The FTSE 100 drops on China, lower metal prices and political turmoil

The resurgence of Covid-19 cases in China dented sentiment, with the FTSE 100 down 0.4% this morning. The city of Wugang is under lockdown for three days, with further cities likely to follow. Metal prices fell as a result, dragging mining stocks down.

Gas price surged after Nord Stream 1, the biggest pipeline carrying Russian gas to Germany, started a 10-day maintenance. Many investors fear that the gas may not return after July 21.

This has led to a drop in the price of the Euro, which also also dragged Sterling down. Britain is still facing political turmoil, after Boris Johnson announced its resignation. It was just announced that the process to appoint a new leader would be concluded by September 5.

Among stocks, mall operator Hammerson dropped 7.6% after Royal Bank of Canada downgraded its shares to "underperform".

 

Things to read today:

Wall Street recession fears stoked by patchy US economic data (Financial Times)

UK Recession Threat is Now Almost 50-50 for Economists (Bloomberg)

Putin Most Likely to cut gas supplies to Europe (Daily Telegraph)