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(Alliance News) - Stocks in London were mixed at midday on Monday as investors continued to weigh up a spike in coronavirus cases against the prospect of a return to some kind of normality.
Global infections from the novel coronavirus passed ten million on Sunday as the death toll climbed over 500,000, an AFP tally showed, as California ordered bars in LA and some other parts to close in an effort to quell a surge in cases.
One million new infections were recorded in just six days, according to the count based on official sources, even as countries were loosening punishing lockdowns that have devastated their economies and thrown millions out of work.
The FTSE 100 index was up 12.69 points, or 0.1%, at 6,171.99. The mid-cap FTSE 250 index was up 62.02 points, or 0.4%, at 17,051.18. The AIM All-Share index was flat at 881.59.
The Cboe UK 100 index was down 0.1% at 10,434.43. The Cboe 250 was down 0.4% at 14,540.10, and the Cboe Small Companies was down 0.2% at 9,293.59.
In Paris the CAC 40 was up 0.1%, while the DAX 30 in Frankfurt was 0.4% higher.
AJ Bell's Russ Mould said: "Investors' fears over a second wave of Covid-19 have proved correct after China reinstated a lockdown for 400,000 people after a spike in the virus. The US also continues to struggle to contain infections, seeing a sharp uptick in the daily number of cases in Texas. In the UK, there is chatter that Leicester could face a localised lockdown after a rise in coronavirus cases," says Russ Mould, investment director at AJ Bell.
"All these events have reminded the world that the pandemic is still raging and the road back to normality is going to be a long and treacherous one. However, these fears have been clouding the market for some time and the market is forward-looking, hence why investors seem to have shrugged off the latest events which were fully expected."
On the London Stock Exchange, BP was the best blue-chip performer, up 2.5% after the oil major said it has agreed to sell its petrochemicals business to privately owned UK chemicals company Ineos for USD5 billion as part of a plan to "reinvent BP".
Under the agreement, Ineos will pay BP a deposit of USD400 million and will pay a further USD3.6 billion on completion. An additional USD1 billion will be deferred and paid in three separate instalments of USD100 million in March, April and May 2021 with the remaining USD700 million payable by the end of June 2021.
The sale, which is slated to complete by the end of 2020, is expected to strengthen BP's balance sheet and delivers its USD15 billion divestment target a year early than originally scheduled, it noted. Proceeds from the sale will be used by BP for general corporate purposes.
At the other end of the large-cap index, Unilever was down 1.7% after UBS cut the consumer goods firm to Sell from Neutral.
In the FTSE 250, Energean was the best performer, up 12% after the oil and gas explorer said it has entered into amended terms for its Edison E&P acquisition and will pay out USD466 million less than originally planned. Edison is part of France's EDF Group.
The Mediterranean-focused gas producer said it has inked further amended terms for the deal, originally announced in July 2019, that now exclude Edison E&P's Norwegian subsidiary. This, along with the previous exclusion of Edison E&P's Algerian asset, means that the gross price tag has fallen to USD284 million from USD750 million.
The USD466 million reduction in sale price includes a USD155 million from the Algerian exclusion and USD200 million from the Norwegian exclusion. The remaining USD111 million is due to "additional reductions relating to the macro environment".
The pound was quoted at USD1.2329 at midday, flat from USD1.2326 at the London equities close Friday.
The EU and UK launch an intense five weeks of negotiations on a deal to define their post-Brexit relations on Monday, with London keen to wrap things up quickly.
The new round of talks in Brussels will be the first to be held face-to-face since the coronavirus shutdown combined with the two sides' entrenched positions to stall progress.
The meetings will alternate weekly between Brussels and London throughout July and at the end of August, as the teams learned on Sunday, the British negotiator David Frost will be promoted to become Prime Minister Boris Johnson's national security adviser.
Analysts at OFX said: "The pound has started the week on the back foot with GBP/USD falling back towards 1.23 and GBP/EUR dropping under 1.10 for the first time since March. The pound is susceptible to risk-off moves and with stock markets falling at the end of last week its not surprising the pound has taken a bit of a hit. Also, slowly creeping back into the headlines is Brexit with a large gap existing between the UK and EU over the terms of its future trading arrangement.
"As long as Coronavirus continues to remain under control in the UK, then Brexit will become more of a driver for the pound as we head deeper into 2020 with only just over six months before we are set to leave the bloc with or without a trade deal done."
The euro stood at USD1.1280 at midday, up from USD1.1210 at the European equities close Friday. Against the yen, the dollar was trading at JPY107.18 in London, flat from JPY107.21 late Friday.
US stock market futures were pointed mostly higher on Monday despite a rise in coronavirus cases in the US.
The DJIA was called up 0.4%, the S&P 500 index up 0.2%, but the Nasdaq Composite was pointed down 0.3%.
Data compiled by Johns Hopkins University showed more than 2.5 million cases have been confirmed across the US. On Friday alone, there were 45,255 additional cases were reported.
Facebook shares will be in focus after the social media platform said Friday it would ban a "wider category of hateful content" in ads as the embattled social media giant moved to respond to growing protests over its handling of inflammatory posts.
Chief Executive Mark Zuckerberg said Facebook also would add tags to posts that are "newsworthy" but violate platform rules - following the lead of Twitter, which has used such labels on tweets from President Donald Trump.
The initiative comes with the leading social network facing a growing boycott by advertisers - with soft drink maker Coca-Cola Co and Anglo-Dutch giant Unilever joining Friday - as activists seek tougher action on content they deem to promote discrimination, hatred or violence.
Facebook shares were down 2.9% in pre-market trade.
Brent oil was quoted at USD40.92 a barrel at midday, up from USD40.70 at the London close on Friday. Gold was quoted at USD1,770.75 an ounce at midday, up from USD1,760.70 late Friday.
Still to come in the economic events calendar there OS Germany inflation figures at 1300 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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