% respectively, in a negative read-across from US rival DraftKings.
DraftKings was down 15% in New York after the US sports betting company reported mixed earnings and flagged a rise in future investment on Friday.
London's big listed miners were feeling the heat from the disappointing China data. In the FTSE 100, Glencore closed down 6.0%, Antofagasta 6.5%, Rio Tinto 4.6% and Anglo American 5.4%. Ferrexpo ended down 10% in the FTSE 250.
Rightmove lost 3.4% after the property portal said Chief Executive Peter Brooks-Johnson will step down from the role.
He will remain CEO through to the announcement of the company's full-year results in February 2023. Brooks-Johnson has been with the company for 16 years, being appointed as chief operating officer in 2013 then CEO in 2017, but said he is leaving to "seek a new challenge".
Rightmove said it has started a "comprehensive process" to find his replacement.
In the FTSE 250, NCC Group closed up 3.7% after the cybersecurity firm said it expects a marked second half revenue increase and added that it has named a cybersecurity head at accounting firm EY as its new chief executive.
NCC expects revenue in the second half of the year ending May 31 to be "substantially higher" than a year prior. It will also be a demonstrable improvement on its first half fortunes, NCC added. In the six months to November 30, the company's first half, revenue amounted to GBP150.1 million.
On its CEO change, NCC said Mike Maddison joins the board at the start of August. Current CEO Adam Palser, who is stepping down after more than four and a half years in the role, will remain as CEO until mid-June and will be available "to support an orderly handover".
Maddision is currently head of EY's cyber security, privacy, and trusted technology practice in the Europe, Middle East & Africa region. He has held that role since 2017.
In London's junior market, Ideagen closed up 47% at 356.00 pence after it agreed to a GBP1.06 billion takeover offer from funds run by London-based private equity firm Hg Pooled Management.
Under the agreement, the Hg Pooled funds will acquire Ideagen for 350p per share, reflecting a 44% premium to the company's closing price of 243p on Friday last week and valuing its equity at GBP1.06 billion.
Ideagen expects the acquisition to be completed by July.
Ideagen said it unanimously recommends the offer from Hg Pooled, but remains in talks with private equity firm Astorg, which has been granted access to due diligence.
The dollar was higher across the board. The pound was quoted at USD1.2320 at the London equities close, down from USD1.2355 at the close Friday.
The euro stood at USD1.0535 at the European equities close, down from USD1.0576 late Friday. Against the yen, the dollar was trading at JPY130.45, up from JPY130.34.
New York was firmly in the red at the London equities close markets weigh ongoing worries about inflation and higher interest rates.
The DJIA was down 1.5%, the S&P 500 index down 2.2% and the Nasdaq Composite down 3.0%.
On Wall Street, Uber Technologies fell 6.7% after CNBC reported the ride-hailing company plans to trim expenses and limit additional hiring in response to rising operating costs.
Brent oil was quoted at USD107.50 a barrel at the equities close, down sharply from USD112.74 at the close Friday.
Gold stood at USD1,861.75 an ounce at the London equities close, lower against USD1,886.77 late Friday.
The economic events calendar on Tuesday has Germany ZEW indicator of economic sentiment at 1000 BST.
The UK corporate calendar on Tuesday has a trading statement from Renishaw and annual results from FD Technologies.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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