(Alliance News) - Stock prices in London opened lower on Thursday amid risk-off sentiment across Europe, as concerns grew about rising Covid cases in China.

"China's grand reopening after three years of government-imposed isolation was supposed to be a boon to the global economy, help skirt a deep recession, and rescue risk sentiment after a cruel year for an array of financial assets," said Stephen Innes at SPI Asset Management.

"Instead, Xi Jinping's economically motivated abandonment of strict virus containment protocols is providing markets with an inflation headache and a sense of 'deja vu all over again', smacking weary investors right in the chops."

The FTSE 100 index opened down 45.52 points, or 0.6%, at 7,451.67. The index is now down 0.7% for the year as a whole.

The FTSE 250 was down 137.10 points, or 0.7%, at 18,748.40, and the AIM All-Share was down 1.56 points, or 0.2%, at 830.72.

The Cboe UK 100 was down 0.7% at 745.36, the Cboe UK 250 down 0.8% at 16,230.02, and the Cboe Small Companies down 0.7% at 13,044.56.

Hospitals across China have been overwhelmed by an explosion of Covid cases following Beijing's decision to lift strict rules that had largely kept the virus at bay but tanked its economy and sparked widespread protests. 

On Monday, the country said it would bring an end to mandatory quarantine on arrival – prompting many jubilant Chinese citizens to make plans to travel abroad.

In response, the US and a number of other countries announced they would require negative Covid tests for all travellers from mainland China.

In Asia on Thursday, the Japanese Nikkei 225 index closed 0.9% lower. In China, the Shanghai Composite closed down 0.4%, while the Hang Seng index in Hong Kong was 0.8% lower. The S&P/ASX 200 in Sydney closed down 0.9%.

The US will require negative Covid tests from all air travellers from China, saying Beijing is not sharing enough information about the surge in Covid cases there.

From January 5, all air passengers two years and older who originate from China must obtain a negative Covid-19 test less than two days before departure and provide it to their airlines, the US Centers for Disease Control & Prevention said.

New York stocks ended in the red on Wednesday, with the Dow Jones Industrial Average ending down 1.1%%, the S&P 500 down 1.2% and the Nasdaq Composite down 1.4%.

There are no plans to introduce mandatory Covid tests for visitors from China, a UK government spokesperson has said, after the US became the latest country to impose restrictions.

The spokesperson added the UK Health Security Agency will continue to closely monitor the prevalence and spread of harmful variants and keep available international data under review.

In London early Thursday, Kazera Global sank 19% after it said its results will not be published before the end of the year, due to delays at its wholly-owned subsidiary African Tantalum.

The diamond and rare earths explorer now expects to release its results for the financial year that ended June 30 during February. As a result, its shares will be suspended from trading on AIM in London from Tuesday next week, the first trading day of 2023.

Allergy Therapeutics plunged 54% as it also said its shares will be suspended next week, due to delays in completing the audit of its annual results.

Back in September, Allergy Therapeutics announced its unaudited preliminary results for the financial year that ended June 30. It sunk to a pretax loss of GBP12.7 million from a profit of GBP3.7 million the year prior. Revenue dropped to GBP72.8 million from GBP84.3 million.

"It is not aware of any material change that will be required to be made to the results, and it is actively working to finalise the audit and publication of its annual report and accounts," Allergy Therapeutics said.

Argo Blockchain jumped 7.7% as it closed its deal with Galaxy Digital.

On Wednesday, Argo Blockchain said it had entered an agreement for a subsidiary to sell its Helios Facility in Dickens County, Texas to Galaxy Digital for USD65 million.

Argo said the subsidiary also will refinance asset-backed loans with a USD35 million loan from Galaxy. The loan will be backed by Argo's fleet of 23,619 Bitmain S19J Pro cryptocurrency mining machines currently operating at the Helios site.

In European equities on Thursday, the CAC 40 index in Paris was down 0.5%, while the DAX 40 in Frankfurt was down 0.3%.

The pound was quoted at USD1.2037 at early on Thursday in London, slightly higher compared to USD1.2029 at the close on Wednesday.

The euro stood at USD1.0626, higher than USD1.0617 late Wednesday. Against the yen, the dollar was trading at JPY133.69, lower compared to JPY134.23.

Brent oil was quoted at USD82.67 a barrel at early in London on Thursday, marginally down from USD82.87 late Wednesday. Gold was quoted at USD1,809.00 an ounce, higher against USD1,801.04.

Still to come on Thursday's economic calendar, there are US weekly unemployment insurance claims at 1330 GMT.

By Heather Rydings, Alliance News senior economics reporter

Comments and questions to newsroom@alliancenews.com

Copyright 2022 Alliance News Ltd. All Rights Reserved.