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LONDON MARKET EARLY CALL: Lower Call As Coronavirus Cases Surge

Mon, 26th Oct 2020 06:55

(Alliance News) - Stock prices in London are seen opening lower on Monday amid fears over coronavirus cases spiking in Europe and more countries imposing new measures against the pandemic.

IG futures indicate the FTSE 100 index is to open 40.28 points lower at 5,820.00. The blue-chip index closed up 74.63 points, or 1.3%, at 5,860.28 Friday.

The new wave already had forced governments in several countries including the UK, Germany and France to reimpose tough restrictions to prevent the disease from spreading.

Spain declared a national state of emergency on Sunday to tackle a second coronavirus wave as the World Health Organization reported a third straight day of record new infections across the world.

The WHO has warned that some countries are on a "dangerous track", with too many witnessing an exponential increase in cases, and called on countries to take further action to curb the spread of the disease.

In total, the UN agency's figures showed that 465,319 cases were declared on Saturday alone, half of them in Europe.

Italy has ordered the closure of theatres, cinemas and gyms and said bars and restaurants must shut early.

In the US, a record of nearly 80,000 new Covid-19 infections over the course of a day were reported on Friday, according to figures from Johns Hopkins University.

The virus has now claimed the lives of 1.1 million people and infected more than 42 million globally.

The Japanese Nikkei 225 index closed down 0.1%. In mainland China, the Shanghai Composite is down 1.1%. Financial markets in Hong Kong are closed for a local holiday, the Chung Yeung festival.

"On the health crisis front, things seem to be taking a turn for the worse. A number of US states, and countries, like Italy, The Netherlands and Hungry have registered a jump in Covid-19 cases. Spain has declared a state of emergency, and France is believed to be preparing for tougher restrictions. Stocks in Asia are showing modest losses. The deteriorating health situation has put pressure on US index futures and European indices are pointing lower," CMC Markets analyst David Madden said.

Meanwhile, China's communist leadership on Monday kicked off a four-day meeting to draw the next five-year economic plan and set development goals until 2035.

China's 14th five-year plan is set to focus on economic self-reliance, technological innovation and a cleaner environment. The plenum is set to run until Thursday, but decisions made there will likely not be announced until the next parliamentary session, which usually takes place in March.

The pound was quoted at USD1.3025 early Monday, down from USD1.3050 at the London equities close Friday.

The euro was priced at USD1.1838, flat from USD1.1840. Against the yen, the dollar was trading at JPY104.87, flat from JPY104.80.

Brent oil was trading at USD40.88 a barrel on Monday morning, down sharply from USD42.25 late Friday. Gold was quoted at USD1,897.25 an ounce, lower from USD1,900.50.

In the US on Friday, Wall Street ended mostly higher, with the S&P 500 ending up 0.3% and Nasdaq Composite 0.4% higher. The Dow Jones Industrial Average finished down 0.1%.

The economic events calendar on Monday has US new home sales at 1500 GMT.

The UK corporate calendar on Monday has third quarter results from THG Holdings.

Ahead in the economic events calendar this week, there are interest rate decisions from the Bank of Japan and European Central Bank on Thursday.

In a busy UK earnings calendar this week, there are third quarter results due from lender HSBC and oil major BP on Tuesday and drugmaker GlaxoSmithKline on Wednesday. On Thursday oil major Royal Dutch Shell reports third quarter earnings, followed by state-backed lender NatWest on Friday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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