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(Alliance News) - Stock prices in London opened lower on Monday due to continuing concerns about a second wave of coronavirus infections as investors sought defensive assets in a risk-off environment.
Investor sentiment has been hit by a worrying jump in fresh cases in several US states including California, Texas and Florida, while China, Australia and Japan are also battling new outbreaks. This comes after the World Health Organization last week warned of a "new and dangerous phase" of the pandemic, with people tiring of lockdowns despite the disease's continued spread.
In addition, fears of a second wave rose in Germany as experts estimated the reproduction number of the virus had more than doubled in two days to 2.88.
The FTSE 100 index was down 62.18 points, or 1.0%, at 6,230.42. The mid-cap FTSE 250 index was down 182.05 points, or 1.0%, at 17,505.21. The AIM All-Share index was up 1.10 points, or 0.1%, at 891.49.
The Cboe UK 100 index was down 0.9% at 10,544.43. The Cboe 250 was down 0.5% at 15,048.10, and the Cboe Small Companies was up 0.1% at 9,895.59.
In mainland Europe, the CAC 40 in Paris was down 1.3%, while the DAX 30 in Frankfurt was down 1.0%.
On the London Stock Exchange, gold miners opened as the best blue-chip performers, with Fresnillo and Polymetal International up 2.2% and 1.7% respectively, tracking spot gold prices higher.
The precious metal was priced at USD1,752.06 an ounce Monday morning, up from USD1,742.20 late Friday.
"Gold pushed higher as the yellow metal continues to take centre stage in a Covid-19 environment. I think everyone is finally resigning themselves that regardless of a possible pick-up in inflation or other negative consequences, there will be continued stimulus throughout the world for a long time to come. We expect this will likely keep gold prices supported in the long term," commented AxiCorp's Stephen Innes.
At the other end of the large-cap index, Glencore was the worst performer, down 4.5%. Late on Friday, the miner and commodities trader said it was informed by the Office of the Attorney General of Switzerland it has opened a criminal investigation into Glencore International AG.
The miner said the Attorney General of Switzerland opened the investigation for failure to have the organizational measures in place to prevent alleged corruption in the Democratic Republic of Congo currently under investigation by the OAG,
Baar, Switzerland-based Glencore said it will cooperate with the investigation by the OAG.
In addition, airlines were lower amid fears over a second wave of virus infection, with British Airways parent International Airlines Group down 2.2% and easyJet down 0.9%.
Share Centre analyst Joe Healey said: "Airlines have been a sticky topic for some investors. Warren Buffett claimed he had the industry wrong and sold out of his airline stocks earlier in the year which ruffled a few feathers and sent stocks further into negative territory. Despite a considerable recovery, there's still a lot of uncertainty as to when full capacity will return.
"In my opinion, estimates are largely guesswork at this stage, we are still in the dark around consumer appetite for travel post-crisis and whether we will see resurgence quicker than we are anticipating. As a rough guideline, most airlines seem to think 2023 is how long it will take to return to 2019 demand, but it will not be surprising for this to change as the months go by."
The Japanese Nikkei 225 index closed down 0.2%. In China, the Shanghai Composite closed up 0.9%, while the Hang Seng index in Hong Kong is down 0.8%.
The pound was quoted at USD1.2375 Monday morning, firm from USD1.2368 at the London equities close on Friday.
Over the weekend, Health Secretary Matt Hancock said England is "clearly on track" to further ease the coronavirus lockdown, with the hope that pubs, restaurants and hairdressers could reopen as early as July 4.
On Sunday, Hancock promised the next steps would be set out this week, along with any alteration to the two-metre social distancing guidance. In addition, the health secretary did not rule out suggestions that Chancellor of the Exchequer Rishi Sunak could slash VAT to encourage spending in a bid to aid the economic recovery.
The euro was quoted at USD1.1200, unchanged from USD1.1204. Against the yen, the dollar was quoted at JPY106.91 in London, also unchanged from JPY106.92 late Friday.
Brent oil was quoted at USD42.06 a barrel, up from USD41.20 at the close Friday.
The economic events calendar on Monday has eurozone consumer confidence data at 1500 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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