Markets tumbled across the world on Monday as fears of a new Chinese lockdown sparked panic buying in Beijing.
Around £40bn was wiped off the FTSE 100 which dropped 1.9pc, amid concerns over a wave of draconian restrictions to prevent the collapse of China's zero Covid policy.
Economists warned the world’s second-largest economy may already be in recession, with pain likely to spread to the rest of the globe.
US crude oil fell below $100 a barrel and iron dropped as much as 11pc on expectations of a drop in demand as factories around China are shut for weeks, potentially sparking another wave of severe shipping disruption that will cause goods shortages in the West.
Germany's DAX fell 1.5pc and the French CAC closed down 2pc, on the day of Emmanuel Macron’s reelection.
Wall Street traded down for much of the day but swung back into the green late on as investors cheered the Twitter deal. The S&P 500 added 0.6pc.
Earlier in the day Shanghai’s CSI 300 fell 5pc to its lowest close in two years.
China is struggling to contain a wave of omicron infections that risk ruining its efforts to keep the country Covid free. Restrictions are already being imposed heavily in Shanghai and other manufacturing hubs, and the authorities announced late on Monday night that they intend to test the entire population of Beijing for Covid three times in a week
Craig Botham, of Pantheon Macroeconomics, estimated that the Chinese economy shrank by 0.5pc in the first quarter of the year and will contract by another 0.6pc in this quarter, meaning it is already in recession. He expects official Chinese figures, which do not always properly account for inflation, to show GDP flatlining in the second quarter.
Mr Botham said the shock from China is “an inflation hit waiting to happen” for the West.
It will be felt across global supply chains “as there is nothing that China doesn’t touch in terms of production. It is going to be everything.”
He said: “You could imagine potentially there might be some offsetting factors because if China is not using shipping, it frees that shipping up for other countries, so other orders might finally arrive from Japan, Korea, Taiwan.
“But then a month or two down the line those factories in those countries are themselves reliant on inputs from China. They will find their production interrupted. It is the kind of thing which builds up and gets worse - April, May, June, I imagine it will get steadily worse, in terms of the pressure on input costs and the drag on activity.”
According to data from consultancy Windward, around a fifth of the global container shipping fleet is currently stuck in congestion at global ports, with around a quarter of those in China.
Jacques Vandermeiren, chief executive of Port of Antwerp-Brugges, said the car industry is particularly vulnerable to delays.
He said: “Shanghai is the biggest port in the world. It's also the port that exports different goods to the world. And especially when it comes to the automotive industry.
“The whole car industry will have to wait before releasing new cars. And you'll see already if you want to buy a new electric vehicle the waiting time is now going from six or seven months to one year. That's an immediate consequence of this.”
John Glen, an economist at the Chartered Institute of Procurement and Supply, said the issues at Chinese ports would “almost undoubtedly” cause problems for British manufacturers.
“It may affect the range of choice of products that we have in our shops,” he said, adding that an “absolute” lack of products looked unlikely. He said there was “no cause” for panic buying in Europe.
British companies are scrambling to bring production closer to home, said Martin McTague, national chairman of the Federation of Small Businesses.
He said: “One in seven firms is having to adjust their supply chains to get the goods they need or find prices that are affordable."
“It’s yet another aspect of operations to worry about as they wrestle with surging utility, fuel and tax costs as well as labour shortages.”
05:12 PM
Wrapping up
That's all from the live blog today, thank you for following! Before you go, have a look at the latest stories from the business team:
Podcast distributor Audioboom said it more than doubled its revenue last year and made a profit for the first time.
The business said revenue reached $60m (£47m) over the year, up 125pc compared to the year before. Profit hit $1.7m from a $3.3m loss previouslu.
Since the year ended the business has also improved its performance, with revenue 107pc ahead in the first three months of 2022.
04:55 PM
Majority of investors not interested in ethical concerns despite ESG push
The majority of UK retail investors are indifferent to whether their money goes into ethical investments despite a push by companies to boost their environmental and sustainable credentials, research has revealed. Louis Ashworth reports:
Research by brokerage Charles Schwab found 66pc of British retail investors do not care whether their investments are sustainable.
