London open: Stocks down on China lockdowns, central bank concerns

London stocks were in the red on Monday morning, tracking losses on Wall Street at the end of the previous week, as ongoing Covid-19 lockdowns in China continued to dent sentiment.

At 0851 BST, the FTSE 100 was down 1.87% at 7,380.88, and the FTSE 250 was 1.63% weaker at 20,540.55.

“The pace of reporting is frenetic in the UK this week, where scrutiny on the numbers and outlook will be as intense,” said Interactive Investor head of markets Richard Hunter.

“Each of the UK banks will post first quarter updates, following a tepid showing from the US banks on the whole.

“Focus may also come to bear on shareholder returns and the announcement of any further dividend or share buyback developments, given the embarrassment of riches which the UK banks currently carry in terms of excess capital.”

Elsewhere, and following some weak retail sales numbers last week, Hunter said the likes of Primark owner Associated British Foods would be watched for evidence of changing consumer behaviour.

“After some disappointment surrounding the general merchandise and Argos divisions at the last update, Sainsbury will also be scanned for improvements as it reports full-year results,” he added.

“Any progress within company updates will also need to be robust to underpin a market which has so far weathered the global economic storm this year.

“However, with the skittish sentiment of the US markets passing through to the UK via Asia in early trade, the FTSE 100 has seen its defensive work this year evaporate in an instant, with the premier index now standing largely flat in the year to date.”

Also dampening sentiment were reports that the European Union was preparing smart sanctions against imports of Russian oil, although in remarks to Die Welt the bloc's foreign policy said there was not yet enough support for a complete embargo nor for punitive tariffs.

Elsewhere on the geopolitical front, UN chief Antonio Guterres, was scheduled to visit Ankara on Monday and Moscow on Tuesday in a bid to try and re-energise peace talks as Russia’s unprovoked invasion of Ukraine entered its ninth week.

Some observers were hoping that an agreement on evacuating the city of Mariupol or for a ceasefire during Orthodox Easter might generate the needed momentum for talks to succeed.

On the economic front, the Confederation of British Industry was set to release its Industrial Trends survey for April at 1100 BST.

Germany's IFO institute was also due to publish the results of its closely-followed business confidence survey for the eurozone’s largest economy during the morning.

In equities, Anglo American was tumbling after the Chilean environmental regulator recommended denying an extension to its Los Bronces copper project.

Chile's Environmental Assessment Service (SEA) issued the recommendation last week, with a final decision on $3.3bn investment expected soon.

"The SEA’s recommendation is despite the strong support for the project offered to date by 23 of the 25 technical services bodies and government ministries that form part of the assessment process," Anglo American said in a statement.

Elsewhere, real estate investor British Land was in the red after selling a 75% stake in the bulk of its Paddington Central assets to GIC for £694.0m, to establish a new joint venture between the pair.

British Land said establishment of the joint venture, which was unconditional and will be within three months, would see it deliver against one of its key priorities of proactively recycling capital out of mature assets where it had created "considerable value".

Urban Logistics was also weaker after reporting the deployment of a further £45m of capital at a blended net initial yield of 6.7% since 28 March.

The FTSE 250 real estate investment trust said its total deployment since its December fundraise now stood at £184m, at a blended net initial yield of 5.4%.

It had agreed five new lettings, three rent reviews and two lease regears in the period, covering 630,000 square feet of space, while rent reviews and regears were settled at a blended 13% increase over passing rent, the board said.

LondonMetric Property was below the waterline after buying six London urban logistics warehouses in separate transactions for £26.7m, reflecting an anticipated blended initial yield of 4.3% and a reversionary yield of more than 4.5%.

The assets are expected to generate a total rent of £1.2m a year, while in a separate deal, the company sold a multi-let industrial estate for £8.5m.

On the upside, Polymetal International was in the green after it reported a rise in first-quarter revenue, driven by higher prices and despite a fall in production.

Revenue for the three months to March 31 increased 4% year on year to $616m, while production of gold equivalent was down 6% to 372,000 troy ounces.

Polymetal said it still expected to produce 1.7 million ounces in 2022.

Market Movers

FTSE 100 (UKX) 7,385.56 -1.81%
FTSE 250 (MCX) 20,573.29 -1.48%
techMARK (TASX) 4,328.77 -1.31%

FTSE 100 - Risers

Unilever (ULVR) 3,590.50p 1.40%
Reckitt Benckiser Group (RKT) 6,210.00p 1.17%
Hikma Pharmaceuticals (HIK) 2,021.00p 0.45%
International Consolidated Airlines Group SA (CDI) (IAG) 149.80p 0.32%
Coca-Cola HBC AG (CDI) (CCH) 1,628.00p 0.22%
BT Group (BT.A) 186.65p 0.13%
Pearson (PSON) 783.40p 0.08%
Meggitt (MGGT) 772.80p 0.05%
WPP (WPP) 1,012.00p 0.05%
National Grid (NG.) 1,172.50p 0.00%

FTSE 100 - Fallers

Glencore (GLEN) 441.85p -7.21%
Anglo American (AAL) 3,219.50p -6.96%
Rio Tinto (RIO) 5,358.00p -5.40%
BP (BP.) 375.60p -4.46%
Aveva Group (AVV) 2,407.00p -4.45%
Antofagasta (ANTO) 1,430.00p -4.32%
Shell (SHEL) 2,104.00p -3.84%
Prudential (PRU) 1,010.50p -3.21%
Endeavour Mining (EDV) 1,965.00p -2.82%
Ashtead Group (AHT) 4,511.00p -2.76%

FTSE 250 - Risers

Polymetal International (POLY) 280.00p 3.70%
Darktrace (DARK) 432.20p 1.84%
PureTech Health (PRTC) 187.60p 0.86%
Great Portland Estates (GPE) 705.50p 0.79%
easyJet (EZJ) 572.40p 0.70%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 315.50p 0.64%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 170.00p 0.59%
Wizz Air Holdings (WIZZ) 3,137.00p 0.51%
JPMorgan Japanese Inv Trust (JFJ) 466.50p 0.11%
TUI AG Reg Shs (DI) (TUI) 235.00p 0.00%

FTSE 250 - Fallers

Ferrexpo (FXPO) 163.20p -6.42%
BlackRock World Mining Trust (BRWM) 677.00p -6.10%
Watches of Switzerland Group (WOSG) 1,059.00p -5.19%
Hochschild Mining (HOC) 120.70p -5.04%
Chrysalis Investments Limited NPV (CHRY) 163.60p -4.99%
Tullow Oil (TLW) 53.75p -4.36%
Fidelity China Special Situations (FCSS) 228.50p -4.19%
Energean (ENOG) 1,130.00p -4.16%
Liontrust Asset Management (LIO) 1,172.00p -3.93%
Harbour Energy (HBR) 487.70p -3.81%