LONDON BRIEFING: Growing concern about China as Covid cases surge

(Alliance News) - Stocks in London are set to open lower on Thursday amid worries about rising Covid cases in the world's second-largest economy.

Hospitals across China have been overwhelmed by an explosion of Covid cases following Beijing's decision to lift strict rules that had largely kept the virus at bay but tanked its economy and sparked widespread protests. 

On Monday, the country said it would bring an end to mandatory quarantine on arrival – prompting many jubilant Chinese citizens to make plans to travel abroad.

In response, the US and a number of other countries announced they would require negative Covid tests for all travellers from mainland China.

"The recent rapid increase in Covid-19 transmission in China increases the potential for new variants emerging," a senior US health official told reporters in a phone briefing.

Here is what you need to know ahead of the London market open:

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MARKETS

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FTSE 100: called down 23.19 points, or 0.3%, at 7,474.0

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Hang Seng: down 1.0% at 19,691.17

Nikkei 225: closed down 0.9% at 26,093.67

S&P/ASX 200: closed down 0.9% at 7,020.10

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DJIA: closed down 365.85 points, 1.1%, at 32,875.71

S&P 500: closed down 1.2% at 3,783,22

Nasdaq Composite: closed down 1.4% at 10,213.29

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EUR: unchanged at USD1.0617

GBP: lower at USD1.2025 (USD1.2029)

USD: lower at JPY133.81 (JPY134.23)

Gold: higher at USD1,806.80 per ounce (USD1,801.04)

(Brent): higher at USD83.13 a barrel (USD82.87)

(changes since previous London equities close)

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ECONOMICS

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Thursday's key economic events still to come:

10:00 CET EU monetary developments  

09:30 GMT UK capital issuance statistics

08:30 EST US international investment position

08:30 EST US unemployment insurance weekly claims report 

16:30 EST US federal discount window borrowings

16:30 EST US foreign central bank holdings

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The deadly bomb cyclone that has sent temperatures plunging in the US is also causing the UK to experience wet and windy weather, the Met Office said. On Wednesday, the forecaster issued a yellow weather warning for heavy rain from 3am on Friday for 15 hours for much of Scotland, including Edinburgh, Glasgow and Stirling. The Met Office said heavy rain could bring some flooding and travel disruption.

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The amount contributed by Germany to the budget of the EU rose to a new record level in 2021, reaching a total of EUR25.1 billion net, according to calculations by dpa. This a significant increase on the EUR19.4 billion contributed by Europe's biggest economy in 2020 and more than twice as much as the French contribution of EUR12.4 billion. Italy, the third most populous state in the bloc, only contributed some EUR3.2 million, or less than 15% of what Berlin gave for EU expenditures.

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BROKER RATING CHANGES

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Jefferies raises Next price target to 5,700 (5,500) pence - 'hold'

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COMPANIES - FTSE 250

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Miner Ferrexpo noted that Non-Executive Director Kostyantin Zhevago has been detained by the French authorities. It said that it believes this is for matters unrelated to the firm, but said it would week to clarify the situation and update as appropriate.

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OTHER COMPANIES

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Metals producer Yamana Gold reported the filing of a circular and a special meeting to seek approval for its acquisition by Pan American Silver and the sale of its Canadian assets to Agnico Eagle. The meeting will be held at the end of January.

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PRS REIT announced a short-term extension to its GBP150 million revolving credit facility, maturing in February 2023. The real estate investment trust said the extension has been secured for the period to July 14 at the same margin above the three-month sterling overnight index average rate as the existing arrangements. The firm said this will provide additional time for market conditions to stabilise and offer it further flexibility to fully explore its funding options.

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By Heather Rydings, Alliance News senior economics reporter

Comments and questions to newsroom@alliancenews.com

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