(Alliance News) - It was a mixed close for stocks in London to start the new week, with the FTSE 100 underperforming European peers as oil and mining stocks struggled.
The FTSE 100 index lost 15.27 points, or 0.3%, to close at 6,001.38 points Monday. The mid-cap FTSE 250 index finished up 93.29 points, or 0.5%, at 18,167.71. The AIM All-Share index closed up 0.3% at 993.30.
The Cboe UK 100 index ended down 0.3% at 596.94 points. The Cboe 250 ended up 0.4% at 15,411.77, and the Cboe Small Companies closed up 0.5% at 9,559.67.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt both advanced 0.7%.
Boris Johnson announced the closure of pubs and bars across Merseyside as he battled to gain control over the coronavirus outbreak.
The prime minister launched a three-tier system of local alert levels for England, with the Liverpool city region placed in the most serious "very high" risk category from Wednesday.
Johnson told MPs that the coming weeks and months would "test the mettle" of the country as it faced a second wave of Covid-19 cases.
"US stocks are in strong form but the prospect of even tighter restrictions in Europe has meant that stocks on this side of the Atlantic are struggling to make much headway," IG Chief Market Analyst Chris Beauchamp said.
He continued: "Dollar weakness has also meant that the FX market has proved to be a headwind for Europe and UK stocks, and as the UK seems to be on an inevitable path to new local, and perhaps national, lockdowns, the FTSE 100 has fallen behind."
The pound was quoted at USD1.3070 at the close on Monday, firm from USD1.3010 at the London equities close Friday, after the Bank of England wrote to UK banks to ask if they are ready for negative interest rates.
In September, at the BoE's last Monetary Policy Committee meeting, the UK central bank said it and the Prudential Regulation Authority would "begin structured engagement on the operational considerations" of negative interest rates.
UK interest rates currently sit at a record low of 0.1%.
The euro was priced at USD1.1807, lower from USD1.1821. Against the yen, the dollar was quoted at JPY105.28, down from JPY105.68.
Beauchamp said: "More lockdowns around the globe could also hit economic growth, and oil prices have been weakening today as a result of this. The bounce from the lows of early October seems to have run its course, as the impact of production cuts fades and the focus shifts to the macro picture once more. Despite improvement in Asia, the great Western consumers of oil are struggling to get the virus under control, raising fears that demand may once again fall off a cliff in a similar manner to February and March."
In commodities, Brent oil was trading at USD41.64 a barrel at the close Monday, down from USD43.32 late Friday in London. Gold was USD1,921.20 an ounce, lower from USD1,924.20.
As a result, London's oil majors struggled, with Royal Dutch Shell 'A' shares giving back 2.6% and the 'B' shares lost 2.3% and BP lost 2.0%.
Miners were also struggling on the potential for further lockdowns across Europe as virus cases rise. Rio Tinto lost 1.5%, BHP 1.2%, Anglo American 1.1% and Glencore 1.0%.
In the FTSE 100, Aveva gave back 2.6%. The industrial software firm said it has performed "creditably" in the first half against a challenging backdrop, but revenue is expected to fall.
For the half-year ended September 30, Aveva expects to report revenue of around GBP333 million, down from GBP391.9 million in the first half of financial 2020.
Separately, the Cambridge, England-based company said its proposed acquisition of OSIsoft remains on track and that it is making progress on debt financing relating to the buyout.
GVC Holdings lost 2.0%, as the gambling firm said it was awarded four sports-betting licences in Germany by the country's regulator. Some of the terms include a wagering limit of EUR1,000 per month that can be increased to EUR10,000. There also will be deposit limits until customer verification processes are complete and a maximum annual bonus per customer of EUR100.
GVC estimates that earnings before interest, tax, depreciation and amortisation will be reduced by up to GBP40 million on an annual basis. The company said this hit to earnings from the German licenses will be incremental to the GBP70 million negative impact of its new Tolerance Policy. GVC reported underlying Ebitda of GBP761.1 million for 2019.
International Consolidated Airlines Group lost 1.6%. The airline operator said Aer Lingus Chair & Chief Executive Sean Doyle will become the new CEO of British Airways, effective immediately, as Covid-19 causes job cuts at the airline.
The Anglo-Spanish airline holding company said Doyle will be replacing Alex Cruz, who will step down as CEO & chair of British Airways but will remain as non-executive chair of BA for the time being.
At Aer Lingus, Chief Corporate Affairs Officer Donal Moriarty will become interim CEO. A permanent appointment will be announced in due course, the company said.
British Airways has caught flak recently for its handling of up to 12,000 job cuts as Covid-19 continues to ground the air travel industry.
In the midcaps, Carnival lost 4.9% on further cruise cancellations. It is cancelling all remaining cruises in November for the six ships operating from PortMiami and Port Canaveral.
The cruise operator explained that after the US Centers for Disease Control opted to extend its no-sail order for cruise operations until the end of October, it has cancelled all but its PortMiami and Port Canaveral cruises for the rest of 2020 but "has now determined that November 2020 operations will not be feasible".
Carnival is still working on protocols and procedures that would allow its to resume operations and has designated Miami and Port Canaveral as its first two homeports for embarkations. At the moment, cruises scheduled for December from those two homeports are still in place while the company considers its options.
Stocks in New York were in the green at the London equities close, with the Dow Jones Industrial Average up 1.0% and the S&P 500 index up 1.5%, while the Nasdaq Composite was 2.2% higher.
Optimism that US lawmakers will eventually pass a new stimulus package lifted sentiment, with the White House ramping up its offer and President Donald Trump insisting Republicans want to get a deal done.
Trump will launch a campaign marathon on Monday, holding rallies in three key swing states over the next few days as his White House race against surging Democrat rival Joe Biden enters its critical final weeks.
In the international economics calendar Tuesday, there is China trade balance date overnight, followed by the UK ILO unemployment rate and a German consumer price index print at 0700 BST. In the afternoon, there is a US consumer price index reading at 1330 BST.
The UK corporate calendar, there is half-year results from retailer French Connection and property search portal OnTheMarket.
By Paul McGowan; paulmcgowan@alliancenews.com
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