(Alliance News) - Stocks in London ended sharply lower on Friday over fears of the spread of mutant coronavirus strains and amid increased volatility in equity markets in New York, as the battle between the established Wall Street order and social media-mobilised retail investors hots up.
In response to the market heightened volatility, the US Securities & Exchange Commission said it was "closely monitoring and evaluating the extreme price volatility of certain stocks". The regulator also said it "will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities."
The FTSE 100 index closed down 118.69 points or 1.8%, at 6,407.46 - closing the week 4.6% lower.
The FTSE 250 ended down 139.67 points, or 0.7%, at 20,228.58, falling 2.7% since the start of the week. The AIM All-Share closed down 12.20 points, or 1.0%, at 1,160.67, and finished the week 3.1% lower.
The Cboe UK 100 ended down 1.8% at 637.08, the Cboe UK 250 closed down 0.3% at 17,793.41, and the Cboe Small Companies ended down 0.1% at 12,094.42.
In Paris, the CAC 40 ended 2.0% lower, while the DAX 30 in Frankfurt lost 1.7%.
Stocks in New York were in the red at the London equities close as investors digested data on the latest coronavirus vaccine and monitored the ongoing fluctuations of GameStop and other volatile equities.
The DJIA was 0.7% lower, the S&P 500 index down 0.5% and the Nasdaq Composite down 0.7%.
Shares of GameStop and AMC Entertainment soared again, up 72% and 64% respectively, after online trading platform Robinhood lifted restrictions on trades. The companies have shot higher this week following a campaign by retail investors mobilised on Reddit in opposition to hedge funds who have bet on declines.
CMC Markets analyst David Madden said: "Fear is running through the equity markets again as some trading apps have relaxed restrictions on certain stocks that have experienced colossal volatility recently, like Gamestop. There are concerns that we could see frenzied trading again by retail players in selected stocks and that could renew fears that some hedge funds might adopt a cut and run policy, hence why equity markets are lower across the board.
"It is worth noting that indices are off the lows of the session. The EU has approved the AstraZeneca-Oxford coronavirus drug for use in the bloc, but keep in mind the roll-out of other vaccinations have been slow. In addition to that, supply constraints persist."
AstraZeneca announced that its Covid-19 vaccine has been recommended for conditional marketing authorisation in the EU, for use on all adults. The stock closed down 2.1%.
The vaccine has already been given a CMA for emergency use in 20 countries.
The Committee for Medicinal Products for Human Use based its positive opinion of the vaccine on a rolling review of trial data from the phase three programme led by the University of Oxford.
The CHMP has recommended that two doses of Covid-19 vaccine AstraZeneca, formerly known as AZD1222, be administered at a four-to-12 week interval, a dosing regimen demonstrated in clinical trials to be safe and effective in preventing symptomatic Covid-19.
The FTSE 100 pharmaceutical giant expects the EU to shortly approve a CMA for active immunisation across member states shortly. In addition, Astra is seeking emergency use listing from the World Health Organization to increase availability in low-income countries.
Crucially, the CHMP backed the jab to be used in all adults, including the elderly. On Thursday, Germany's vaccine commission STIKO said it was recommending use of the vaccine among under-65-year-olds only, due to insufficient data on its effectiveness on older people.
In addition, Johnson & Johnson said its Covid-19 vaccine has an overall efficacy of 66%, with 85% effectiveness in preventing severe Covid-19 across all geographical regions, but only 57% success rate in preventing a variant in South Africa.
The J&J vaccine has been eagerly anticipated because it requires only one shot, in contrast to other options now on the market.
The stock was 3.7% lower in New York
Meanwhile, Chevron was 3.3% lower after the oil major posted a loss for 2020 in a year which saw the coronavirus pandemic slam the oil industry.
Revenue for the three months to December 31 fell 31% to USD25.25 billion from USD36.35 billion a year ago, with Chevron's net loss narrowing to USD656 million from USD6.67 billion a year ago. The company posted a diluted loss per share of USD0.33, slimming from a loss of USD3.51 a year before.
Total costs & other deductions fell 41% to USD26.20 billion in the recent quarter from USD44.76 billion a year prior.
In the FTSE 100, Just Eat Takeaway ended the best performer among a handful of stocks, up 4.0%. The food delivery platform has been one of the beneficiaries of stringent lockdown conditions as restaurants are only permitted to offer takeaway services.
London Stock Exchange Group closed up 0.8% after the stock exchange operator confirmed its USD27 billion acclaimed acquisition for financial market data and infrastructure provider Refinitiv has been completed.
Gold and silver miner Fresnillo closed up 0.5% once again benefitting from a rise in silver prices as retail investors cast their eye over the precious metals space.
A WallSteetBets post on Reddit said: "Silver Bullion Market is one of the most manipulated on earth. Any short squeeze in silver paper shorts would be EPIC. We know billion banks are manipulating gold and silver to cover real inflation. Both the industrial case and monetary case, debt printing has never been more favourable for the No.1 inflation hedge silver. Inflation adjusted silver should be at USD1000 instead of USD25."
Spot silver was trading at USD27.04 an ounce late Friday, up from USD26.44 at the London equities close Thursday.
ThinkMarkets analyst Fawad Razaqzada said: Silver has been today's main attraction point as it added another 3.5% to its 5% rise the day before. It looks like the grey metal has become the latest target for Reddit day traders after new posts on WallStreetBets on Thursday encouraged people to pile into iShares Silver Trust. Precious metals continue to receive tailwind support from the ongoing flood of cheap central bank money. But silver is continuing to outperform gold. The global economy is expected to recover with the rollout of Covid-19 vaccines and this may boost industrial demand for silver (and other base metals) relative to gold.
"Another key factor that could drive silver higher in the year ahead is the fact many developed, and some developing countries, are moving towards cleaner energy and away from fossil fuels for their energy needs."
Gold was quoted at USD1,857.20 an ounce at the London equities close, little changed against USD1,856.61 late Thursday.
At the other end of the large caps, Prudential once again ended in the red, down 5.1%. The 172-year-old insurer on Thursday announced plans to demerge its US business in the second quarter of 2021. The proposed demerger would accelerate its Jackson separation, completing the breakup of the Pru and its push to focus on its high-growth Asia and Africa businesses. It also said it is contemplating raising around USD2.5 billion to USD3 billion in Hong Kong or London, or both, with the hope or increasing its investor base in Asia.
The pound was quoted at USD.3712 at the London equities close, down from USD1.3725 at the close Thursday.
The euro stood at USD1.2135 at the European equities close, up from USD1.2125 late Thursday. Against the yen, the dollar was trading at JPY104.75, up from JPY104.30 late Thursday.
Brent oil was quoted at USD56.00 a barrel at the London close, up from USD55.80 at the close Thursday.
The economic events calendar on Monday has Germany retail sales at 0700 GMT. In addition, there are manufacturing PMI readings from Germany, the eurozone and the UK at 0855 GMT, 0900 GMT and 0930 GMT respectively.
The UK corporate calendar on Monday has third-quarter earnings from Irish carrier Ryanair Holdings and interim results from fund supermarket Hargreaves Lansdown.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Prudential (PRU)
Fresnillo (FRES)
Just Eat Takeaw (JET)
