Weakness Back in Town as China Returns to the Menu

Ongoing concerns over sovereign risk and China's monetary policy weighed on market sentiment on Monday

Holly Cook 15 March, 2010 | 5:57PM
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The UK’s benchmark index fell back below 5,600 points on Monday, taking its lead from Asian markets and passing the trend onto Wall Street, amid weaker oil prices and a warning from Moody’s regarding sovereign risk.

Both the blue-chip and mid-cap indices had shed 0.6% by close play, with the FTSE 100 index down 34.7 points at 5,591.0 and the FTSE 250 index 60.5 points weaker at 9,881.1.

A warning from Moody's that risks are growing for the four largest AAA-rated countries—the UK, France, Germany and the US—dampened the mood, while Chinese Premier Wen Jiabao also raised alarm by suggesting financial system risks and high unemployment levels could mean a double-dip recession is on the cards. In addition, crude-oil prices dragged energy stocks lower and technology plays were under pressure from rumours Google is increasingly likely to close its Chinese language site.

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Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites