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(Alliance News) -Â The FTSE 100 just about managed to close higher on Monday, even with blue-chip airlines weighing, as the index caught up from Friday's holiday and was aided by a slide in sterling.
Stocks elsewhere in Europe ended lower on Monday, however, as sentiment was damped by fears of a second wave of Covid-19 infections.
The FTSE 100 index closed up 3.75 points, or 0.1%, at 5,939.73. The FTSE 250 ended up 23.55 points, or 0.1%, at 16,271.49, and the AIM All-Share closed up 11.51 points, or 1.4%, at 826.62.
The Cboe UK 100 ended down 0.2% at 10,026.62, the Cboe UK 250 closed up 0.1% at 13,895.31, and the Cboe Small Companies ended flat at 8,987.23.
In European equities on Monday, the CAC 40 in Paris ended down 1.3%, while the DAX 30 in Frankfurt ended down 0.7%. On Friday, when markets in the UK were closed, the CAC 40 and DAX 30 closed 1.1% and 1.4% higher respectively.
"The lockdown-easing optimism disappeared on Monday, as investors processed the potential dangers of lifting measures too early," said Connor Campbell, financial analyst at Spreadex. "With the threat of a second wave of Covid-19 in re-opening nations like South Korea, Germany and, perhaps most importantly, China, whatever positivity was found at the start of the day was long gone by Monday afternoon."
The FTSE 100 was "something of an outlier" on Monday, Campbell added, likely benefiting from "playing catch-up after last Friday's VE Day celebrations, alongside the losses incurred by sterling".
The pound was quoted at USD1.2328 at the London equities close Monday, compared to USD1.2308 at the close on Thursday. Sterling had traded above the USD1.24 mark Monday morning.
People in England should wear face coverings in some settings, the UK government has said as it published its "road map" which could include people being able to link up with one other household in a "bubble".
The new document, published just before UK Prime Minister Boris Johnson is due to deliver a Commons statement, said one household may in future be allowed to join up with one other as a way of easing the long-term restrictions on people's lives.
The new plan for England sets out what the government sees as being possible now and what may be possible in the future.
It says that international travellers will be asked to quarantine for 14 days when they enter the country, either in accommodation of their choice or provided by the government if there are no other options. Guidance released on Monday said all international arrivals not on a "short list" of exemptions will be required to self-isolate for 14 days in their accommodation.
In a broadcast from Downing Street on Sunday evening, the prime minister said a phased reopening of schools and non-essential shops in England could potentially begin from June 1 if transmission can be reduced.
He relaxed his "stay home" slogan to instead tell people to "stay alert", but had not consulted the leaders of Scotland, Wales and Northern Ireland – and they refused to adopt the new message.
In London, airlines ended lower on the plans in introduce 14-day quarantines for UK arrivals. easyJet closed down 5.9%, International Consolidated Airlines down 2.9% and Ryanair down 4.2%.
The government's plans came as Heathrow Airport Holdings reported a slump in traffic figures for April, demonstrating just how badly the travel restrictions to fight the Covid-19 pandemic has hurt the industry.
Heathrow Airport, usually one of Europe's busiest, reported a 97% fall in April traffic to just 200,000 passengers, the sort of numbers it would normally see in just one day. During the month, 1,788 cargo only flights were operated, delivering crucial supplies of personal protective equipment, Heathrow noted.
"The airport supports government's aim of avoiding a second wave of infection, even though the 14-day quarantine plan will effectively close borders temporarily. It is likely that few passenger flights will operate and even less people will travel until the quarantine is lifted," Heathrow said.
However, shares in Halfords - which sells car accessories and bikes - surged 24%. The government has urged those who are not able to work from home to avoid public transport when travelling in – instead walking or cycling wherever possible.
"It is worth remembering that Halfords issued a positive update last week, as the group said that it expects full year pre-tax profit to be at the upper end of its forecast, GBP50-GBP55 million. The firm was already in a relatively strong position before the update from the British Prime Minister, and now it appears it will be in an even stronger position," said David Madden at CMC Markets.
Outside the UK, swathes of Europe began the long process of reopening from coronavirus lockdowns on Monday, but the first new infections in weeks at China's ground zero offered a sobering reminder of the dangers of a second wave of cases.
As France and Spain basked in a relaxation of restrictions and Britain plotted a path to normality, the Chinese city of Wuhan where the pandemic was born reported a second day of new cases after a month without a sign of the virus.
And neighbouring South Korea announced its highest number of infections for more than a month driven by a cluster in a Seoul nightlife district.
In Germany there was uncertainty too, with at least one district forced to reimpose restrictions after an outbreak at a meat processing plant. And even as it loosened its lockdown restrictions, the latest German data also indicated the infection rate was rising again.
The euro stood at USD1.0812 at the European equities close Monday, against USD1.0790 at the same time on Thursday. Against the yen, the dollar was trading at JPY107.66 compared to JPY106.48 late Thursday.
Stocks in New York were mostly lower at the London equities close, with the Dow Jones down 0.7%, the S&P 500 index down 0.5%, and the Nasdaq Composite down up 0.2%.
Brent oil was quoted at USD29.78 a barrel at the London equities close Monday, down from USD30.83 late Thursday.
Gold was quoted at USD1,698.03 an ounce at the London equities close Monday, soft against USD1,700.80 at the close on Thursday.
Back in London, cruise operator Carnival ended 2.2% higher after HSBC raised the stock to Buy from Hold.
FTSE 250-listed Hammerson closed down 2.5% after being cut to Underweight from Equal Weight by Morgan Stanley.
Diploma ended up 4.0% as it said it delivered a robust first-half performance, but outlook for the second half remains uncertain as the global response to Covid-19 pandemic will hurt the company's operations in many of its major markets.
For the half-year ended March 31, the seal and cables maker's revenue rose 9% to GBP283.6 million from GBP260.4 million last year, and pretax profit increased 4% to GBP41.6 million from GBP40.1 million.
The FTSE 250-listed company recorded a 16% drop in revenue for the month of April due to Covid-19, but it continues to continues to generate good operating profit and cash flow.
The company also has taken actions to mitigate the virus impact on the business including freezing all capital expenditure and discretionary spend and managing working capital. Its board also has decided to take a 20% pay and fee cut for the duration of the crisis.
In Tuesday's UK corporate calendar, there are full-year results from telecommunications firm Vodafone and a trading statement from grocer Wm Morrison Supermarkets.
The economic calendar has Chinese inflation at 0230 BST and US inflation at 1330 BST.
By Lucy Heming;Â lucyheming@alliancenews.com
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