(Alliance News) - Stocks in London ended on a subdued note on Friday as investors became mindful of a rise in coronavirus cases after the US state of Texas put its reopening plan on hold.
The FTSE 100 index closed up 12.16 points, or 0.2%, at 6,159.30, and ended the week down 0.8%.
The FTSE 250 closed flat at 17,113.21, ending the week down 2.3%. The AIM All-Share closed flat at 883.14, ending the week down 0.4%.
The Cboe UK 100 ended up 0.2% at 10,440.04, the Cboe UK 250 closed down 0.1% at 14,605.40 and the Cboe Small Companies ended down 1.1% at 9,315.12.
In Paris the CAC 40 ended down 0.2%, while the DAX 30 in Frankfurt ended down 0.7%.
"What seemed to be a fairly positive day for stocks has turned sour very quickly as Wall Street dives on the open and European markets follow suit to give up their gains for the day. The week is ending on a disappointing note, as US virus cases rise and investors fret that lockdowns will have to be reimposed, or worse that they won't be and the death toll will grow sharply," said IG Group's Chris Beauchamp.
In the FTSE 100, Tesco ended up 2.2% after the UK's largest supermarket chain said higher volumes and business rates relief in its first-quarter only partly offset the extra costs of kitting out stores to comply with Covid-19 measures and of increasing online capacity.
Total sales in the 13 weeks ended May 30 increased by 8.0% to GBP13.38 billion, a 7.9% like-for-like increase. This was most pronounced in the UK and Republic of Ireland, where sales were up 9.2% at GBP12.21 billion and up 8.2% like-for-like. Online capacity increased to 1.3 million slots per week from 600,000.
Later on Friday, Tesco said it is "disappointed" and will continue to "engage with shareholders" after the company's remuneration report was rejected by a number of investors at its annual general meeting.
In the FTSE 250, Weir Group ended up 5.6% after the valve actuators maker completed the refinancing of its main banking facilities, with a syndicate of 12 global banks.
The facilities comprise a new USD950 million revolving credit facility which will mature in June 2023 with the option to extend for up to a further two years and a new GBP200 million term loan, which will mature in March 2022.
At the other end of the midcaps, Aston Martin Lagonda ended the worst performer, down 18% at 50.90 pence after the luxury carmaker raised GBP152 million from its placing and retail offer of 304.0 million shares at 50 pence each. Its market value currently sits at around GBP774 million.
Earlier in the day, Aston Martin announced plans to sell new shares totalling up to 19.99% of its current issued share capital in an attempt to secure enough cash to "successfully emerge from the extended Covid-19 lock-down".
This has completed, with the 304.0 million shares representing the full 19.99%. The 50p placing price represented an 8.1% discount to the middle market price when the placing price was agreed.
The pound was quoted at USD1.2326 at the London equities close, down sharply from USD1.2405 at the close Thursday as Brexit concerns returned to the fore, with the UK and EU continuing to butt heads over tariffs.
The euro stood at USD1.1210 at the European equities close, marginally lower from USD1.1216 late Thursday.
With the talks deadlocked, it was thought the EU could agree to give the UK the ability to break free from its rules - in return for the right to impose tariffs if it chose to do so. The UK leaves the EU on December 31.
On Thursday, UK Prime Minister Boris Johnson's senior Brexit adviser David Frost indicated that the next phase of talks with the EU will be tough.
Frost said the "intensified process" in discussions next week needed to be realistic. He said the UK would not allow Brussels the right to hit back at changes in British law with tariffs.
In bullish language, Frost insisted that UK sovereignty over laws, courts, and fishing waters was "not up for discussion".
"I want to be clear that the government will not agree to ideas like the one currently circulating giving the EU a new right to retaliate with tariffs if we chose to make laws suiting our interests," Frost added.
Looking ahead, the pound could be at risk to a sizeable sell-off should a combination of a 'no deal' Brexit and a Covid-19 slump combine towards the end of 2020, commented Societe Generale.
"Sterling is particularly vulnerable to a poor global backdrop. Brexit was never going to be easy for the economy, and with the risk of no trade deal or only a de minimis one being agreed with the EU before the end of the year, the UK has more economic downside than most, and sterling could be vulnerable," noted Kit Juckes, global head of G10 strategy at SocGen.
Against the yen, the dollar was trading at JPY107.21, flat from JPY107.17 late Thursday.
Stocks in New York were sharply lower at the London equities close after the state of Texas partly reversed the reopening of its economy due to surging coronavirus cases.
The DJIA was down 2.1%, the S&P 500 index down 2.0% and the Nasdaq Composite was down 2.2%.
On Thursday, Texas saw another record number of new cases clocking in at 5,996, as well as hospitalizations - 4,739.
In light of the spike in cases, Texas Governor Greg Abbott took drastic action to respond to the post-reopening coronavirus surge, shutting bars back down and scaling back restaurant capacity to 50%.
Abbott also shut down river-rafting trips and banned outdoor gatherings of over 100 people unless local officials approve.
In addition, Florida reported 122,960 Covid-19 cases on Friday, up 7.8% from a day earlier, compared with an average increase of 4.1% in the previous week. The one-day increase of 8,942 was the most on record.
Major US banks were in the red after the Federal Reserve late Thursday ordered the industry to suspend buybacks and limit dividend payments amid uncertainty due to the coronavirus.
JPMorgan Chase was down 5.2%, Goldman Sachs down 6.6%, Bank of America down 5.3% and Wells Fargo down 6.2%.
Meanwhile, Nike was down 5.5% after the sportswear giant late Thursday reported a surprise loss as shutdowns due to Covid-19 prompted a big drop in revenues in spite of higher online sales.
Beaverton, Oregon-based Nike reported a loss of USD790 million in the quarter ending May 31, which translated to a loss of 51 cents per share compared with analyst expectations for nine cents per share in profit. Revenue tumbled 38% to USD6.3 billion following huge declines in sales in most of the world.
On the economic front, US incomes dropped in May as stimulus measures to counter the coronavirus downturn expired, while spending recovered after two months of losses, according to government data.
The USD2.2 trillion CARES Act stimulus program passed in late March made a one-time payments directly into the pockets of Americans and also expanded unemployment benefits for the tens of millions who lost their jobs as the downturn arrived.
Those funds boosted incomes in April by 10.8% but the effect wore off in May and income fell 4.2%, the latest Commerce Department showed, although that was a less severe drop than expected. At the same time expenditures were strong, growing 8.2% after falling 12.6% in April.
Brent oil was quoted at USD40.70 a barrel at the London close, up from USD40.44 at the close Thursday.
Gold was quoted at USD1,760.70 an ounce at the London equities close, flat from USD1,760.11 late Thursday.
The economic events calendar on Monday has Spain and Germany inflation readings at 0800 BST and 1300 BST, respectively. In addition, financial in Shanghai will reopen on Monday after being closed two days for the Dragon Boat Festival.
The UK corporate calendar on Monday there are full-year results from GB Group, Distil and Draper Esprit.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Tesco (TSCO)
Weir Group (WEIR)
Aston Martin Lagonda (AML)