London close: Stocks sink further as lockdown pressure rises

Market Close Report
15:19, 28th October 2020

(Sharecast News) - London stocks were well into negative territory at the close on Wednesday, amid growing concerns about tightening coronavirus restrictions across Europe and calls for another national lockdown in the UK.

The FTSE 100 ended the session down 2.55% at 5,582.80, and the FTSE 250 was 1.93% weaker at 17,248.91.

Sterling was last 0.45% lower against the dollar at $1.2985, and off 0.14% on the euro at €1.1043.

Investors were mulling over news that German Chancellor Angela Merkel wants all bars and restaurants to close for a month from 4 November to help slow the spread of Covid-19.

If the measures are agreed, shops would be allowed to remain open, while restaurants would only be allowed to offer takeaways.

Meanwhile, there were also reports that France is considering a month-long nationwide lockdown, with President Macron due to make an announcement later in the day.

On home shores, Prime Minister Boris Johnson was said to be under pressure for a second national lockdown after the UK recorded its highest Covid-19 death toll since May.

According to reports, Sage analysis suggests that tier three - the highest level of restrictions - may be needed across all of England by mid-December.

"After Tuesday's relative calm we have seen a return to the unrelenting selling of Monday's session, only this time it is arguably even more dramatic," said IG chief market analyst Chris Beauchamp.

"Global indices are deep in the red, as Germany prepares to head back into a national lockdown, with Switzerland following suit.

"In these circumstances, a UK lockdown seems not far behind, given the current direction of travel across the continent."

Beauchamp days Monday's price action had gave "strong hints" that the low had not arrived yet, with Wednesday's moves proving that, and the "rush for the exits" continuing for the time being.

"The impressive dive in European markets over the past few days has revealed how dire sentiment is towards this part of the world, with already weak GDP forecasts likely being hastily revised yet lower thanks to the return of lockdown policies."

In equity markets, property stocks British Land and Land Securities slumped 4.16% and 2.41%, respectively, amid fears of another lockdown.

CMC Markets analyst Michael Hewson said investors will be worried "that more lockdowns will hollow out their real estate portfolios even further".

Travel and leisure stocks were also under the cosh, with British Airways owner IAG down 2.76%, InterContinental Hotels off 1.74%, Premier Inn owner Whitbread losing 3.05% and Upper Crust owner SSP sliding 4.12%.

Cineworld, Carnival and Wizz Air all lower as well, by 6.86%, 7.64% and 5.33%.

Brick manufacturer Ibstock fell 1.89% despite reporting a recovery in demand in the third quarter.

On the upside, clothing retailer Next rose 0.72% as it lifted full-year profit guidance after a better-than-expected rise in third quarter sales.

The company forecast a pre-tax profit of £365m, up £65m from a central scenario given in September.

Shares of Aston Martin Lagonda rose 0.92% after Mercedes-Benz said it would be lifting its stake in the company to 20% over the next few years.

Kaz Minerals rallied 9.29% after it agreed to be bought by Nova Resources in a deal that values the copper company at £3bn.

Medical products company ConvaTec gained 3.3% after saying it now expects to deliver full-year revenue growth at the higher end of guidance following a better-than-expected performance in the third quarter.

Market Movers

FTSE 100 (UKX) 5,582.80 -2.55%
FTSE 250 (MCX) 17,248.91 -1.93%
techMARK (TASX) 3,580.08 -2.58%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 84.54p 12.49%
Admiral Group (ADM) 2,767.00p 0.87%
Next (NXT) 6,096.00p 0.72%
Ocado Group (OCDO) 2,313.00p 0.04%
B&M European Value Retail S.A. (DI) (BME) 488.10p 0.04%
Flutter Entertainment (FLTR) 12,285.00p -0.20%
Avast (AVST) 494.80p -0.48%
Hargreaves Lansdown (HL.) 1,373.00p -0.62%
Auto Trader Group (AUTO) 578.40p -0.96%
Reckitt Benckiser Group (RB.) 6,890.00p -1.03%

FTSE 100 - Fallers

Fresnillo (FRES) 1,160.50p -6.11%
Polymetal International (POLY) 1,665.00p -5.58%
Informa (INF) 420.20p -5.25%
Anglo American (AAL) 1,796.40p -5.07%
Johnson Matthey (JMAT) 2,198.00p -4.97%
Aveva Group (AVV) 4,275.00p -4.94%
Taylor Wimpey (TW.) 105.75p -4.43%
Intermediate Capital Group (ICP) 1,171.00p -4.41%
BAE Systems (BA.) 413.60p -4.24%
3i Group (III) 976.80p -4.24%

FTSE 250 - Risers

Kaz Minerals (KAZ) 628.00p 10.02%
Convatec Group (CTEC) 191.00p 3.30%
Brewin Dolphin Holdings (BRW) 238.50p 2.55%
Watches of Switzerland Group (WOSG) 408.50p 2.13%
BMO Commercial Property Trust Limited (BCPT) 62.20p 1.63%
Syncona Limited NPV (SYNC) 252.00p 1.41%
Trainline (TRN) 279.80p 1.38%
Provident Financial (PFG) 228.20p 1.33%
CMC Markets (CMCX) 324.00p 1.26%
Ferrexpo (FXPO) 181.60p 1.17%

FTSE 250 - Fallers

Ibstock (IBST) 163.00p -8.89%
Carnival (CCL) 838.80p -7.64%
FirstGroup (FGP) 43.46p -7.45%
Micro Focus International (MCRO) 228.00p -7.24%
Coats Group (COA) 56.50p -7.07%
Cineworld Group (CINE) 24.32p -6.86%
Hochschild Mining (HOC) 211.00p -6.55%
Centamin (DI) (CEY) 122.75p -6.26%
Paragon Banking Group (PAG) 299.00p -5.68%
Wetherspoon (J.D.) (JDW) 862.50p -5.63%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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