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(Alliance News) -Â Despite posting modest gains in the morning, London stocks had slipped into the red by midday on Friday as worries over a second wave of Covid-19 infections continued to hurt the spirit of investors.
The FTSE 100 index was down 35.30 points, or 0.6%, at 5,787.48 Friday midday, with London's leading index down 3.7% since the week began.
The mid-cap FTSE 250 index was down 43.02 points, or 0.3%, at 16,759.67 on Friday. Small caps were faring better. The AIM All-Share index was up 0.7% at 947.66.
The Cboe UK 100 index was down 0.7% at 575.64. The Cboe 250 was down 0.5% at 14,188.16, and the Cboe Small Companies down 0.3% at 8,992.89.
In mainland Europe, the CAC 40 in Paris was down 0.4%, while the DAX 30 in Frankfurt was down 0.2% Friday afternoon.
"Rising virus infections are weighing on market sentiment, principally after France and the UK registered new record numbers. Investor hopes are now that new governmental stimulus packages can offset the negative economic prospective brought by the second wave," said Pierre Veyret, technical analyst at ActivTrades.
France reported a record number of new daily cases of coronavirus on Thursday, saying 16,096 fresh infections had been logged in the past 24 hours. The figures from Public Health France also showed that 52 people had died from the disease in hospital over the past day.
In the UK, as of 9am on Thursday, there had been a further 6,634 lab-confirmed cases of Covid-19, taking the overall number of cases confirmed to 416,363.
Amid the resurgence of the virus in the UK, Chancellor Rishi Sunak on Thursday unveiled a new Job Support Scheme.
The new plan - starting in November and running for six months - will protect "viable" jobs only, Sunak said, with eligible employees needing to work a minimum of a third of their normal hours. For remaining hours not worked, the government and the employer will pay a third each of the outstanding wage.
The latest UK support measures came a day before the latest government public spending figures, which showed borrowing in August was the third highest of any month on record due to the Covid-19 crisis.
Public sector net borrowing, excluding public sector banks, is estimated to have been GBP35.9 billion in August, up by GBP30.5 billion on a year ago and the third highest borrowing in any month since records began in 1993.
ActivTradess' Veyret added: "This situation [of needing stimulus] is especially true in the US where many investors, desperately waiting for further support from the government, are increasingly concerned a phase 4 stimulus may not happen before 2021, which would be likely to put strong pressure on stock markets and the rest of the economy for the end of the year."
Wall Street is on course for a lower open on Friday, with the Dow Jones and S&P 500 both called down 0.2% and the Nasdaq Composite set to slip 0.3%.
The dollar was paring losses at midday.
The pound was quoted at USD1.2710 Friday midday, soft against USD1.2713 at the London equities close on Thursday. The euro traded at USD1.1643, marginally lower than USD1.1645 late Thursday.
The safe haven yen remained stronger, however. Against the yen, the dollar was quoted at JPY105.45, down versus JPY105.50.
Brent oil was trading at USD41.99 a barrel, rising from USD41.52 late Thursday. BP was up 1.1% at midday, though Royal Dutch Shell was just 0.2% and 0.3% higher for 'A' and 'B' shares respectively.
Gold was quoted at USD1,860.69 an ounce on Friday, only slightly higher than USD1,859.50 on Thursday, as the dollar rose off its lows.
In London, travel firms faced another session of selling as virus cases rose, triggering fears of further restrictions. British Airways-parent International Consolidated Airlines was down 5.8% while Holiday Inn-owner Intercontinental Hotels fell 3.2% and budget airline easyJet was down 2.9%.
Wizz Air was down 2.5%. On Friday, the central and eastern Europe-focused airline said it will operate just 50% of last year's capacity in October in light of ongoing government-led travel restrictions as a result of the Covid-19 pandemic and a subsequent drop in demand for travel during the winter period.
The FTSE 250-listed European airline also warned that it will not to operate at a higher level of capacity during winter months than its projection for October should the virus restrictions remain at current levels.
On AIM, Boohoo shares bounced 10%. The online fashion retailer laid out a series of changes it plans to make after an independent review found "significant and clearly unacceptable issues" in its supply chain.
The review was launched by Boohoo in July following claims it sold clothes made in factories where staff were paid less than the minimum wage.
The review identified "many failings" in the Leicester supply chain and recommended improvements to Boohoo's corporate governance, compliance and monitoring processes. Alison Levitt, who was appointed to run the review, was satisfied that Boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain, however.
Following the review and its recommendations, Boohoo said it will enhance corporate governance and oversight, and will appoint two new non-executive directors to strengthen the board. In addition, Manchester-based Boohoo plans to consolidate its approved supplier list, invite new suppliers and extend independent audit of its supply chain.
David Madden at CMC Markets commented: "Dealers reacted well to the news as it shows that Boohoo is going to be running a tighter operation from now on, and therefore the chances of similar allegations being made again are low."
The economic events calendar on Friday still has US durable goods orders at 1330 BST.
By Lucy Heming;Â lucyheming@alliancenews.com
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