(Alliance News) - Stocks in London were shaky at midday on Friday as poor economic data from China fostered worry that it economic recovery is faltering, while travel stocks dived after the UK imposed a quarantine on people entering from France, forcing holidaymakers to rush back home to beat the weekend deadline.
In London, the blue-chip FTSE 100 index was down 131.11 points, or 2.1%, at 6,054.80 at midday. The mid-cap FTSE 250 index was off 231.02 points, or 1.3%, at 17,693.48. The AIM All-Share index was down 5.32 points, or 0.6%, at 951.48.
The Cboe UK 100 index was down 2.3% at 603.69. The Cboe 250 was down 1.4% at 15,118.68, and the Cboe Small Companies down 0.3% at 9,598.65.
Stocks in mainland Europe weren't faring much better. The CAC 40 index in Paris was down 2.1%, while the DAX 30 in Frankfurt was down 1.4%
"China was first in to the coronavirus crisis and arguably one of the first to come out of its first phase, so the fragile nature of its recovery offers an uncomfortable view of the future for other countries," said AJ Bell investment director Russ Mould.
Retail sales – a key indication of consumer sentiment – shrank by 1.1% on-year in July, falling short of forecasts and suggesting many are still reticent about going out to spend time and money, even as China appears to have the virus largely under control. The latest data follows a drop of 1.8% on-year for retail sales in June.
Meanwhile, industrial production in China grew by 4.8% in July, the same as the previous month, but below predictions of 5.2% growth.
In London, International Consolidated Airlines Group was down 5.5%. Shares in the British Airways parent were lower after the UK added France to its 14-day quarantine list.
People arriving in the UK after 0400 BST on Saturday will be required to spend 14 days in self-isolation due to rising numbers of coronavirus cases in France. The conditions also will apply to travellers returning to the UK from the Netherlands, Monaco, Malta, Turks & Caicos and Aruba.
The move, which applies throughout the UK, comes after Prime Minister Boris Johnson promised to be "absolutely ruthless" in decisions about imposing quarantine restrictions on countries.
The problem for airlines is that people's desire for a break in the sun may be outweighed by their fear of the logistical challenges of holing up for two weeks when they get back home, with decisions on which countries to add to the quarantine list often coming at short notice.
"With France being added to the quarantine list for the UK, travel & leisure is under pressure. Shares in IAG, Ryanair, Tui and EasyJet were all sharply lower as the move will force a large swathe of cancellations right at the peak of the summer holiday season for one of the largest markets for UK tourists. Half a million Brits are thought to be in France right now," noted Markets.com analyst Neil Wilson.
Irish budget carrier Ryanair Holdings was down 4.6%. UK peer easyJet was down 6.5%. Dart Group, which owns the Jet2 airline, was down 7.1%.
Anglo-German holiday operator TUI was down 5.3%.
Outside of travel stocks, Rank Group was the best mid-cap performer, up 2.4%, ahead of UK casinos being allowed to reopen on Saturday.
Casinos, bowling alleys and casinos were on the list of UK businesses that will be allowed to welcome customers back for the first time on Saturday after months of lockdown.
Hollywood Bowl Group was up 8.5%, while Ten Entertainment Group was up 3.2%.
At the other end of the FTSE 250 index, WH Smith was down 3.7%. The books and stationery retailer makes a substantial amount of its revenue from stores in airports and train stations and so also is threatened by travel restrictions.
On the AIM, Verona Pharma was up 21%. The drugmaker said the impact of Covid-19 on clinical trials in the first half has been limited.
Verona remains on track to start its Phase 3 clinical trials with ensifentrine for the treatment of chronic obstructive pulmonary disease later in 2020. It also has received a notice from US Food & Drug Administration to proceed with a study of ensifentrine in patients with Covid-19 at the University of Alabama.
In New York, the Dow Jones Industrial Average was pointed to open down 0.5%, the S&P 500 index down 0.3% and the Nasdaq Composite down 0.1%.
The pound was quoted at USD1.3094 on Friday at midday, firm from USD1.3084 at London equities close Thursday.
The euro was priced at USD1.1807, down from USD1.1830. Against the yen, the dollar was quoted at JPY106.75 in London, lower from JPY106.90.
The eurozone economy crashed 12% in the second quarter of 2020, according to figures from Eurostat on Friday.
This quarter-on-quarter decline was the worst reading since the series started in 1995. In the first three months of the year, gross domestic product fell 3.6% sequentially.
Year-on-year, the eurozone economy shrank 15% in the three months to June, again the sharpest decline seen since 1995 and a deterioration from the 3.1% fall posted for the first quarter. Two quarters in a row of contraction mean the eurozone economy has entered into recession.
In commodities, Brent oil was trading at USD44.66 a barrel Friday midday, down from USD45.18 a barrel Thursday evening in London.
Gold was quoted at USD1,950.86 an ounce at midday, slightly higher from USD1,947.60 an ounce at the London equities close Thursday.
Still to come in the economic events calendar on Friday are US retail sales figures at 1330 BST.
By Neetika Kurup; neetikakurup@alliancenews.com
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