(Alliance News) - Stocks in London were mixed at the close on Monday, as a rise in Covid-19 infections in China weighed on investor sentiment.
"Monday's trading has seen weakness around the globe, as stocks struggle with the rise in Covid cases in China and further hawkish comments from the Fed. The former threaten the return of strict anti-Covid measures that would cast doubt on any Chinese economic resurgence in the near-term, while the latter is a reminder that, no matter what markets think, the Fed is of the opinion that more strong medicine needs to be applied to the US economy," commented Chris Beauchamp, chief analyst at IG.
The FTSE 100 index closed down 8.67 points, or 0.1% at 7,376.85 on Monday. Meanwhile, the FTSE 250 ended up 130.30 points, or 0.7%, at 19,413.35. The AIM All-Share closed down 0.66 of a point, or 0.1%, at 837.59.
The Cboe UK 100 ended down 0.1% at 738.12, the Cboe UK 250 closed up 0.4% at 16,690.14, and the Cboe Small Companies ended flat at 12,974.44.
New Covid cases in China's capital jumped to 962 on Monday from 621 the day before, as authorities maintained a patchwork of restrictions in an effort to extinguish emerging flare-ups.
On Thursday, St Louis Fed President James Bullard said that the US federal funds rate range is not yet high enough to be "considered sufficiently restrictive".
He added in a speech that the rate would need to be raised further to hit a level that is restrictive enough.
The central bank has embarked on an aggressive campaign to ease demand and bring down surging inflation, raising the benchmark lending rate six times this year.
The pound was quoted at USD1.1794 at the London equities close on Monday, down sharply from USD1.1929 at the close on Friday.
"After a wild ride since the late summer, sterling could now begin to take less of the limelight. The chancellor has delivered the autumn statement, and we are now left to examine how quickly growth softens and how aggressively the Bank of England will tighten when it next meets on 15 December," said Chris Turner at ING.
It was also strong start to the week for the US dollar, with CMC Market's Michael Hewson saying that most of today's strength appears to be due to the risk off sentiment seen as a result of concerns over the Chinese government reimposing stringent lockdowns.
The euro stood at USD1.0236 at the European equities close on Monday, lower against USD1.0362 at the same time on Friday. Against the yen, the dollar was trading at JPY141.96 late Monday, higher compared to JPY139.85 late Friday.
In the FTSE 100, Endeavour Mining closed 2.0% higher, finishing the best performer in the blue-chip index on Monday.
The West Africa-focused gold producer said that preliminary metallurgical tests indicated high gold recovery rates above 95% at its Tanda-Iguela property in Ivory Coast.
Endeavour said the tests demonstrated the property could be a flagship asset. It is now planning 70,000 metre drilling programme for 2023 to delineate further resources and test new targets at the property.
Entain was down 2.7%, despite saying it was awarded gaming and poker licences for all it applied for, for use throughout Germany.
The sports betting and gambling firm said the news enabled it to offer gaming under its bwin, Ladbrokes and Sportingbet brands, and poker under bwin and Ladbrokes.
"It is an important and welcome step towards achieving the goal of a fully regulated online betting and gaming market in Germany. Only through such regulation and its enforcement will we avoid the reality of customers going to the black market where there are none of the safeguards that reputable operators such as Entain guarantee," said Chief Governance Officer Robert Hoskin.
Compass finished 2.2% lower after the Surrey-based contract caterer said operating profit growth will be slower in the year ahead, as it has regained pre-pandemic business levels.
Compass said pretax profit jumped to GBP1.47 billion in the financial year that ended September 30 from GBP464 million the year before.
Revenue rose 43% to GBP25.51 billion from GBP17.91 billion, topping company-compiled consensus of GBP25.1 billion.
For financial year 2023, however, which began in October, Compass expects constant-currency underlying operating profit growth of above 20%, slowing from 88% in the pandemic-recovery boosted year just completed.
In the FTSE 250, Virgin Money soared 13% as it extended its share buyback programme to repurchase up to an additional GBP50 million.
The Newcastle, England-based bank said the buyback is an extension of the GBP75 million share buyback that was first announced in June and takes total buybacks in 2022 to GBP125 million.
RHI Magnesita was down 4.4% as it warned there had been a slippage of some orders since its last trading update, as well as a weakening in the 2023 order book.
It said there was a risk that changes to the timing of shipments and associated customer payments meant it might not achieve its target to reduce net debt by the year end to 2.4x, although it still expects the 2.7x recorded at June 30.
However, it remains "comfortably on track" to meet consensus expectations for earnings before interest, tax and amortisation in 2022.
Elsewhere in London, TT Electronics jumped 12% as the electronic component manufacturer completed a buy-in of all its UK benefit pension liabilities for a cash benefit of GBP6 million.
On AIM, Real Good Food skyrocketed, nearly doubling from their closing price on Friday after the Liverpool-based food manufacturer secured GBP2.5 million in funding to support its turnaround.
"We are delighted that new funding has been secured to support the radical reform of Real Good Food which is intended to reduce costs, protect revenues and preserve the inherent value of the group. With support from both customers and employees, we are making good progress on the required reforms and several major customers have already agreed to significant price re-sets," said Executive Chair Mike Holt.
The new funding is more than Real Good Food's market capitalisation of GBP1.7 million.
In European equities on Monday, the CAC 40 in Paris ended down 0.2%, while the DAX 40 in Frankfurt ended 0.4% lower.
Stocks in New York were in the red at the London equities close, with the Dow Jones Industrial Average down 0.5%, the S&P 500 index down 0.7%, and the Nasdaq Composite down 1.1%.
It is set to be a short week for US markets due to the upcoming Thanksgiving break on Thursday and Friday.
Brent oil was quoted at USD83.07 a barrel at the London equities close on Monday, down sharply from USD87.30 late Friday.
Brent prices have slipped back on concerns over weakening Chinese demand as well as reports that Saudi Arabia supports the idea of an increase in production.
Gold was quoted at USD1,733.19 an ounce at the London equities close on Monday, lower against USD1,757.30 at the close on Friday.
In Tuesday's UK corporate calendar, there are half-year results from Assura and Homeserve, as well as trading statements from CRH and Petershill Partners.
In the economic calendar, US Federal Reserve Cleveland President Loretta Mester will speak at 1600 GMT.
Coming later in the week, there are flash PMI readings for the EU, France and Germany on Wednesday.
By Heather Rydings; heatherrydings@alliancenews.com
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