London close: Stocks finish weaker amid rising Covid concerns

(Sharecast News) - London stocks closed in negative territory on Friday, amid concerns about rising coronavirus cases and the introduction of further mobility restrictions, as investors digested the latest UK retail sales data.

The FTSE 100 ended the session down 0.71% at 6,007.05, and the FTSE 250 was off 0.95% at 17,569.68.

Sterling was weaker against its major trading pairs, last falling 0.22% on the dollar to $1.2905, while losing 0.29% against the euro to €1.0917.

Earlier, Health Secretary Matt Hancock said in response to reports of a possible two-week national lockdown in October that such a move would be the "last line of defence" but did not rule it out.

Speaking to Sky News, Hancock said: "We do have to recognise that the number of cases is rising and we do have to act because we know, especially from looking at other countries, that inexorably leads to more hospitalisations and sadly more deaths.

"And that is what we want to minimise and we want to protect people's livelihoods at the same time."

According to reports, measures being discussed by the government, described as a "circuit break", include asking some hospitality businesses to close, or limiting the opening hours of some pubs and restaurants in England.

"Amid growing chatter about a potential two-week nationwide lockdown in October in the UK, it was perhaps no surprise to see investors lose interest in stocks that could be negatively affected by such activity.

"The Government wants to avoid economic disruption, but clearly a return to tighter lockdown measures next month would disrupt businesses and put further pressure on jobs."

On the data front, figures from the Office for National Statistics showed that retail sales grew for the fourth month in a row in August as the post-lockdown recovery continues.

Sales rose 0.8% on the month, coming in ahead of expectations for a 0.7% increase.

On the year, retail sales were 2.8% higher, versus expectations of 3% growth.

Retail sales were currently 4% higher than they were before the Covid-19 pandemic in February.

The figures showed that spending on home improvements continued to rise in August, with sales at household goods stores up 9.9% compared with February.

Online retail sales fell 2.5% in August when from July, but the strong growth seen over the pandemic means sales were still 46.8% higher than pre-crisis levels.

"Retail sales continued to grow, further surpassing their pre-pandemic level," said deputy national statistician for economic statistics, Jonathan Athow.

"Sales of household goods thrived as the demand for home improvement continued and, despite a dip this month, online sales remained high."

Athow said clothing stores were still struggling with sales "well below" their February level.

"Overall, the switch to greater online sales means the high street remains under pressure."

In equity markets, travel-related stocks were hit by concerns about Covid, with British Airways owner IAG down 14.6% , InterContinental Hotels off 4.48%, Premier Inn owner Whitbread losing 2.35%, easyJet sliding 9.19%, Carnival 7.91% weaker, and Wizz Air 4.59% lower.

Investment manager Investec fell managed gains of 0.8% after saying it would scrap an interim dividend as it guided for a fall of up to 57% in headline earnings per share in volatile market conditions caused by the pandemic.

London Stock Exchange was 1.33% higher as it confirmed that it has entered into exclusive discussions with Euronext over the sale of Borsa Italiana.

Man Group gained 4.07% as it announced a one-year share buyback programme of up to $100m (£77m) to reduce its share capital and pay shares to employees.

Market Movers

FTSE 100 (UKX) 6,007.05 -0.71%
FTSE 250 (MCX) 17,569.68 -0.95%
techMARK (TASX) 3,853.98 -0.11%

FTSE 100 - Risers

Fresnillo (FRES) 1,343.00p 4.92%
Pennon Group (PNN) 1,060.50p 4.02%
Ocado Group (OCDO) 2,817.00p 3.87%
Evraz (EVR) 347.40p 2.24%
Schroders (SDR) 2,840.00p 2.16%
United Utilities Group (UU.) 870.40p 2.06%
Tesco (TSCO) 219.60p 2.04%
Severn Trent (SVT) 2,457.00p 2.03%
Sainsbury (J) (SBRY) 195.00p 2.01%
M&G (MNG) 158.20p 1.41%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 110.55p -14.60%
Polymetal International (POLY) 1,763.50p -6.25%
Rolls-Royce Holdings (RR.) 180.15p -5.13%
Barratt Developments (BDEV) 473.90p -5.03%
WPP (WPP) 599.60p -4.52%
InterContinental Hotels Group (IHG) 4,132.00p -4.48%
RSA Insurance Group (RSA) 479.30p -4.41%
Taylor Wimpey (TW.) 105.30p -4.36%
Johnson Matthey (JMAT) 2,482.00p -4.34%
British Land Company (BLND) 350.00p -4.32%

FTSE 250 - Risers

Airtel Africa (AAF) 66.10p 9.44%
Ferrexpo (FXPO) 201.60p 7.92%
John Laing Group (JLG) 304.20p 6.81%
PureTech Health (PRTC) 289.50p 6.04%
Hochschild Mining (HOC) 250.60p 4.85%
Energean (ENOG) 635.00p 4.10%
Kainos Group (KNOS) 1,026.00p 4.10%
Man Group (EMG) 121.45p 4.07%
Helios Towers (HTWS) 167.00p 3.97%
Rank Group (RNK) 103.80p 3.80%

FTSE 250 - Fallers

Network International Holdings (NETW) 265.20p -21.86%
Essentra (ESNT) 258.00p -9.47%
easyJet (EZJ) 539.60p -9.19%
Hammerson (HMSO) 20.08p -8.66%
Carnival (CCL) 947.60p -7.91%
Just Group (JUST) 45.52p -7.59%
RHI Magnesita N.V. (DI) (RHIM) 2,686.00p -6.61%
Euromoney Institutional Investor (ERM) 809.00p -5.98%
Wizz Air Holdings (WIZZ) 3,362.00p -5.72%
Morgan Advanced Materials (MGAM) 221.00p -5.71%