Summary
A quick recap
Stock markets have begun the week with fresh worries about the global economy, after new outbreaks of the fast-spreading Omicron subvariant in several Chinese cities.
China’s CSI 300 index posted its biggest one-day drop in seven weeks, while gambling company stocks slumped after Macau closed down non-essential businesses.
Mining company and travel stocks have dropped in London, on concerns of an economic slowdown and weaker demand for commodities.
Victoria Scholar, Head of Investment at Interactive Investor sums up the day:
It was a tough start to the week for Chinese equity markets with Hong Kong’s HSI closing down almost 3% while the Shanghai Composite also finished the session in the red.
Tech behemoths like Tencent and Alibaba were among the hardest hit after facing fines from Beijing for reportedly not following anti-monopoly rules while casino stocks like Wynn Macau and Sands China were sharply lower following the news of fresh coronavirus lockdown measures in Macao.
Oil markets were also rattled after the first case of the highly transmissible Omicron subvariant was discovered in Shanghai as China’s draconian zero-tolerance approach to covid continues to take its toll on the world’s second largest economy.
Today’s volatility puts further strain on international investor confidence in China with a cocktail of pressures sending its equity markets sharply lower.
There has been fresh travel disruption in the UK, with Heathrow cancelling over 60 flights as it continues to struggle to to handle passenger numbers.
The UK’s largest airport also warned that it might have to ask airlines to cut more flights, if their existing reduction plans don’t go far enough.
Budget airline Wizz Air is to cut more summer capacity, as it tries to avoid disruption.
Shares in Twitter tumbled 7% after Elon Musk said he was terminating the takeover deal -- setting the scene for a courtroom battle.
And Uber’s shares fell 5% after leaked files exposed its attempts to lobby Joe Biden, Olaf Scholz and George Osborne, and its hiring of a political operative linked to Russian oligarchs in an attempt to buy influence in the country.
Shares in energy producers jumped, after outgoing prime minister Boris Johnson ditched mooted plans to introduce a windfall tax on the sector.
Soaring prices have plunged more people into financial trouble than Covid-19, according to a study tracking the fortunes of UK households since the start of the pandemic.
Former Formula One boss Bernie Ecclestone will face charges of fraud by false representation after an investigation by UK tax authorities which allegedly found undeclared assets worth more than £400m overseas.
Updated
Protest in China over frozen bank accounts ends in violence
A rare large-scale protest in China’s central Henan province has been violently broken up by unidentified security personnel, amid outcry over a financial scandal that has exposed the fragility of the country’s banking system.
A crowd of more than 1,000 protesters, according to some estimates, had gathered on Sunday in front of the Zhengzhou sub-branch of the People’s Bank of China to attempt to recover frozen savings held in rural banks.
Footage reviewed by the Guardian showed protesters demanding local authorities help them retrieve their savings. Some held banners that said: “Henan banks, give me my money back!”, while others called for China’s premier, Li Keqiang, to personally intervene.
White-shirted security guards confronted the crowd. Video showed them dragging protesters and beating them up. One man with a swollen eye said he had been beaten by “gangsters” and dragged on to a bus by police.
Michael Pettis, a professor of finance at Peking University, said the events in Henan had been a “very worrying reminder” of what would happen if China’s existing economic model became unsustainable.
“Because the past decade in China has seen a real estate bubble of historic proportions, along with among the fastest increases in debt ever seen, I suspect we are going to see a lot more of this in the next few years.”
