Stock markets fell across the world on Monday amid fears that China’s growing Covid lockdown could cause a global slowdown in supplies and economic growth.

About £40bn was wiped off the value of shares on the FTSE 100, which fell 1.9 per cent, as looming restrictions in Beijing sparked panic-buying.

The Chinese capital is to conduct mass testing of most of its 21 million citizens and has imposed lockdowns on individual residential buildings and one section of the city.

While only 70 cases have been found since the outbreak surfaced last week, authorities have rolled out strict measures under China’s ”zero-Covid” approach to managing the virus.

Chinese shares saw their biggest slump since the start of the pandemic while European stocks fell to their lowest in more than a month.

Economists have warned that the world’s second-largest economy may already be in recession, with a potential knock-on effect around the world.

Wall Street was more mixed, with Twitter shares helping to lift the Nasdaq after news of its purchase by Elon Musk.

Oil majors Chevron Corp and ExxonMobil fell more than 3 per cent each, while oilfield services companies Schlumberger NV and Halliburton Co dropped nearly 9 per cent each. The S&P 500 materials index fell 1.75 per cent and utilities lost 2 per cent.

“Earnings are going to be crucial to the mindset of the of the average investor. The playbook was: buy Apple, buy Netflix, buy Google and throw away the key, but that playbook is no longer working,” said Jake Dollarhide, chief executive officer at Longbow Asset Management. “What is the outlook for these companies going to be?”

Investors were also on edge at the start of a week that will see megacap companies like Google-parent Alphabet Inc, Microsoft Corp, Inc and Apple Inc publish quarterly results.

Bleak results from pandemic darling Netflix along with surging bond yields hit high-growth stocks last week, bringing year-to-date losses in the tech-heavy Nasdaq to about 18 per cent.

Reuters contributed to this report

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