London close: Stocks weaker as Covid, US stimulus drag on sentiment

(Sharecast News) - Stocks in London finished weaker on Thursday, amid tightening coronavirus restrictions across Europe and as hopes of further US stimulus faded.
The FTSE 100 ended the session down 1.73% at 5,832.52, and the FTSE 250 was off 0.62% at 17,838.45.

Sterling was weaker in afternoon trading, last falling 0.75% against the dollar to $1.2914, and slipping 0.39% against the euro to €1.1035.

"Investors were greeted with a sea of red as global equity markets slumped on Thursday," said Russ Mould, investment director at AJ Bell.

"It is becoming more apparent that the pandemic could still be raging well into 2021 and so economic prospects have become even more clouded.

"There were also negative comments from US Treasury Secretary Steven Mnuchin that a big stimulus deal was unlikely before next month's presidential election, in line with previous comments from Donald Trump."

Investors spent much of the day mulling the imposition of further restrictions in France, Germany, the Netherlands, Ireland, Spain and the UK.

Press reports suggested Londoners will be subject to so-called tier-2 Covid-19 restrictions from Saturday, meaning that the mixing of households indoors and at pubs and restaurants would not be allowed.

Under the change from tier-1 to tier-2 restrictions, or from 'medium' to 'high' Covid-19 risk, the 2200 curfew for pubs and restaurants would also continue to apply.

Market participants were also growing increasingly doubtful about the prospect of further US stimulus after Treasury Secretary Steven Mnuchin said a pre-election package was unlikely.

"Renewed health concerns and tighter restrictions around Europe are hammering stocks this morning," said CMC Markets analyst David Madden.

"In recent weeks, the chatter surrounding a possible stimulus package in the US grabbed traders' attention, but all the while the health situation was deteriorating."

Madden said the pandemic had returned to centre stage, while the prospects of a US relief package this side of the presidential election seemed very low.

"Dealers are dumping stocks for fear that economic activity will drop off because of the tighter restrictions in various parts of Europe."

Brexit was also very much in focus, as the two-day European Union summit began.

"So far there are no signs of a compromise leading to a breakthrough, though fears the UK would walk away from the talks today seem to have eased with negotiators adamant they can get a declaration in the next couple of weeks," said Neil Wilson, chief market analyst at Markets.com.

"I think we could easily see another month of toing and froing over the final sticking points around the level playing field, governance and fisheries.

"Bottom line, both sides want a deal and as far as sterling is concerned, it's still a currency people want to own."

In equity markets, stocks related to the travel, hospitality and leisure sectors all took a hit as investors fretted about the impact of tightening Covid restrictions.

Premier Inn owner Whitbread was down 2.98%, InterContinental Hotels lost 3.1%, cruise operator Carnival was off 2.35%, and WHSmith slipped 0.71%, while Cineworld was 7.89% weaker and Upper Crust owner SSP slid 3.26%.

Outside the FTSE 350, pub and hotel chain Marston's was 1.43% lower after saying it would cut more than 2,000 jobs due to the impact of the pandemic and ensuing restrictions.

Airlines were under the cosh after Ryanair said it was cutting planned winter capacity by a third due to the latest round of travel restrictions across Europe.

Domino's Pizza Group was 8.6% weaker even as it said it expects full-year profit to be in line with market consensus despite the uncertain backdrop and reported a rise in third-quarter sales and an "exceptional" digital performance.

On the upside, online electricals retailer AO World rallied 30.67% after saying it expected half-year revenue to rise by more than half driven by strong performances in the UK and Germany.

Market Movers

FTSE 100 (UKX) 5,832.52 -1.73%
FTSE 250 (MCX) 17,838.45 -0.62%
techMARK (TASX) 3,785.74 -1.21%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 195.10p 8.39%
Just Eat Takeaway.Com N.V. (CDI) (JET) 9,598.00p 2.06%
Standard Chartered (STAN) 360.50p 1.61%
HSBC Holdings (HSBA) 299.25p 0.89%
Flutter Entertainment (FLTR) 13,085.00p 0.89%
Land Securities Group (LAND) 540.50p 0.80%
British Land Company (BLND) 362.50p 0.42%
Auto Trader Group (AUTO) 576.60p 0.00%
B&M European Value Retail S.A. (DI) (BME) 509.60p 0.00%
Pennon Group (PNN) 1,017.00p -0.15%

FTSE 100 - Fallers

Mondi (MNDI) 1,591.00p -4.59%
Pearson (PSON) 540.00p -4.36%
Burberry Group (BRBY) 1,487.50p -4.31%
Prudential (PRU) 1,078.50p -3.71%
Royal Dutch Shell 'B' (RDSB) 926.10p -3.60%
Glencore (GLEN) 162.72p -3.59%
Royal Dutch Shell 'A' (RDSA) 954.40p -3.59%
Associated British Foods (ABF) 1,730.00p -3.54%
BT Group (BT.A) 102.20p -3.54%
GlaxoSmithKline (GSK) 1,376.20p -3.47%

FTSE 250 - Risers

AO World (AO.) 302.50p 30.67%
TI Fluid Systems (TIFS) 189.80p 6.15%
GCP Infrastructure Investments Ltd (GCP) 116.80p 2.82%
Vivo Energy (VVO) 74.50p 2.72%
Network International Holdings (NETW) 312.40p 2.43%
Coats Group (COA) 58.10p 2.29%
Bodycote (BOY) 672.00p 2.13%
Beazley (BEZ) 337.00p 2.12%
Just Eat Takeaway.Com N.V. (CDI) (JET) 9,598.00p 2.06%
GCP Student Living (DIGS) 120.80p 2.03%

FTSE 250 - Fallers

Domino's Pizza Group (DOM) 340.00p -8.60%
Cineworld Group (CINE) 24.87p -7.89%
Greencore Group (GNC) 96.25p -7.81%
Capita (CPI) 25.84p -7.45%
IWG (IWG) 269.20p -6.46%
Perpetual Income & Growth Inv Trust (PLI) 222.50p -6.12%
Dunelm Group (DNLM) 1,482.00p -4.82%
Energean (ENOG) 530.70p -4.65%
Rank Group (RNK) 91.90p -4.57%
Close Brothers Group (CBG) 1,034.00p -4.08%