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FTSE 100 Slips as China COVID Surge Knocks Energy, Mining Stocks

  • FTSE 100 down 0.2%, FTSE 250 adds 0.4%
  • Oil, mining stocks lead losses on FTSE 100
  • Virgin Money surges on FY profit jump

Nov 21 (Reuters) - The FTSE 100 slipped on Monday, hit by weakness in commodity-linked stocks, as COVID-19 curbs in top metals consumer China and a stronger dollar weighed on the global mood.

The blue-chip FTSE 100 was down 0.2% after hitting its strongest close in over two months on Friday.

UK's energy sector fell 1.1% as oil prices , dropped, while industrial metal miners shed 1.3% on worries about slowing demand from the world's second largest economy.

China is fighting numerous COVID-19 flare ups, from Zhengzhou in central Henan province to Chongqing in the southwest.

"Markets are really moving into safe havens because of China COVID curbs. You're seeing healthcare and utilities being up while the most Chinese sensitive stocks are selling off the most", said Patrick Armstrong, chief investment officer at Plurimi Wealth.

Meanwhile, Wall Street indexes looked set for opening losses as hawkish comments from Federal Reserve officials quashed hopes of smaller interest rate hikes following soft inflation data in October.

Investors were also assessing UK Finance Minister Jeremy Hunt's budget speech last week when he unveiled higher taxes and spending curbs in an effort to reassure markets that the government was serious about fighting inflation.

The domestically focussed FTSE 250 index reversed earlier losses and was up 0.4%.

Among individual stocks, Virgin Money gained 11.4%, topping the midcaps, after the lender reported a 43% increase in full-year profit as Bank of England rate hikes lifted its finances ahead of a likely prolonged economic downturn.

The world's largest contract caterer Compass Group slipped 2.7% after its underlying operating margin expectations for full-year 2023 fell short of market expectations.

Reporting by Shashwat Chauhan in Bengaluru; Editing by Dhanya Ann Thoppil

Source: Reuters

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