London midday: Stocks turn lower as Covid concerns weigh
By Michele Maatouk
Date: Friday 25 Sep 2020
(Sharecast News) - London equity markets had turned lower by midday on Friday, with travel-related stocks under the cosh again as worries about rising Covid-19 cases and further restrictions knocked sentiment.
The FTSE 100 was down 0.6% at 5,787.96, on course for heavy weekly losses.
Richard Hunter, head of markets at Interactive Investor, said: "It has been a generally torrid week for markets, with Covid-19 regaining centre stage as the ongoing lack of a vaccine and further tightening rules threaten to derail what was becoming a slow recovery.
"In the UK, further relief measures announced by the Chancellor were a welcome development, but the moves were never going to be a panacea for the UK's economic ills. Fiscal support looks likely to wane over the next few months with a further wave of unemployment looking inevitable, as the latest lockdown restrictions begin to bite on several affected sectors."
Investors were digesting the latest figures from the Office for National Statistics, which showed the government borrowed £35.9bn in August - the third highest monthly figure on record - as tax revenue fell and it spent to deal with the economic effects of the Covid-19 crisis.
August's net borrowing figure was a record for the month and £30.5bn more than a year earlier. But the total was less than in March and April as the economy picked up and some workers returned to work from furlough. It was also less than the average economists' forecast of £38bn.
"The government borrowed another huge sum in August as it continued to absorb much of the cost of the Covid-19 crisis," said Capital Economics UK economist Andrew Wishart. "But while the chancellor announced some modest further support yesterday, the big picture is that fiscal support will fade over the autumn causing many more job losses to be realised.
"After an impressive rebound in Q3, we think the resurgence of the virus and new restrictions will cause GDP to stagnate for the rest of this year, hurting tax revenues."
In equity markets, British Airways and Iberia parent IAG and engine maker Rolls-Royce fell sharply amid concerns about the impact of the coronavirus and related restrictions on the airline industry.
Budget airline easyJet, InterContinental Hotels and Upper Crust owner SSP were also weaker on similar worries.
Aviva and Vodafone were in focus on the back of deal news.
Reuters reported that a consortium of Germany's Allianz and life insurer Athora Holdings is in talks to buy the French operations of the London-listed insurer. It cited sources as saying the deal could be worth between €2bn and €3bn.
Meanwhile, Spain's El Economista suggested that Vodafone has begun talks to buy Spanish rival MasMovil with the three buyout funds that recently took it over.
Pennon was higher after saying it was on track to report first-half results in line with its own expectations and was considering the best use of funds from the sale of its waste management business.
West End landlord Shaftesbury dipped after it scrapped its final dividend and said almost half of rents due for the second half had been waived or were still due amid the Covid-19 crisis.
Market Movers
FTSE 100 (UKX) 5,787.96 -0.60%
FTSE 250 (MCX) 16,759.95 -0.25%
techMARK (TASX) 3,686.45 -0.53%
FTSE 100 - Risers
Pearson (PSON) 548.00p 2.12%
Homeserve (HSV) 1,246.00p 1.80%
Avast (AVST) 535.00p 1.71%
United Utilities Group (UU.) 866.60p 1.67%
National Grid (NG.) 846.00p 0.93%
Lloyds Banking Group (LLOY) 24.79p 0.85%
SSE (SSE) 1,179.50p 0.73%
M&G (MNG) 147.20p 0.72%
BP (BP.) 234.00p 0.69%
Imperial Brands (IMB) 1,389.00p 0.65%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 89.94p -5.56%
Rolls-Royce Holdings (RR.) 142.25p -5.23%
InterContinental Hotels Group (IHG) 3,833.00p -3.40%
Land Securities Group (LAND) 475.25p -2.82%
British Land Company (BLND) 316.50p -2.47%
Standard Chartered (STAN) 337.50p -2.46%
Rio Tinto (RIO) 4,696.50p -2.41%
RSA Insurance Group (RSA) 444.70p -2.29%
Smurfit Kappa Group (SKG) 2,834.00p -2.28%
Smith (DS) (SMDS) 271.20p -2.13%
FTSE 250 - Risers
PZ Cussons (PZC) 227.00p 5.83%
Scottish Inv Trust (SCIN) 739.00p 5.12%
Ascential (ASCL) 280.80p 4.62%
Morgan Sindall Group (MGNS) 1,138.00p 4.60%
Cineworld Group (CINE) 43.14p 4.30%
Law Debenture Corp. (LWDB) 497.00p 3.22%
Cairn Energy (CNE) 129.40p 3.03%
John Laing Group (JLG) 305.20p 2.76%
Caledonia Investments (CLDN) 2,470.00p 2.70%
Jupiter Fund Management (JUP) 212.00p 2.61%
FTSE 250 - Fallers
Sirius Real Estate Ltd. (SRE) 72.40p -5.24%
Rank Group (RNK) 86.90p -5.23%
Fisher (James) & Sons (FSJ) 1,128.00p -4.24%
Workspace Group (WKP) 473.20p -4.09%
SSP Group (SSPG) 187.40p -3.75%
Indivior (INDV) 113.70p -3.73%
Contour Global (GLO) 188.40p -3.68%
Marks & Spencer Group (MKS) 93.88p -3.44%
Petrofac Ltd. (PFC) 106.80p -3.26%
WH Smith (SMWH) 943.50p -2.98%
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