(Alliance News) - Stocks in London were called to open lower on Monday, starting the week on the back foot, despite markets in Asia strengthening.

IG says futures indicate the FTSE 100 index of large-caps to open down 43.8 points, or 0.6%, at 7,291.04 on Monday. The blue-chip index rose 146.21 points, 2.0%, to 7,334.84 on Friday, notching a 4.1% weekly gain.

"Friday saw wild trading and sharp drop in the dollar despite payrolls, due to rumours China would soon reopen. This was based on one report from a retired Chinese health official and an anonymous screen shot. People who know something about China were deeply sceptical. And lo and behold, China held a press conference on Saturday and shot down the idea of an end to Covid Zero," analysts at Rabobank commented.

China said on Saturday that it will "unswervingly" stick to its zero-Covid policy, deflating market hopes that Beijing would cast aside some of its economically damaging virus curbs.

Even so, stocks in Asia gained a bit on Monday. The Shanghai Composite was up 0.2% and the Hang Seng in Hong Kong added 2.9%. The Nikkei 225 ended up 1.2% in Tokyo and the S&P/ASX 200 rose 0.6% in Sydney.

"China's reopening hopes are not entirely dimmed even though National Health Commission officials ruled out any imminent change to China's Covid policies," SPI Asset Management analyst Stephen Innes commented.

Apple warned on production of iPhones as it grapples with Covid curbs in China.

Apple said Covid restrictions have "temporarily impacted" production at the world's largest iPhone factory in central China, warning that customers will now face longer wait times ahead of the holiday season.

Foxconn, Apple's principal subcontractor, locked down its massive factory in Zhengzhou last month after a spike in infections – in line with China's zero-Covid policy.

"Covid-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China," California-based Apple said in a statement late Sunday.

"The facility is currently operating at significantly reduced capacity."

Despite strong demand for Apple's products ahead of the holiday season, "we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated", Apple said.

Sterling was quoted at USD1.1330 early Monday in London, up from USD1.1301 late Friday. The euro traded at USD0.9945, higher from USD0.9915. Against the yen, the dollar was flat at JPY147.20, versus JPY147.16.

UK Chancellor Jeremy Hunt is looking at tax rises and spending cuts totalling up to GBP60 billion as he aims to address the black hole in the public finances, it has been reported.

According to PA, Treasury sources confirmed that up to GBP35 billion of the "fiscal tightening" could come in the form of reduction in spending, signalling a further squeeze on hard pressed services.

Government ministers must present the key points of the plan to the Office for Budget Responsibility so that it can prepare its economic forecast in time for the autumn statement on November 17.

Hunt's room for manoeuvre has become more constricted after the Bank of England warned last week that the country is facing the longest recession in more than a century.

Gold was quoted at USD1,671.15 an ounce early Monday UK time, down slightly from USD1,672.83 at the London equities close on Friday. Brent oil was trading at USD97.70 a barrel, up from USD97.52.

Monday's economic calendar has the latest Halifax UK house price index reading and German industrial production data at 0700 GMT.

Monday's UK corporate calendar has a trading statement from Kingscourt, Ireland-based building materials company Kingspan.

Already out, Ryanair "modestly" lifted its annual traffic guidance and said it is hopeful of minimising "winter losses" if it avoids hits from Covid-19 and the war in Ukraine.

The budget airline's revenue in the half-year that ended September 30 jumped to EUR6.62 billion from EUR2.15 billion a year earlier.

It swung to a EUR1.42 billion pretax profit from a EUR99.9 million loss.

Ryanair now expects full-year traffic of 168 million passengers, lifted from prior guidance of 166.5 million.

By Eric Cunha; ericcunha@alliancenews.com

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