(Alliance News) - Stocks in London ended mostly in the negative territory on Friday amid concerns over the growing number of new coronavirus cases in the US.
"Equity benchmarks have been hit by health concerns again," said MCM Markets UK analyst David Madden. "All of the gains the FTSE 100 made yesterday have been lost today on renewed health fears."
Madden added: "Trading volumes have been low as the US market is closed as it is a public holiday."
The FTSE 100 index closed down 95.54 points, or 1.5%, at 6,144.82. For the week, the blue-chip index ended down 0.1%.
The FTSE 250 ended down 77.48 points, or 0.5%, at 17,290.38, while the AIM All-Share closed up 0.80 of a point, or 0.1% at 892.66.
The Cboe UK 100 ended down 1.5% at 612.39, the Cboe UK 250 closed down 0.5% at 14,733.34, and the Cboe Small Companies ended down 0.1% at 12,148.23.
In Paris the CAC 40 ended down 1.1%, while the DAX 30 in Frankfurt ended down 0.8%.
The US posted a record 53,000 new coronavirus cases as the deadly pandemic accelerated across the Americas, but its slowdown in Europe led Britain to announce Friday the first exemptions to its quarantine rules.
With Europe looking to turn the page on the biggest public health crisis in modern history, travellers arriving into Britain from Germany, France, Spain and Italy will no longer be required to self-isolate starting July 10.
UK Transport Secretary Grant Shapps said the change, which reverses a two-week quarantine policy imposed in June, would lead to the "reopening of the nation".
Touching almost every country on Earth, Covid-19 – the disease brought on by the virus – has hit at least 10.7 million people and killed 516,000 globally, shattering previously buoyant economies and bringing public life to a standstill.
Yet while much of the planet pursued a return to some semblance of normality, the US soared past 50,000 new infections Thursday for the second time in two days.
On the London Stock Exchange, Land Securities ended the day 0.9% higher after the commercial property developer said that, following the reopening of most of its properties after the easing of lockdown measures, it has continued to make progress on the collection of rent and is set to reinstate its dividend.
All of LandSec's office properties have remained open, and following the easing of restrictions on non-essential retail in the UK in mid-June, all shopping centres, outlets and retail parks have now open.
By the end of June, 79% of the the real estate investment trust's retail units were trading, while 16 out of 18 leisure parks were open. Accor-managed hotels remain closed, but will go through a phased reopening over the next three months.
Looking ahead, LandSec said it intends to reinstate dividend payments following the announcement of its interim results on November 10. As at June 30, the group's adjusted net debt was GBP3.92 billion compared to GBP3.93 billion at the end of March.
On the other side of the blue-chip index was Rio Tinto, ending the day 2.4% lower, as its Oyu Tolgoi mine in Mongolia is expected to see a 21 to 29 month delay for first production, which will increase the development capital needed for the project by between USD1.3 billion to USD1.8 billion from the original USD5.3 billion.
The updated mine design is the result of the review announced by Rio Tinto in July 2019 when enhanced geotechnical and geological information obtained from drilling and mapping at depth suggested there may be "some stability risks" associated with the original mine design.
Rio Tinto's ownership share is 33.5% of Hugo Dummett North and 29.5% of Hugo Dummett North Extension - both at Oyu Tolgoi in Mongolia.
The probable ore reserves for Hugo Dummett North have been revised down to 400 million tonnes from 447 million at the end of 2019, while the North Extension seen its reserves revised upwards to 40 million tonnes from 32 million tonnes.
Associated British Foods closed down 1.5% after Goldman Sachs cut the Primark stores owner to Neutral from Buy.
Turning to the FTSE 250s, Carnival was down 1.9% after saying that Costa has paused all its cruises until August 15 and has cancelled all its cruises in Northern Europe for the rest of the 2020 summer season.
Carnival said the decision is linked to uncertainty regarding the gradual reopening of ports to cruise ships as well as the restrictions that may still be in place due to the Covid-19 pandemic.
"Costa is taking steps to inform both travel agents and guests affected by these changes. They will be guaranteed a re-protection in accordance with the applicable legislation, which offers the highest guarantee in this contingency situation. In the meantime, Costa is working alongside all relevant Authorities to define health protocols for a potential restart of cruises as soon as possible," the company said.
On Thursday, Carnival had said its German subsidiary AIDA Cruises has extended the pause of its operations until the end of August.
Essentra closed as the best performer among the midcaps, up 8.1%, as its trading for the second quarter of 2020 was much more affected by the Covid-19 pandemic than in the first.
However, the plastic and fibre products maker noted improvement in revenue as the quarter progressed.
In April, Essentra's like-for-like revenue declined by 17% but its performance improved from there, with a 10% drop in May and for June it is expected to have fallen just 1%. For the second quarter ended June 30, Essentra expects a 10% like-for-like revenue decline, while for the six-month period the decline is anticipated to be 9%.
Looking ahead, Essentra expects some continued some disruption to trading in the coming months, but, for the third quarter, Essentra expects the trend of revenue improvement to continue from the second quarter.
Rank Group closed up 1.2% on Friday. The company said it will start reopening its Mecca bingo clubs starting Saturday in line with updated UK government lockdown guidance.
Rank will open 35 venues in England at first followed by another 30 in a phased approach throughout July and August, including venues in Scotland and Wales when permitted.
Revenue has been at around 60% of the levels seen before the Covid-19 pandemic. Rank's Digital business has done particularly well, with fourth-quarter revenue growth of around 17% on a proforma basis.
The company is forecasting an operating profit for its year ended June 30 at the lower end of its GBP40 million to GP58 million prior guidance after IFRS16 "due to the venues reopening costs being expensed".
With Mecca reopened, monthly cash outflow is expected to ease to GBP7 million per month from around GBP10 million, and Rank expects to become cashflow positive before deferred duty and rental payments once Grosvenor reopens.
The pound was quoted at USD1.2465 at the London equities close, unchanged from the close on Thursday.
The euro stood at USD1.1242 at the European equities close, firm from USD1.1236 late Thursday.
Against the yen, the dollar was trading at JPY107.52, little changed from JPY107.55 late Thursday.
The eurozone's private sector saw a sharp improvement in conditions in June, according to IHS Markit on Friday, though activity continued to contract.
The composite output index for June surged to 48.5 points from May's 31.9, hitting its best level in four months and exceeding the flash reading of 47.5 by a full point. However, with the reading remaining below the no-change mark of 50, the latest data indicate business conditions in the eurozone remain tough.
France was the top performing country in terms of composite purchasing managers' index while Ireland was the worst. All those covered, though, recorded four-month highs in June.
Incoming new business continued to decline in June, but at a "much slower rate", said IHS Markit. Underlying demand also remained weak both at home and abroad, with exports falling at a "severe pace".
Brent oil was quoted at USD42.66 a barrel at the London close, firm from USD42.30 at the close Thursday.
"The energy market is sensitive to the perceptions about demand, and seeing as several US states are undoing the reopening of their economies, there are fears that demand will dip," explained Madden.
Gold was quoted at USD1,775.00 an ounce at the London equities close, soft against USD1,775.75 late Thursday.
The economic events calendar on Monday has UK CIPS/Markit construction PMI at 0930 BST and EU retail trade figures at 1000 BST.
In the afternoon, there is US services PMI at 1445 BST.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Rio Tinto (RIO)
Rank (RNK)
Carnival (CCL)
Essentra (ESNT)
AB Foods (ABF)
