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(Alliance News) - Stock prices in London opened lower after US President Donald Trump tested positive for Covid-19 with just weeks to go until November's presidential election.
Trump, 74, first announced on Twitter that he and First Lady Melania Trump, 50, had tested positive for the virus.
The extraordinary setback for Trump had immediate political consequences just 31 days before election day, forcing him to cancel campaign trips and adding new volatility to a contest already steeped in tension, AFP reports.
Trump's challenger, Democrat Joe Biden, is well ahead in the polls and has made criticism of the Republican's handling of the coronavirus – and frequent downplaying of the pandemic's seriousness – a key issue.
The large-cap FTSE 100 index was down 49.12 points, or 0.8%, at 5,830.33. The mid-cap FTSE 250 index was down 140.40 points, or 0.8%, at 17,243.06. The AIM All-Share index was down 0.3% at 961.29.
The Cboe UK 100 index was down 0.7% at 580.92. The Cboe 250 was down 0.6% at 14,629.42, but the Cboe Small Companies was up 0.1% at 9,248.05.
In mainland Europe, the CAC 40 in Paris was down 1.0% while the DAX 30 in Frankfurt was 0.8% lower.
City Index analyst Fiona Cincotta said: "The degree of economic and political fallout will depend on the severity of the ill. There is, of course, a protocol for everything. However, the overriding fear for investors is the impact that Trump testing positive for Covid could have on the US Presidential Elections.
"This election already had a cloud of uncertainty hanging over it as Trump has refused to say whether he will accept the final vote and has also said that the final result may not be known for months. The markets are already fretting about an uncertain election and this just adds another layer of uncertainty, favouring the risk off-trade."
On the London Stock Exchange, International Consolidated Airlines was the best blue-chip performer, up 0.9%, after the British Airways parent said it has received 100% acceptances for the new shares to be issued under the company's EUR2.74 billion equity capital raise.
The Anglo-Spanish airline earlier in September had said it would issue 2.98 billion shares at EUR0.92 each to strengthen its balance sheet and reduce leverage. Qatar Airways, IAG's largest shareholder with a 25% stake, had irrevocably undertaken to subscribe for its pro-rata entitlement under the capital increase.
IAG said it has received acceptances in respect of all 2.98 billion shares to be issued under the fundraise. During the pre-emptive subscription period, which ended on Saturday last week, a total of 2.76 billion shares were subscribed, representing 93% of the new shares, leaving 215.9 million excess shares.
At the other end of the large caps, Rolls-Royce was the worst performers, down 5.5%, following its equity raise announcement on Thursday. Early Friday, Mainfirst cut the jet engine maker to Hold from Buy.
Rolls-Royce on Thursday had launched an effort to boost its finances by GBP5.0 billion in equity and debt. The stock closed down 10% on Thursday.
In the FTSE 250, IMI was the best performer, up 2.5% after Morgan Stanley raised the engineering firm to Overweight from Equal Weight.
At the other end of the midcaps, Centamin was by far the worst performer, down 20%. The gold miner it will defer open pit mining operations in the Stage 4 West wall of the open pit at its Sukari gold mine in Egypt after detecting movement in a localised area of waste material.
For the three month ended September 30, preliminary gold production was around 120,000 ounces, taking nine-month production to about 375,000 ounces. Centamin's preliminary estimate is that fourth quarter production will be reduced to around 70,000 ounces.
Gold was quoted at USD1,914.01 an ounce Friday morning, up from USD1,910.51 late Thursday as demand for the safe-haven metal increased after Trump contracted the novel coronavirus.
"News that President Trump has tested positive for Covid-19 has put the safe-haven trade into overdrive. Investors are dumping riskier assets and currencies such as stocks, EUR and AUD in favour of safe havens such as the Japanese yen, US dollar and gold," Cincotta noted.
The euro stood at USD1.1730, soft from USD1.1745 at the European equities close Thursday. Against the yen, the dollar was trading at JPY105.20, down from JPY105.58.
Brent oil was trading at USD39.82 a barrel on Friday morning, down from USD40.13 at the London equities close Thursday.
"Oil remains the weakest link to the Covid headlines as it reinforces the view that anyone, even the commander and chief, is susceptible to the virus," AxiCorp's Stephen Innes commented.
The pound erased early morning losses, quoted at USD1.2935 Friday morning, up from USD1.2889 at the London equities close Thursday, after a spokesman said UK Prime Minister Boris Johnson will hold emergency talks with European Commission President Ursula von der Leyen over the weekend.
On Thursday, von der Leyen said a "letter of formal notification" would be sent to the UK after ministers rejected a demand to withdraw the provisions from the controversial UK Internal Market Bill by Wednesday.
In Asia, the Japanese Nikkei 225 index ended down 0.7% following an outage on Thursday which halted trading. Financial markets in Shanghai and Hong Kong remain closed for holidays.
In Friday's economic calendar there is eurozone inflation at 1000 BST followed by the US jobs report for September - which includes nonfarm payrolls and the unemployment rate - at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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