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London pre-open: Stocks seen lower amid tightening Covid restrictions

By Michele Maatouk

Date: Thursday 15 Oct 2020

London pre-open: Stocks seen lower amid tightening Covid restrictions

(Sharecast News) - London stocks were set to fall at the open on Thursday as coronavirus restrictions across Europe are tightened and amid reports London could be put under Tier 2 restrictions as early as Friday.
The FTSE 100 was called to open 28 points lower at 5,907.

CMC Markets analyst Michael Hewson said: "Last night the French government announced a further tightening of restrictions across 8 French cities, including Paris, with 9pm to 6am curfews. These are expected to last up to six weeks.

"In the UK, the government in Northern Ireland set out its plans for its own mini 4 week lockdown, while the Welsh government was making plans to close the border with England. All the while the UK government is meeting resistance to its plans to implement tighter restrictions in the cities of Manchester and Liverpool.

"With the prospect of an imminent US stimulus plan diminishing by the day, rising infection rates prompting tighter restrictions across Europe, and little prospect of a vaccine before the middle of next year, is it any wonder that investors are starting to get a little twitchy, with European markets set to open lower this morning."

Meanwhile, press reports suggested that London was on the brink of tier 2 restrictions, which would mean that the mixing of households indoors and at pubs and restaurants would be banned.

In corporate news, online electrical retailer AO World said it expected half-year revenue to rise by more than half driven by strong performances in the UK and Germany.

The company said it expected group revenue to rise by 57% year on year for the six months to September 30. UK revenue increased by 54% and German sales rose 83% on a constant currency basis.

"In our UK retail business, the sales momentum continued from Q1 throughout Q2 despite the reopening of competitor bricks and mortar stores. We believe we have seen a lasting step change in online penetration," AO World said.

Mondi said that third quarter underlying EBITDA fell 20% year-on-year to €306m (£276.55m), despite lower costs.

The FTSE 100 packaging producer said compared to the second quarter, underlying EBITDA was 13% lower. It said good volume growth in uncoated fine paper and fibre-based packaging products, as well as ongoing strong cost control, was more-than-offset by the impact of planned maintenance shuts, negative currency effects and lower average selling prices.

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