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London stocks had pared losses by midday on Thursday but remained just a touch lower amid growing concerns about a rise in new coronavirus infections in the US.
The FTSE 100 was down 0.1% at 6,117.61.
Joshua Mahony, senior market analyst at IG, said: “Early losses in Europe have been stemmed somewhat by the ECB announcement that they will provide euro liquidity to fellow central banks in a bid to address Covid-related liquidity needs going forward.
“On the FTSE, we have seen a major focus on the international outlook, with ongoing improvements in the Covid trajectory and impending easing of lockdown measures doing little to bolster FTSE 100 stocks. In particular, domestic travel groups such as Trainline, Go-Ahead Group, and National Express are seeing sharp downside as doubt creeps in despite the proposed reopening of the UK.”
Mahony said US-centric fears of a second wave continue to damage market confidence, with stocks throughout Europe and Asia “being dealt collateral damage in the prospect of further economic damage if we see another bout of lockdowns take hold”.
On home shores, the latest survey from the Confederation of British Industry showed retailers reported another steep drop in sales in June and remained pessimistic about the near-term outlook with reopened shops expecting poor sales.
Sales fell sharply in the year to June as the CBI’s survey recorded a balance of -37% though the decline was slower than the -50% a month earlier because of stronger growth for grocers. The balance is the difference between respondents reporting an increase and a decrease.
Many retailers have reopened after the government eased restrictions on non-essential trading from 15 June but sales expectations are low for most sub-sectors, the CBI found. Sales are poor for the time of year and are expected to remain so, the survey found. The pace of decline is expected to increase in July with a balance of -48%.
Lack of demand was the biggest concern for retailers reopening at 62% followed by employee absences because of school closures at 61%. The survey reflects wider concerns that the economy will recover slowly from the Covid-19 lockdown with households worried about unemployment and further disruption from a possible second wave of infections.
In equity markets, Royal Mail shares slid after the company said it will cut 2,000 manager jobs as it desperately tries to save £130m in costs amid the coronavirus crisis and reported a 25% plunge in full year profits. It also said it was slashing £300m in spending over the next two years.
Capita was in the red after the outsourcer warned that first-half revenue will be around 10% lower than last year, partly due to the pandemic.
EasyJet flew lower after raising £419m from investors to strengthen its balance sheet against the potential costs of further disruption from Covid-19. The budget airline issued 59.542m new shares at a price of 703p a share – a 5% discount to the closing share price on Wednesday.
Property portal Rightmove was dented by a downgrade to ‘sell’ at Berenberg, which said the current valuation does not reflect the risks.
Market Movers
FTSE 100 (UKX) 6,117.61 -0.10%
FTSE 250 (MCX) 17,013.08 -0.80%
techMARK (TASX) 3,683.64 -0.30%
FTSE 100 – Risers
Hargreaves Lansdown (HL.) 1,662.00p 2.75%
Schroders (SDR) 2,927.00p 2.27%
London Stock Exchange Group (LSE) 8,180.00p 2.07%
Standard Life Aberdeen (SLA) 259.90p 2.04%
Bunzl (BNZL) 2,098.00p 1.75%
Pennon Group (PNN) 1,149.50p 1.73%
Pearson (PSON) 566.00p 1.43%
JD Sports Fashion (JD.) 619.80p 1.27%
Severn Trent (SVT) 2,521.00p 1.24%
SEGRO (SGRO) 892.60p 1.20%
FTSE 100 – Fallers
Compass Group (CPG) 1,067.00p -4.13%
Rightmove (RMV) 532.60p -3.72%
United Utilities Group (UU.) 924.80p -3.18%
Rolls-Royce Holdings (RR.) 290.70p -3.16%
ITV (ITV) 71.90p -3.10%
Smith (DS) (SMDS) 315.80p -2.56%
Lloyds Banking Group (LLOY) 30.83p -2.47%
Fresnillo (FRES) 817.40p -2.41%
Experian (EXPN) 2,739.00p -2.39%
InterContinental Hotels Group (IHG) 3,561.00p -2.36%
FTSE 250 – Risers
Petropavlovsk (POG) 32.25p 7.50%
Avon Rubber (AVON) 3,125.00p 3.82%
Future (FUTR) 1,246.00p 3.15%
Network International Holdings (NETW) 447.00p 3.09%
AO World (AO.) 144.80p 2.99%
Pets at Home Group (PETS) 238.40p 2.67%
Crest Nicholson Holdings (CRST) 210.60p 2.63%
Plus500 Ltd (DI) (PLUS) 1,301.50p 2.36%
Jupiter Fund Management (JUP) 267.60p 2.14%
AJ Bell (AJB) 383.00p 2.00%
FTSE 250 – Fallers
Royal Mail (RMG) 164.15p -8.73%
Capita (CPI) 43.00p -7.63%
easyJet (EZJ) 689.80p -6.78%
Mitchells & Butlers (MAB) 191.20p -6.27%
Provident Financial (PFG) 168.90p -5.96%
Hochschild Mining (HOC) 191.00p -5.91%
National Express Group (NEX) 210.00p -4.98%
Trainline (TRN) 474.40p -4.93%
FirstGroup (FGP) 49.04p -4.78%
Go-Ahead Group (GOG) 863.50p -4.74%
