Last checked at 
(Alliance News) - Stock prices in London were lower at midday in London on Monday as EU leaders were set to reconvene to try to agree terms of a vast post-coronavirus economic rescue plan, while infections spike in the US.
The FTSE 100 index was down 30.81 points, or 0.5%, at 6,259.49. The mid-cap FTSE 250 index was 26.01 points, or 0.4%, lower at 17,321.92. The AIM All-Share index was up 3.91 points, or 0.4% at 881.61.
The Cboe UK 100 index was down 0.5% at 623.54. The Cboe 250 was flat at 14,696.54, and the Cboe Small Companies index was flat at 9,152.06.
In mainland Europe, the CAC 40 in Paris was down 0.7%, while the DAX 30 in Frankfurt up 0.3% lower.
"European equity markets are mixed as EU leaders are still divided over the terms of the EUR750 billion rescue fund. Traders shrugged off the fact that things appear to be heading in the right direction as the gulf between the two sides has narrowed. The original proposal was that EUR500 billion be distributed as grants, and the remaining EUR250 billion be issued as loans," said CMC Markets analyst David Madden.
"A few northern European members, Austria, Denmark, The Netherlands and Sweden, were opposed to such a high proportion of grants being issued. The group have been called the 'frugal four', and they are keen for conditions to be attached to the grants. Talks continued into the early hours of today, and it is understood that some of the 'frugal' group are pushing for EUR390 billion in grants and EUR360 billion in loans," Madden added.
The euro was changing hands at USD1.1451 Monday midday, firm from USD1.1433 at the European equities close Friday. The single currency touched an intraday high of USD1.1469 against the buck - its highest level in four months.
EU leaders will resume their fractious summit on Monday afternoon. Europe remains the worst-hit continent, with more than 200,000 deaths, but there is a bitter dispute among EU nations on how to help its hardest hit - and most indebted - members such as Italy and Spain.
EU summit host Charles Michel on Sunday implored the bloc's bickering leaders to compromise as he battled to save the deadlocked gathering.
France and Germany are insistent on Michel brokering a compromise by cutting the grant portion of the deal to EUR400 billion - down from his initial proposal of EUR500 billion - and raising the loan part to EUR350 billion, up from EUR250 billion.
In a bid to break the deadlock, Michel came up with a new proposal on Monday morning, which a diplomat said could be a "route to a deal". "A plan with EUR390 billion in grants but smaller rebates for the Frugals," a European official explained.
Analysts at BK Asset Management said: "Although the full stimulus package falls short of initial targets it nevertheless marks the first time that the EU has decided to issue significant amounts of federated debt and also agree on mutualization of stimulus measures that could provide much-needed relief to the region's weakest members.
"The news should continue to boost the euro especially in light of the fact that Europe appears to have much better control over Covid-19 right now and can expand its economic activities while the US faces massive pandemic outbreaks in the South and Southwest of the country. If the EU authorities actually ink a deal the single currency could move through the 1.1500 barrier on hopes an economic rebound."
On the London Stock Exchange, AstraZeneca was the best blue-chip performer, up 2.5% as investors look ahead to results of Anglo-Swedish drugmaker's partnership with Oxford University to develop a coronavirus vaccine.
The Oxford/AstraZeneca trial - which is now in its third phase of human trials in Brazil - expected to be released on Monday, with high expectations over its efficacy.
"Investors have warmed to AstraZeneca both on hopes that it will successfully develop a treatment for Covid-19 and the fact the company is making progress with other drug developments. Early-stage trial data is set to be published today on its coronavirus vaccine so the shares could be in even more demand if the news is encouraging," said AJ Bell's Russ Mould.
UK housebuilders also were in the green following upbeat house price data from Rightmove. Berkeley Group was up 1.5%, Barratt Developments up 1.3%, Taylor Wimpey up 1.0% and Persimmon up 0.8%.
House prices in Britain hit a record high this month, with the country seeing a "mini-boom", according to listings site Rightmove. The average price of property coming to market is GBP320,265 this month, up by an average of 2.4%, or GBP7,640, compared to March, before the housing market was put on hold by Covid-19.
Rightmove noted the 3.7% annual growth is the highest since December 2016. According to listings site Rightmove, the average asking price in England during June was GBP337,884, up 1.9% from March. The June figure represented a 2.9% annual rise.
Citigroup said rising housing demand levels are set to get a boost from the UK government's stamp duty cut. "Demand strength shows no signs of abating. Mortgage availability still remains below normal levels. Land values have yet to reflect the impact of disruption as construction costs moderate but the trends are still evolving," analysts at the US bank said.
At the other end of the large-cap index, Standard Life Aberdeen was down 2.8% after Barclays downgraded the fund manager to Underweight from Equal Weight.
British American Tobacco was down 2.0% after Jefferies cut the Dunhill, Kent and Lucky Strike cigarette maker to Hold from Buy.
GlaxoSmithKline was down 1.8%. The London-based pharmaceutical firm said it will invest in German vaccine maker CureVac.
GlaxoSmithKline and CureVac announced the signing of a strategic collaboration agreement for the development of up to five mRNA-based vaccines and monoclonal antibodies targeting infectious disease pathogens. Under the terms of the deal, Glaxo will make an equity investment in CureVac of GBP130 million, representing close to a 10% stake, an upfront cash payment of GBP104 million.
The pound was quoted at USD1.2591 midday on Monday, up from USD1.2538 at the London close on Friday.
UK Foreign Secretary Dominic Raab is to set out further measures in response to China's imposition of a tough new national security law on Hong Kong amid growing tensions with Beijing.
The government looks set to follow the example of the US, Canada and Australia and suspend the UK's extradition treaty with the territory - a move that would infuriate China.
In a strong signal that he is ready to go down the same route, Raab confirmed at the weekend that he had completed a review of Britain's extradition arrangements as part of the next steps.
China was already smarting over the government's decision last week to exclude the tech giant Huawei from the UK's 5G network - reversing a decision in January allowing it a limited role. The Chinese ambassador to the UK, Liu Xiaoming, said Beijing was still evaluating its response to the Huawei ruling.
Against the yen, the dollar was trading at JPY107.25, firm from JPY107.11 Friday evening in London.
Brent oil was trading at USD42.74 a barrel Monday midday, down from USD43.08 at the London close Friday. Gold was quoted at USD1,810.11 an ounce, flat from USD1,810.20 an ounce.
US stocks look set for a muted open as rising coronavirus infection levels threaten to stall the economic recovery. The DJIA was called down 0.1%, the S&P 500 index down 0.1% but the Nasdaq Composite up 0.1%.
The US - the worst-hit country in the world - has reported more than 60,000 new daily cases for six days. With close to 3.8 million cases and more than 140,000 deaths, authorities are struggling to contain the surge and US President Donald Trump has been criticised for his response to the crisis.
The devastation has left tens of millions jobless, and the poorest have been hit hardest by the economic downturn.
Los Angeles Mayor Eric Garcetti delivered a fresh warning Sunday during an appearance on CNN saying that the city was "on the brink" of imposing new restrictions to prevent the spread of the virus.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
