London midday: Stocks a little lower ahead of Sunak speech
By Michele Maatouk
Date: Wednesday 08 Jul 2020
(Sharecast News) - London stocks were still a little lower by midday on Wednesday amid worries about a rise in coronavirus cases in the US and Australia, as investors eyed Chancellor Rishi Sunak's mini budget.
The FTSE 100 was down 0.3% at 6,170.06.
Sunak is expected to announce a £2bn temporary job scheme for under-25s, a stamp duty holiday, a £3bn green investment package and a temporary VAT reduction.
Spreadex analyst Connor Campbell said: "As the US reaches 3 million covid-19 cases domestically, and Australia imposes a hard border between New South Wales and Victoria, investors couldn't shake their re-lockdown concerns on Wednesday.
"It's not the case numbers and return to stricter measures in and of themselves that are bothering investors, but rather the dampening effect they will have on the chances of a swift and sturdy global economic recovery.
"The UK index could have plenty more movement in it, given that today sees Chancellor Rishi Sunak's summer statement, or 'mini-budget'. Alongside the already-announced - or, rather, already-leaked - £1.57bn package, there are reports detailing a whole host of different options Sunak could unveil."
He said what is actually announced could dictate where the FTSE ends the day.
In equity markets, advertising company WPP was the worst performer on the top-flight index after Credit Suisse reinstated coverage of the stock at 'underperform', pointing to "rising industry disruption".
"Our analysis of the marketing industry suggests that clients are shifting spend more rapidly to digital transformation at a time when agencies still have at least 70% of their revenues from traditional services," it said. "Creative fee pressure, progressive in-housing of creative, production and media, competition in digital transformation from consultancies and new marketing technology (martech) firms remain the key challenges."
Asia-focused HSBC was under pressure following a report the US could target Hong Kong's currency peg with the dollar as a response to China's new security law. Standard Chartered was also weaker.
"Should the peg disappear it could further destabilise Hong Kong and increase currency impacts on earnings," said London Capital Group analyst Jasper Lawler.
Bus and rail operator FirstGroup tumbled as it pulled guidance and said it swung to a full-year loss as coronavirus lockdowns in the UK and US hit operations. National Express was also lower.
Victrex, a supplier of high-performance polymer solutions, lost ground after it reported an 18% decline in third-quarter revenues and said Covid-related headwinds began to impact its performance in May and June after a broadly stable performance in April.
On the upside, Micro Focus was in the black after a rating upgrade at Credit Suisse.
Market Movers
FTSE 100 (UKX) 6,170.06 -0.32%
FTSE 250 (MCX) 17,193.25 -0.90%
techMARK (TASX) 3,715.84 -0.34%
FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 2,062.00p 2.79%
Rolls-Royce Holdings (RR.) 284.40p 2.49%
Diageo (DGE) 2,787.50p 2.11%
London Stock Exchange Group (LSE) 8,444.00p 1.88%
Avast (AVST) 551.00p 1.38%
Hargreaves Lansdown (HL.) 1,606.50p 1.13%
Reckitt Benckiser Group (RB.) 7,522.00p 1.13%
Rentokil Initial (RTO) 523.00p 0.93%
InterContinental Hotels Group (IHG) 3,854.00p 0.86%
Ocado Group (OCDO) 2,038.00p 0.84%
FTSE 100 - Fallers
WPP (WPP) 592.40p -5.19%
HSBC Holdings (HSBA) 382.00p -3.33%
JD Sports Fashion (JD.) 647.00p -3.20%
International Consolidated Airlines Group SA (CDI) (IAG) 214.40p -2.81%
Ashtead Group (AHT) 2,696.00p -2.35%
Melrose Industries (MRO) 116.25p -2.27%
Johnson Matthey (JMAT) 2,101.00p -1.87%
Evraz (EVR) 296.20p -1.76%
Burberry Group (BRBY) 1,582.00p -1.74%
Kingfisher (KGF) 221.10p -1.73%
FTSE 250 - Risers
Micro Focus International (MCRO) 366.30p 3.83%
PureTech Health (PRTC) 275.00p 3.38%
ICG Enterprise Trust (ICGT) 762.00p 2.97%
Centamin (DI) (CEY) 188.25p 2.76%
Euromoney Institutional Investor (ERM) 874.00p 2.46%
IP Group (IPO) 63.00p 2.44%
Spirent Communications (SPT) 252.50p 2.43%
Fidelity China Special Situations (FCSS) 304.00p 2.01%
Airtel Africa (AAF) 61.70p 1.48%
TI Fluid Systems (TIFS) 182.80p 1.44%
FTSE 250 - Fallers
FirstGroup (FGP) 41.86p -14.88%
Victrex plc (VCT) 1,854.00p -6.65%
Mitchells & Butlers (MAB) 162.20p -5.81%
National Express Group (NEX) 166.60p -5.61%
Cineworld Group (CINE) 54.64p -5.57%
Signature Aviation (SIG) 232.60p -5.33%
Barr (A.G.) (BAG) 446.00p -4.39%
Wizz Air Holdings (WIZZ) 3,244.00p -4.36%
Vivo Energy (VVO) 75.10p -4.33%
easyJet (EZJ) 672.60p -4.32%
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