04:37 PM
FTSE 100 drops to five-week low
Commodity stocks and banks led a near 2pc drop in the FTSE 100 today as fears of a global economic slowdown sapped sentiment at the start of a week loaded with corporate earnings.
After falling as much as 2.4pc, the blue-chip index pared some losses to close down 1.9pc at 7,380, its lowest in more than five weeks.
Oil majors BP and Shell and miners were among big losers on worries that prolonged Covid lockdowns in China would weigh on demand for metals and crude oil.
"Having spent most of the last few weeks trying to put to one side concerns about events in eastern Europe, a slowdown in China, and the increasing risks of what inflation might do to company earnings, as well as consumer incomes, the final straw appears to be a concern about the prospect of a policy mistake by central banks, and a possible recession by the end of the year," said Michael Hewson, chief market analyst at CMC Markets UK.
04:17 PM
Flying taxis start-up Urban-Air Port raises £20m in fresh funding
A model of a Supernal Electric Air Vehicle on display inside the Air-One vertiport in Coventry - Chris J. Ratcliffe/Bloomberg
Urban-Air Port, a British start-up that’s developing hubs for flying taxis, is closing in on £20m in funding after attracting two new equity investors.
Canadian services firm Dymond Group will invest in the infrastructure business while a European real-estate operator is also planning to back the company. Minority shareholder Hyundai bought a stake earlier this year.
Urban-Air Port has doubled its Series A fundraising goal from an initial £10m amid burgeoning interest in the sector. Manufacturers of electric vertical takeoff and landing craft, or flying taxis, are looking to enter service in the next few years.
03:57 PM
Prices of chocolate and lipstick to rise as world’s top palm oil producer cuts exports
Shoppers face being forced to pay more for goods such as chocolate and lipstick after the world’s biggest palm oil producer curbed exports. Louis Ashworth has more:
Indonesia will halt exports of bulk and package palm olein, a liquid form of the staple ingredient, according to reports.
03:37 PM
Facebook to open retail store to showcase virtual reality hardware
Facebook owner Meta is opening its first ever retail store in California, hoping to introduce people to virtual reality worlds with a try-before-you-buy approach.
The Meta Store will open on May 9 in Burlingame, California, and showcase the company’s hardware products. Visitors are encouraged to “interact with everything” including the Portal video calling hub, Quest 2 virtual reality goggles and Ray-Ban Stories smart glasses.
Tech firms have regularly set up -- then shut down -- physical shops. In 2020, Microsoft said it would shut down its store locations permanently but continue to invest in online sales. In March Amazon said it would close its physical bookstores, “Amazon 4-Star” locations and mall pop-up kiosks as the world’s largest online retailer narrows its brick-and-mortar push to the grocery sector.
03:16 PM
Cambridge University venture arm raises £225m in fresh cash as it eyes more investments in city's start-ups
Hundreds of millions of pounds is set to be funnelled into Cambridge start-ups as investors flock into university cities after years of concerns that too little academic research is being formed into commercial businesses. Hannah Boland writes:
Cambridge Innovation Capital said it had raised £225m to invest into businesses in the city including into university spin-outs.
02:59 PM
Handing over
That's all from me today – thanks for following! Giulia Bottaro will take over from here.
02:52 PM
British Land sells Paddington Central stake for £700m
Property giant British Land has sold a 75pc stake in its Paddington Central development to Singapore's sovereign wealth fund GIC in a £694m deal.
British Land, which retain a 25pc stake, said the deal was worth 1pc below its book value from September.
The FTSE 100 firm originally purchased the development as three buildings and a cluster of nearby retail, leisure and development sites in 2013 for £470m. It grew the project with the later acquisition of neighbouring 1 Sheldon Square for £210m.
The completion of the transaction is unconditional and will be within three months, British Land said. Shares in the company slipped 0.9pc.
