London markets open flat on 5,763 points amid US-China tensions over origin of Covid – while Rolls Royce shares slide 4.2% to bottom of FTSE 100 after reports of 15% staff cuts
- London markets opened flat today on 5,763 points as US-China tensions flared
- Rolls Royce tumbled on reports it was considering job cuts to ride out the slump
- Trump pinned the blame for the pandemic on China and threatened new tariffs
London markets opened flat today on 5,763 points as US-China tensions flared up again over the origin of the coronavirus.
The index of Britain’s biggest firms opened on the same number of points as Friday but Rolls Royce tumbled on reports it was considering job cuts to ride out an economic slump caused by the pandemic.
The aero-engine maker fell 4.2 per cent to the bottom of the FTSE 100 after a source said it was mulling cutting up to 15 per cent of its workforce as customers cut production and airlines parked planes due to a halt in global travel.
It comes amid continuing hostilities between the US and China after President Trump pinned the blame for the pandemic on China and threatened new tariffs.
In the latest salvo, U.S. Secretary of State Mike Pompeo on Sunday said there was ‘a significant amount of evidence’ the virus emerged from a laboratory in the central Chinese city of Wuhan. An editorial in China’s Global Times said he was ‘bluffing’.
Europe’s stock markets sank at the open on Monday on simmering US-China tensions, with Frankfurt and Paris falling far more sharply than London after a long holiday weekend.
Asia also suffered steep losses, tracking heavy pre-weekend falls on Wall Street, after US President Donald Trump sparked fears of a renewed trade war with China over its role in the coronavirus pandemic.
In initial European trade, Frankfurt’s benchmark DAX index fell 2.8 percent to 10,557.23 points and the Paris CAC 40 shed 3.4 percent to 4,416.50, compared with the closing levels on Thursday.
‘Risk sentiment is very fragile as we enter another critical week in terms of economic and corporate data. Tail risks are rising and Donald Trump’s attacks on China are really not helping,’ Swissquote Bank analyst Ipek Ozkardeskaya said.
A woman wearing a face mask walks past a board at the Hong Kong Stock Exchange today
‘Equities in Europe opened sharply lower, as expected. Losses in the FTSE were less than the rest of the European continent, but the investor mood points at further losses throughout the session,’ she added.
Trump had suggested he could lump new tariffs on China over its handling of the virus outbreak, claiming he had seen evidence linking a Wuhan lab to the contagion.
The warning fanned worries of a return to the trade standoff between the world’s top two economies that battered global markets last year until a partial agreement was reached in December.
The domestically focussed mid-cap index was down 1.7% at 0705 GMT.
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