London close: Stocks lower as Johnson confirms lockdown easing plans

London stocks finished just below the waterline on Monday, as investors digested Boris Johnson’s plans to gradually ease lockdown measures across England, amid worries about rising inflation.

The FTSE 100 ended the session down 0.18% at 6,612.24, and the FTSE 250 was off 0.26% at 20,981.09.

Sterling was powering ahead against its major pairs, last rising 0.45% on the dollar to trade at $1.4079, and gaining 0.16% to €1.1579 against the common currency.

“While investors do not appear to be in a jubilant mood regarding the UK’s route out of lockdown, the overall tone of the afternoon has not been particularly negative either,” said IG chief market analyst Chris Beauchamp.

“Some of Friday’s selling has leaked over into the new week, but in general the moves to the downside appear to have been contained once again.”

Beauchamp said even the bond yield trade had lessened to an extent.

“Bond traders can hardly be faulted for their excitement however, since after years of declining yields the prospect of a change is bound to cause some ruckus, and it is this that has hit equity markets of late.

“Some of that move has continued, with a 2% fall for the Nasdaq 100 and its pricey high-growth stocks the standout performer this afternoon for all the wrong reasons.”

Late in the afternoon, prime minister Boris Johnson confirmed details of his so-called roadmap out of lockdown to the House of Commons, after much of the plan was leaked overnight.

The first part of the four-phase plan will see all schools reopen on 8 March, with people allowed to meet one other adult outdoors at that time as well, for purposes beyond the currently-permitted exercise.

Additionally, the ‘rule of six’ will return outdoors from 29 March, when gatherings of either up to six people or two households will be permitted outdoors, with outdoor sports facilities being permitted to reopen.

The second phase from 12 April will see non-essential retail, including hairdressers and other health and beauty premises, as well as public buildings such as libraries and museums reopen.

Indoor leisure including swimming pools and gyms, and outdoor social venues such as beer gardens, zoos, theme parks and alcohol takeaways will also reopen, as will self-contained holiday accommodation.

In the third phase, from 17 May, the ‘rule of six’ will be replaced with a limit on social gatherings of up to 30 people, with two households permitted to meet indoors once more.

Cinemas, performing arts, sporting venues and hotels will also reopen, with up to 10,000 people allowed in the largest stadia, allowing for socially-distanced live sport to return.

Finally, the fourth phase from 21 June will see all legal limits on social contact removed, with any remaining closed sectors of the economy being allowed to trade once more.

Johnson stressed, however, that the timing of all four phases would be entirely dependent on infection and hospitalisation rates coming down satisfactorily, and as such none of them were necessarily set in stone.

“While investors are no doubt happy the country is loosening the restrictions once again, the reality is they don’t hold positions in schools and picnics,” said Spreadex analyst Connor Campbell.

In equity markets, Just Eat Takeaway was down 3.16% and online supermarket Ocado lost 6.17%, both of which having benefited significantly from lockdowns and Covid restrictions.

G4S slumped 9.77% after Canadian security services firm GardaWorld said it will not raise its offer for the company, paving the way for Allied Universal to buy the London-listed security services firm for 245p a share.

CMC Markets analyst Michael Hewson said the news about GardaWorld had disappointed those shareholders who were holding out for a better offer than Allied Universal’s.

"G4S has been a business that has seen its fair share of problems over the past three years, its share price down sharply from the record highs seen back in July 2017,” Hewson said.

“Last year the company reported a £91m loss after writing down the value of its cash handling business, and has also been involved in a number of incidents that have damaged its credibility.

“The shareholder hold-outs need to accept that they are unlikely to wring any more out of this particular bid, and accept the money on the table now.”

Smith & Nephew was knocked 3.97% lower by a downgrade to ‘hold’ at Commerzbank, while B&M European Value Retail was 3.21% weaker after a downgrade to ‘hold’ at Peel Hunt.

On the upside, travel and leisure stocks gained on the prospect of easing restrictions, with Paddy Power owner Flutter Entertainment up 3.71%, British Airways owner IAG ascending 7.45%, Premier Inn owner Whitbread adding 3.39%, InterContinental Hotels rising 3.95%, Cineworld shining 8.99% and TUI 8.72% higher.

Pub group Mitchells & Butlers reversed earlier losses to close up 4.49% following the prime minister’s lockdown announcement.

It earlier reported that it had been burning up to £35m in cash a month since the start of the year as it launched a £351m placing to bolster its balance sheet from the coronavirus pandemic.

IAG was in focus after saying it had boosted total liquidity by £2.45bn, via a loan deal and deferred pension deficit payments to help it weather the pandemic.

WH Smith, easyJet, Wizz Air and Wetherspoons also rallied, by 6%, 7.34%, 6.19% and 6.15%, respectively.

Elsewhere, miner Glencore was boosted 1.47% by an upgrade to ‘overweight’ at JPMorgan.

Market Movers

FTSE 100 (UKX) 6,612.24 -0.18%
FTSE 250 (MCX) 20,981.09 -0.26%
techMARK (TASX) 4,034.92 -0.44%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 178.10p 7.45%
Rolls-Royce Holdings (RR.) 105.50p 6.88%
Informa (INF) 536.60p 5.42%
Compass Group (CPG) 1,486.00p 4.21%
InterContinental Hotels Group (IHG) 5,312.00p 3.95%
Flutter Entertainment (FLTR) 14,130.00p 3.71%
Whitbread (WTB) 3,533.00p 3.39%
Aviva (AV.) 374.80p 2.83%
BP (BP.) 279.95p 2.79%
Entain (ENT) 1,396.50p 2.53%

FTSE 100 - Fallers

Ocado Group (OCDO) 2,401.00p -6.17%
Scottish Mortgage Inv Trust (SMT) 1,267.00p -5.87%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,166.00p -4.56%
Smith & Nephew (SN.) 1,415.00p -3.97%
Aveva Group (AVV) 3,618.00p -3.67%
Reckitt Benckiser Group (RB.) 5,854.00p -3.59%
Spirax-Sarco Engineering (SPX) 10,955.00p -3.31%
B&M European Value Retail S.A. (DI) (BME) 561.60p -3.21%
Rentokil Initial (RTO) 484.00p -2.91%
Rightmove (RMV) 620.20p -2.88%

FTSE 250 - Risers

Cineworld Group (CINE) 88.04p 8.99%
TUI AG Reg Shs (DI) (TUI) 387.90p 8.72%
Rank Group (RNK) 152.40p 8.43%
Wetherspoon (J.D.) (JDW) 1,338.00p 8.25%
Carnival (CCL) 1,558.50p 8.21%
easyJet (EZJ) 892.20p 7.34%
Babcock International Group (BAB) 245.30p 7.16%
Wizz Air Holdings (WIZZ) 5,185.00p 6.91%
Synthomer (SYNT) 495.60p 6.87%
WH Smith (SMWH) 1,785.00p 6.00%

FTSE 250 - Fallers

G4S (GFS) 242.60p -9.81%
Fidelity China Special Situations (FCSS) 457.00p -5.28%
Premier Foods (PFD) 88.30p -5.16%
Baillie Gifford US Growth Trust (USA) 354.00p -4.84%
Diploma (DPLM) 2,432.00p -4.63%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,166.00p -4.56%
JPMorgan Emerging Markets Inv Trust (JMG) 143.70p -4.45%
Allianz Technology Trust (ATT) 3,050.00p -4.39%
Templeton Emerging Markets Inv Trust (TEM) 1,020.00p -3.95%
Lancashire Holdings Limited (LRE) 616.50p -3.77%