02:45 PM
What China's lockdowns mean for British consumers
China Covid lockdown economy - Xinhua/Shutterstock
From cheaper petrol to more expensive patio furniture, China's Covid lockdowns are causing ripple effects across the globe
But what exactly does that mean for consumers? Matt Oliver explains how it could affect you:
Barclays traders 'made over £500m' from emerging market turmoil
Barclays is said to have enjoyed a surge in emerging markets trading last quarter, with revenue climbing to about £500m as the war in Ukraine sparked turbulence.
The bank's traders seized on turbulent currency markets and big moves in credit-default swaps, Bloomberg reports.
The trading boost suggests Barclays may have navigated a quarter during which banks cashed in on higher activity but also faced a heightened risk of losses.
It should help the lender offset a decline in dealmaking activity, although it's already admitted a £450m hit from overselling US products to investors.
Barclays is due to report its quarterly results on Thursday.
02:03 PM
British and Nordic vineyards ‘can end the era of champagne’
UK vineyard champagne Chapel Down - John Nguyen/PA Wire
Vineyards in northern Europe can smash the dominance of champagne and prosecco as global temperatures rise, the head of England's largest winemaker has said.
Hannah Boland has more:
Around 200m bottles of sparkling wine are sold in the UK every year, with just under half of that Italian prosecco and around a third French champagne.
As expected, Wall Street has followed the FTSE 100 into the red as China's Covid outbreaks spooked investors already concerned about surging interest rates.
The S&P 500 opened 0.4pc lower, while the Dow Jones was down 0.2pc. The tech-heavy Nasdaq dropped 0.7pc.
01:24 PM
Elon Musk brands SEC 'shameless puppets' of Wall Street
Amid reports that Elon Musk is on the brink of securing his takeover of Twitter, the billionaire has used the social media platform to launch an attack on the Securities and Exchange Commission (SEC)
The Tesla tycoon described employees at the San Francisco office of the regulator as "shameless puppets of Wall St shortseller sharks".
The comments are a reference to a dispute between Mr Musk and the SEC following his claim on Twitter that he'd secured funding to take Tesla private at $420 per share. Mr Musk and Tesla were both fined $20m and he lost his position as chairman of the company.
But the world's richest man has now doubled down on his defence, insisting the head of Saudi Arabia's sovereign wealth fund had "committed unequivocally" to take Tesla private.
01:07 PM
Burger King to open 200 more UK restaurants
Burger King UK restaurants - Gene J. Puskar
Burger King is aiming to open 200 more UK restaurants over the next five years amid strong demand for the fast food favourite.
The fast food chain said its continued expansion strategy over the past year helped it post rising revenues in 2021, while it also benefited from the easing of pandemic rules.
It said total revenues climbed by 68pc to £211.7m as like-for-like sales lifted by 46pc. It swung to a £33.4m operating profit for the year, compared with a £7.5m loss in 2020.
Burger King UK said it also benefited from the addition of 48 new owned restaurants last year.
It said this included 19 new restaurant openings as well as the acquisition of 29 sites from franchisees, including its flagship Leicester Square location.
The company said it plans to open 200 more sites by 2026 and already has "good visibility" regarding a pipeline of potential locations.
12:44 PM
Private equity firms circle Toshiba
Private equity firms including CVC Capital Partners and KKR are said to be weighing up bids for Toshiba after the Japanese conglomerate said it would open the door to potential buyers.
Bain Capital is also among the potential suitors that have held talks with Toshiba and its partners, Bloomberg reports.
The discussion suggests there's significant interest among buyout firms for the troubled firm, where management and shareholders have been at odds for years over the company’s future.
Bosses had originally pushed back against a sale and proposed instead splitting the company in two, but shareholders voted against that strategy last month.
A takeover of Toshiba, which has a market capitalisation of almost $18bn, could be the biggest ever private equity deal in Japan.
Facebook has accused the UK competition watchdog of being "inconsistent" and "irrational" when it concluded Giphy was a rival in the display advertising sector.
Lawyers for the company, now known as Meta, said at the start of a trial in London that despite the Competition and Markets Authority (CMA) reviewing over 280,000 documents from the companies, not one showed them to compete in the ad market globally or in the UK.
