(Alliance News) - Stocks in London are set for a guarded start to the week, with investors eyeing the latest Ukraine updates and a lockdown in Shanghai.
IG says futures indicate the FTSE 100 index of large-caps to open up 10.85 points, or 0.1%, at 7,494.20 on Monday. The FTSE 100 closed up 15.97 points, or 0.2%, at 7,483.35 on Friday.
"Global markets seem to be a bit nervous about the effectiveness of China's zero-tolerance policy towards Covid and the potential for more demand and supply chain disruptions as we might be only dealing with the tip of the iceberg," said Stephen Innes, managing partner at SPI Asset Management.
Millions of people in China's financial hub were confined to their homes on Monday as the eastern half of Shanghai went into lockdown to curb the nation's biggest Covid outbreak.
Authorities announced late on Sunday that it would carry out a two-phased lockdown of the city of around 25 million people to carry out mass testing.
The government had sought to avoid the kind of hard lockdowns regularly deployed in other Chinese cities, opting instead for rolling localised lockdowns, in an effort to protect Shanghai's economy. But Shanghai has in recent weeks become China's Covid hotspot, and on Monday another record high was reported with 3,500 new confirmed cases.
The area locked down on Monday was the sprawling eastern district known as Pudong, which includes the main international airport and glittering financial district. The lockdown will last until Friday, then switch to the more heavily populated western Puxi section that includes the historic Bund riverfront.
In Asia on Monday, the Japanese Nikkei 225 index was down 0.6%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng Index in Hong Kong was up 1.2%. The S&P/ASX 200 in Sydney closed up 0.1%.
Oil prices slipped on the Shanghai lockdown news. Brent oil was trading at USD117.04 a barrel, down from USD120.08 late Friday.
"The decline is due to the expected demand disruptions given the importance of Shanghai for the Chinese economy," said Danske Bank.
In the US on Friday, Wall Street ended mostly higher, with the Dow Jones Industrial Average ending up 0.4% and the S&P 500 up 0.5% but the Nasdaq Composite down 0.2%.
Russian and Ukrainian negotiators will resume face-to-face peace talks as soon as Monday, probing whether a near-stalemate in fighting has forced Moscow to temper its demands.
It remains to be seen whether talks will be hampered by US President Joe Biden's shock declaration that Putin "cannot remain in power".
The ad-libbed remark sparked outrage in Moscow and sowed widespread concern in Washington and abroad, seeming to undercut Biden's own efforts on a European visit to underscore a carefully crafted unity in support of Kyiv.
Sterling was quoted at USD1.3143 early Monday, lower than USD1.3185 at the London equities close on Friday.
The euro traded at USD1.0946 early Monday, lower than USD1.0987 late Friday. Against the yen, the dollar rose to JPY123.12 versus JPY122.06.
Gold was quoted at USD1,940.21 an ounce early Monday, easing from USD1,955.60 on Friday.
Monday's economic calendar is quiet, with traders likely to focus on comments from Bank of England Governor Andrew Bailey, who speaks in Brussels at 1200 BST.
The UK corporate calendar on Monday has full-year results from Octopus Renewables Infrastructure Trust, Dialight and RTC Group.
By Lucy Heming; lucyheming@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.