London midday: Stocks slide on further restrictions, fading US stimulus hopes

Thu 15 Oct 2020

LONDON (SHARECAST) - (Sharecast News) - London stocks were firmly in the red by midday on Thursday amid tightening coronavirus restrictions across Europe and as hopes of further US stimulus faded.
The FTSE 100 was down 2.2% at 5,804.23, extending earlier losses in line with European peers as investors mulled the imposition of further restrictions in France, Germany, the Netherlands, Ireland, Spain and the UK.

Press reports suggested Londoners will be subject to Tier-2 Covid-19 restrictions from Saturday, meaning that the mixing of households indoors and at pubs and restaurants will not be allowed.

Under the change form Tier-1 to Tier-2 restrictions, or from 'medium' to 'high' Covid-19 risk, the 10pm curfew for pubs and restaurants will also continue to apply.

Market participants were also growing increasingly doubtful about the prospect further US stimulus after Treasury Secretary Steven Mnuchin said a pre-election package was unlikely.

CMC Markets analyst David Madden said: "Renewed health concerns and tighter restrictions around Europe are hammering stocks this morning. In recent weeks, the chatter surrounding a possible stimulus package in the US grabbed traders' attention, but all the while the health situation was deteriorating.

"We now find ourselves in a scenario whereby the pandemic is back in centre stage, while the prospects of a US relief package this side of the Presidential election seem very low. Dealers are dumping stocks for fear that economic activity will drop off because of the tighter restrictions in various parts of Europe."

Brexit was also very much in focus, with the two-day European Union summit due to kick off later.

Neil Wilson, chief market analyst at, said: "So far there are no signs of a compromise leading to a breakthrough, though fears the UK would walk away from the talks today seem to have eased with negotiators adamant they can get a declaration in the next couple of weeks.

"I think we could easily see another month of toing and froing over the final sticking points around the level playing field, governance and fisheries. Bottom line, both sides want a deal and as far as sterling is concerned, it's still a currency people want to own."

Sterling was trading down 0.6% against the dollar at 1.2932.

In equity markets, stocks related to the travel, hospitality and leisure sectors all took a hit as investors fretted about the impact of tightening Covid restrictions. Premier Inn owner Whitbread, InterContinental Hotels, cruise operator Carnival and WH Smith were all under the cosh, along with Cineworld and Upper Crust owner SSP.

Outside the FTSE 350, pub and hotel chain Marston's was trading lower after saying it will cut more than 2,000 jobs due to the impact of the pandemic and ensuing restrictions.

Airlines were under the cosh after Ryanair said it was cutting planned winter capacity by a third due to the latest round of travel restrictions across Europe.

Domino's Pizza was weaker even as it said it expects full-year profit to be in line with market consensus despite the uncertain backdrop and reported a rise in third-quarter sales and an "exceptional" digital performance.

On the upside, online electricals retailer AO World rallied after saying it expects half-year revenue to rise by more than half driven by strong performances in the UK and Germany.

Market Movers

FTSE 100 (UKX) 5,804.23 -2.20%
FTSE 250 (MCX) 17,621.27 -1.83%
techMARK (TASX) 3,762.11 -1.83%

FTSE 100 - Risers

Just Eat Takeaway.Com N.V. (CDI) (JET) 9,502.00p 1.04%
Aveva Group (AVV) 4,565.00p -0.09%
Hikma Pharmaceuticals (HIK) 2,673.00p -0.26%
Admiral Group (ADM) 2,711.00p -0.44%
Standard Chartered (STAN) 353.10p -0.48%
Flutter Entertainment (FLTR) 12,905.00p -0.50%
B&M European Value Retail S.A. (DI) (BME) 506.80p -0.55%
Ocado Group (OCDO) 2,405.00p -0.62%
Pennon Group (PNN) 1,012.00p -0.64%
Auto Trader Group (AUTO) 572.60p -0.69%

FTSE 100 - Fallers

Whitbread (WTB) 2,114.00p -5.84%
Burberry Group (BRBY) 1,471.50p -5.34%
JD Sports Fashion (JD.) 762.00p -4.82%
International Consolidated Airlines Group SA (CDI) (IAG) 93.74p -4.60%
Glencore (GLEN) 161.32p -4.42%
Compass Group (CPG) 1,136.50p -4.29%
Mondi (MNDI) 1,599.50p -4.08%
Royal Dutch Shell 'A' (RDSA) 950.20p -4.01%
Intermediate Capital Group (ICP) 1,306.00p -3.97%
Royal Dutch Shell 'B' (RDSB) 923.40p -3.88%

FTSE 250 - Risers

AO World (AO.) 274.50p 18.57%
TI Fluid Systems (TIFS) 185.84p 3.94%
Hipgnosis Songs Fund Limited C Shs NPV (SONC) 102.00p 1.49%
Just Eat Takeaway.Com N.V. (CDI) (JET) 9,502.00p 1.04%
Foresight Solar Fund Limited (FSFL) 104.00p 0.97%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,736.00p 0.93%
TBC Bank Group (TBCG) 983.00p 0.82%
Aggreko (AGK) 449.40p 0.76%
Tritax Big Box Reit (BBOX) 167.60p 0.54%
Direct Line Insurance Group (DLG) 279.20p 0.29%

FTSE 250 - Fallers

Domino's Pizza Group (DOM) 327.60p -11.94%
Greencore Group (GNC) 97.45p -6.66%
FirstGroup (FGP) 45.40p -6.16%
Perpetual Income & Growth Inv Trust (PLI) 222.50p -6.12%
Cineworld Group (CINE) 25.40p -5.93%
Provident Financial (PFG) 197.70p -5.50%
WH Smith (SMWH) 937.00p -5.35%
Close Brothers Group (CBG) 1,022.00p -5.19%
Frasers Group (FRAS) 344.00p -5.02%
SSP Group (SSPG) 177.70p -5.02%
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