Meta is trying to overturn the CMA's decision to block its $315m takeover of Giphy.
The lawyers argued that nobody apart from Meta was prepared to offer a suitable price for the GIF maker. They said Snap was considering a bid for Giphy but only made an informal, verbal offer valued at $142m.
11:35 AM
Twitter to reach deal with Elon Musk 'as early as today'
Twitter is in the final stage of discussions with Elon Musk and is said to be poised to reach an agreement over a potential takeover as early as today.
The social media company is working to hammer out terms of a transaction, Bloomberg reports.
It follows reports that Twitter's board was "more receptive" to Mr Musk's $43bn (£33bn) takeover offer.
P&O plans to resume Dover-Calais ferries 'this week'
P&O Ferries Dover Calais - Stuart Brock/Anadolu Agency
P&O Ferries is reportedly planning to resume operating between Dover and Calais in the coming days amid accusations it attempted to further reduce the wages of its seafarers.
The firm is selling tickets for cross-Channel sailings on its ship Spirit of Britain, with the first departure at 4.25am on Wednesday from the Kent port, PA reports.
It will be first time it has operated a ferry on the route since it sacked nearly 800 seafarers without notice and replaced them with cheaper agency workers on March 17.
Spirit of Britain was detained by the Maritime and Coastguard Agency on April 12 after safety issues were found, but was cleared to sail on Friday.
Meanwhile, Rail, Maritime and Transport (RMT) union general secretary Mick Lynch claimed P&O Ferries has been "prevented from further cutting the pay of vulnerable agency crew" by "pressure from RMT seafarers".
The firm, owned by Dubai-based logistics giant DP World, insisted no agency workers were asked to take a pay cut.
11:20 AM
Wall Street set to join sell-off
Wall Street looks set to follow the FTSE and Asian stocks into the red when markets open this afternoon.
US futures fell, pointing to extended losses for the benchmark S&P 500 after it shed 2.8pc on Friday to hit the lowest level since mid-March.
The threat of another lockdown in Beijing has rattled investors, with global stock markets slumping and oil prices dropping 5pc.
Futures tracking the S&P 500 and Dow Jones both fell 0.8pc. The tech-heavy Nasdaq lost 0.7pc.
11:15 AM
Pound tumbles 1pc
Sterling has extended its losses against the dollar as investors rush to safe haven assets amid fears about China's fresh Covid lockdowns.
The pound dropped 1pc to hit $1.2711 – its lowest in a year and a half.
11:08 AM
China's Covid troubles pose global threat
Here's some more on China's economic woes, courtesy of my colleague Tim Wallace:
Craig Botham at Pantheon Macroeconomics estimates the world’s second-largest economy shrank by 0.5pc in the first quarter of the year and will contract by another 0.6pc in this quarter.
10:46 AM
£50bn wiped off London stocks
Almost £50bn has been wiped off London's biggest listed companies as China's lockdown woes rattle global markets.
The FTSE 100 is down 2.2pc, while the FTSE 250 shed 1.8pc. The losses mean the biggest 350 firms have lost £49.7bn in market value.
10:40 AM
UK extends sanctions to £1bn of Russian goods
The Government has announced plans to roll out further import bans and tariff increases on Russian goods, taking the total value of goods targeted to more than £1bn.
The new sanctions. will include import bans on silver, wood products and high-end products from Russia including caviar.
Tariffs will also be increased by 35 percentage points on around £130m worth of products from Russia and Belarus, including diamonds and rubber.
International Trade Secretary Anne-Marie Trevelyan said:
The UK continues to stand shoulder-to-shoulder with Ukraine and is working closely with our international partners to inflict maximum damage to Putin’s regime, reducing the resources and funds he needs to carry out this illegal war.
10:28 AM
Bitcoin falls to six-week low as investors shun risk
Bitcoin has extended this month's losses as investors shied away for risky assets amid a Covid outbreak in China and the threat of Federal Reserve interest rate rises.
The largest cryptocurrency fell as much as 3.2pc to $38,236 – the lowest since March 15 and down more than 20pc since last month's high.
The second biggest digital coin Ether slumped as much as 2.8pc to $2,799, its lowest since March 18.
Analysts at Nydig wrote: "As it becomes more valuable to hold dollars, some investors may reallocate from Bitcoin or gold to the dollar. Like the negative correlation of Bitcoin to the dollar, the negative correlation to Bitcoin to real rates has only emerged in the last couple of years."
10:14 AM
Manufacturers raises prices at fastest rate since 1979
UK manufacturers have raised prices at the fastest pace in more than four decades as they scramble to cover soaring raw material and energy costs.
The CBI's latest survey of the sector found companies ranging from food producers to car manufacturers suffered major cost pressures in the first three months of the year, with the crisis set to deepen.
Costs jumped the most in almost half a century. Meanwhile, demand eased, investment intentions weakened and optimism fell more sharply than at any time since the pandemic began.
10:00 AM
Pound slumps as growth fears mount
While the FTSE 100 languishes in the red, it's also been a bad morning for sterling.
The pound has dropped 0.8pc against the dollar to $1.2732 – its lowest since September 2020. Against the euro, it shed 0.1pc to 84.22p.
Markets are rushing to safe haven assets such as the dollar as China's deteriorated Covid situation threatens to further derail the global economic recovery.
Steven Barrow, analyst at Standard Bank, said:
The dark clouds of recession are starting to hang over many advanced countries right now, but it seems to us that the UK is at greater risk than most and this clearly puts UK assets like stocks and the pound in the dock as well.
09:33 AM
WPP looks to take on THG with ecommerce arm
WPP Everymile THG - WPP
Advertising giant WPP has launched an end-to-end ecommerce platform to handle the logistics and delivery of products sold by its clients.
The FTSE 100 group set up direct-to-consumer sites for brands when the pandemic shut most shops. Its new division Everymile will expand this offer to handle the entire process from attracting a customer to delivering the product to their door.
It will pit WPP, which was founded by Sir Martin Sorrell, against new rivals including beleaguered online retailer The Hut Group.
Everymile will have a revenue share commercial model. It will be overseen by WPP's finance director John Rogers, former Argos chief executive and finance director at Sainsbury's.
09:17 AM
Oil prices sink 5pc on China demand fears
Oil prices have slumped 5pc this morning amid fears a fresh Covid outbreak in China could hammer demand.
Benchmark Brent crude crashed to just above $101 a barrel, while West Texas Intermediate was trading at $97.
Fears are mounting that Beijing could follow Shanghai into lockdown as Beijing pursues its strict zero Covid strategy.
Shoppers have begun panic buying after authorities began mass testing of all residents.
09:07 AM
Gas prices rise amid Putin's roubles threat
Natural gas prices pushed higher this morning, with traders still focused on Putin's demand that European nations make payments in roubles.
Benchmark prices rose as much as 5.7pc before paring some of the gains. Supplies from Norway are set to increase, but remain about 10pc below last month's average du to major maintenance work.
Forecasts for cooler weather over the next few weeks is also pushing up prices.
But there main uncertainty remains over whether a resolution can be found for the Kremlin's demands. The EU has said it won't pay for gas in roubles, while Putin has threatened to turn off the taps if his demands aren't met.
08:58 AM
ONS: 90pc of Britons report rise in cost of living
Around nine in 10 UK adults reported an increase in their cost of living over the last month in March amid a jump in energy bills and higher prices for a range of consumer goods.
Nearly a quarter said it was difficult or very difficult to pay their usual household bills in the last month compared to a year ago, according to the ONS.
There was also a grim outlook for the year ahead. Among all adults, 43pc reported they would not be able to save money in the next 12 months. That's the highest percentage since this question was first asked in March 2020.
08:47 AM
UK firms must improve modern slavery reports, warns watchdog
British companies are guilty of "significant shortcomings" in their modern slavery reporting and many are breaking the law.
That's according to the Financial Reporting Council, which found one in 10 firms did not provide a modern slavery statement despite it being a legal requirement.
It added that most of those that did were "particularly poor" at setting out how they measure steps to minimise the risks.
The FRC report found that companies may be reluctant to disclose their performance on modern slavery because they worry it may harm their reputation.
However, not doing so risks additional costs as shareholders demand more transparency and the UK puts more regulator focus on the issue.
08:37 AM
German business confidence improves despite war
German business confidence unexpectedly improved this month as companies appeared to overcome the initial shock of Russia's war in Ukraine.
A closely-watched survey from the Ifo Institute rose to 86.7 in April from 84.9 in March, outstripping expectations of a decline.
The surprise improvement comes even as German firms grapple with supply chain troubles and a sharp rise in costs as a result of the war. The conflict has also mounting more pressure on household budgets.
Pressure is mounting on Chancellor Olaf Scholz to agree to sanctions on Russian gas – a move he's resisted, saying it could spark large-scale job losses and fuel inflation further.
Clemens Fuest, President of Ifo, said:
Sentiment in the German economy has stabilised at a low level. After the initial shock of the Russian attack, the German economy has shown its resilience.
08:21 AM
Green group warns Shell over emissions liability
Shell environmental group emissions - Daniel Harvey Gonzalez
A group that secured a Dutch court order against Shell forcing the energy giant to cut its emissions further has warned the company's board of possible personal responsibility if it fails to implement the verdict.
The Hague District Court last year ordered Shell to reduce carbon emissions produced by it, its suppliers and customers by 45pc by 2030 from 2019 levels – a landmark decision that could have implications for energy companies around the world.
Shell is appealing against the ruling.
The group Friends of the Earth/Milieudefensie said it sent a letter to the company's boards and individual representatives – including chief executive Ben van Beurden – saying it was not acting to implement the verdict.
In the letter, seen by Reuters, the group wrote:
Shell has appealed, but the court declared the judgment provisionally enforceable, which means the necessary climate action cannot be suspended pending the appeal.
08:08 AM
FTSE 100 extends losses to 2pc
The FTSE 100's woes have deepened, with losses extending to 2pc.
Energy and mining stocks remain the biggest drags on the blue-chip index, as China lockdown jitters fuel concerns about demand.
Banking stocks have also taken a hit, with investors expecting the Federal Reserve to start lifting US interest rates aggressively to tackle inflation.
08:01 AM
McColl's shares nosedive on funding warning
McColl's shares were in freefall this morning after the convenience store chain issued a glum update.
The company crashed 50pc after it said its shares were unlikely to benefit from a potential financing that could help it resolve short-term funding issues.
The cash-strapped firm also forecast weak annual profit following lower consumer spending over the Easter period and supply troubles.
The London-listed firm expects to delay the publication of its full-year results until the financing talks are resolved.
Sky News reported that partner Morrisons is considering options to deal with the financial struggles of McColl's.
The company, which operates more than 1,100 convenience stores, said it was in talks with its wholesale partners to mitigate the product availability issues as shortages of its key products intensified last year.
07:51 AM
Steel advice firms blocked from selling assets amid pensions scandal
The City watchdog is using emergency powers to prevent financial advisers who gave unsuitable advice to members of the British Steel Pension Scheme from disposing of assets to avoid paying compensation.
The Financial Conduct Authority (FCA) has introduced the asset retention rules without consultation because of the "risk that some firms will take steps to get rid of their assets if the rules were consulted on first".
The temporary measures apply to companies that advised five or more BSPS members to transfer out of the pension scheme between May 2016 and March 2018.
The regulator has set out plan to compensate former members of the scheme after finding almost half of the advice given to steelworkers using the plan by financial advisers were unsuitable.
The FCA said it expects £71.2m of compensation to be paid to individuals who lost out after exiting the defined pension plan.
07:33 AM
FTSE risers and fallers
The FTSE 100 has slumped to its lowest level in five weeks, taking its cue from a dramatic sell-off on Asian markets overnight.
The blue-chip index fell as much as 1.7pc to its lowest since March 18, with 96pc of its constituents in the red.
Energy and commodity stocks were the biggest drag on the index, as the prospect of more lockdowns in China sparked a drop in oil and metal prices.
Oil giants BP and Shell were down 3.9pc and 3.1pc respectively. Glencore shed 6.1pc, while Anglo American and Rio Tinto shed 5.9pc and 2.4pc.
Banks also lost ground amid concerns the US Federal Reserve will start to lift interest rates aggressively. HSBC and Standard Chartered were both down more than 2pc.
Russian miner Polymetal International bucked the sombre mood, jumping as much as 9pc after it reported an increase in revenue thanks to higher gold prices.
The domestically-focused FTSE 250 lost 1.3pc.
07:26 AM
Activist investor attacks Just Eat board
Just Eat Takeaway Cat Rock Capital - Cezary Kowalski/SOPA Images/LightRocke
An activist investor has launched a fresh assault on Just Eat Takeaway's board, urging other investors to oust the firm's finance boss and several other directors.
Cat Rock Capital, which holds an almost 7pc stake in the delivery company, has long called for a shake-up of the firm but stepped up its assault after a disappointing trading update last week.
In an apparent concession to Cat Rock's demands, Just Eat also said last week it's looking to sell its US arm Grubhub, less than two years after agreeing to buy the operation in a £5.75bn deal.
In a new statement, Cat Rock said the firm made a "mistake" by buying Grubhub and must change its leadership team to help "rebuild it credibility".
07:13 AM
Chinese stocks suffer biggest fall since February 2020
Chinese stocks have suffered their biggest slump since the first Covid lockdown as resurgence of the virus in Beijing rattled investors.
The CSI 300 index fell 4.9pc, marking its biggest decline since February 2020. The Shanghai Composite shed more than 5pc, while the Shenzhen Composite dived 6.5pc. Hong Kong's Hang Send index lost 3.9pc.
07:02 AM
FTSE 100 drops 1.6pc
As expected, the FTSE 100 has dropped sharply at the opening bell amid wider turmoil on global markets.
The blue-chip index slumped 1.5pc to 7,406 points.
06:51 AM
House prices hit record for third month
The UK house market boom just keeps going, with prices hitting a record high for a third straight month.
A shortage of supply has so far outweighed rising interest rates and the cost-of-living crisis, although analysts have warned the growth is likely to slow later this year.
Average prices hit £360,101 in April – up 9.9pc from a year ago, according to the latest data from Rightmove.
Asda is planning to spend more than £73m to help customers and staff weather the cost-of-living crisis over the next year.
The supermarket chain said it's reducing the price of more than 100 popular items as part of the measures. It will also increase the hourly fate of pay for shop-floor workers to £10.10 from July.
It comes after rival Morrisons said it would slash the price of more than 500 staple items.
Mohsin Issa, co-owner of Asda, said:
We know that household budgets are being squeezed by an increasing cost of living and we are committed to doing everything we can to support our customers, colleagues and communities in these exceptionally tough times.
06:32 AM
Inflation fears hit markets
Good morning.
Markets are set to begin the week firmly in the red as fears over surging inflation, slowing economic growth and lockdowns in China all hit sentiment.
Asian markets tumbled overnight, with Chinese stocks on track to hit their lowest level since May 2020.
The FTSE 100 was set to follow suit, while European stocks also pointed lower despite relief about French President Emmanuel Macron's election victory.
The negative mood music comes as the Federal Reserve prepares to lift interest rates to tackle red-hot inflation, while ongoing lockdowns in China sparked demand fears and dragged down oil prices.
5 things to start your day
1) British Airways to base cabin crew in Madrid The UK flag carrier is to open a cabin crew base in Madrid as bosses scramble to avoid the recent travel chaos lasting throughout the summer
Asian markets sank Monday on growing concerns of a sharp hike in US interest rates as officials struggle to contain runaway inflation, while oil was hit by expectations Chinese demand will dry up owing to Covid lockdowns. Hong Kong, Shanghai and Taipei all fell more than two percent, while Tokyo, Seoul, Singapore, Manila and Jakarta were also deep in the red.
Coming up today
Corporate: Polymetal International (interim results)
Economics: Rightmove house price index (UK), construction output (EU), Chicago Fed National Activity Index (US)
