London midday: Stocks fall amid third wave worries, ahead of EU summit

London stocks had extended losses by midday on Thursday as investors eyed the EU vaccine summit, amid ongoing concerns about a third wave of Covid-19.

The FTSE 100 was down 1% at 6,647.96, with EU leaders set to hold virtual talks to decide whether to ban vaccine exports.

Spreadex analyst Connor Campbell said: "Not only will it see EU leaders discuss whether to ban vaccine exports, it could further set the tone of the UK’s post-Brexit relationship with the bloc.

"Since the summit is set to continue into Friday, and may produce no firm answer given the reservations officials reportedly have over decision-making done via virtual meetings, the markets could be left wanting.

"However, any hint as to which direction the EU will swing could have an outsized impact on the UK markets especially."

On home turf, the latest survey from the Confederation of British Industry showed retailers remained under pressure in March but the situation is expected to improve next month.

The balance of retailers reporting year-on-year growth in sales was steady compared to February at -45. Analysts had expected it to improve to -37.

Looking ahead, however, the picture was brighter, with retailers expecting sales to grow in the year to April. The retail sales expectations balance for April rose to +17% from -62% in March. This is the first time expectations have been positive since December 2019, ahead of the re-opening of non-essential shops from 12 April.

But the CBI was keen to point out that the base for comparison is "relatively low", given that April 2020 saw the joint sharpest fall in sales since the start of the survey in 1983.

Ben Jones, Principal Economist at the CBI, said: "Retailers are looking forward to April with a sense of optimism, given the potential re-opening of the sector across the UK. However, it is clear that the potential easing of domestic restrictions next month will not be a panacea for all retailers.

"Expectations point to a fairly muted recovery, especially when considering that base effects will tend to flatter annual growth next month, given the historic drop in sales in April 2020."

In equity markets, ex-dividend stocks were a drag, with NatWest, British American Tobacco, Schroders, Ferguson, Pearson, Ferrexpo, Vistry, CLS and Close Brothers all in the frame.

Cineworld tumbled after saying it swung to a huge full-year loss as the movie house chain felt the full impact of closures during the pandemic and warned any tightening of restrictions would force it to raise extra cash.

Travel stocks were under the cosh again, with Carnival, Tui and Upper Crust owner SSP all weaker.

On the upside, Intertek was the top performer on the FTSE 100 after JPMorgan said it was its preferred name in the testing, inspection and certification space, followed by Bureau Veritas.

Catering group Compass gained after it said profitability improved in the second quarter while volumes stayed subdued because of the Covid-19 crisis.

Online trading platform operator CMC Markets rallied after lifting its full-year guidance following a "strong" fourth-quarter performance.

Market Movers

FTSE 100 (UKX) 6,647.96 -0.97%
FTSE 250 (MCX) 21,264.79 -0.64%
techMARK (TASX) 4,155.92 -0.58%

FTSE 100 - Risers

Intertek Group (ITRK) 5,678.00p 2.68%
Experian (EXPN) 2,497.00p 1.79%
Persimmon (PSN) 2,980.00p 1.19%
Ocado Group (OCDO) 2,079.00p 1.17%
Vodafone Group (VOD) 135.42p 1.12%
SSE (SSE) 1,444.00p 1.05%
Taylor Wimpey (TW.) 180.00p 1.04%
Bunzl (BNZL) 2,342.00p 1.04%
Berkeley Group Holdings (The) (BKG) 4,444.00p 1.02%
Severn Trent (SVT) 2,303.00p 0.96%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,897.00p -4.84%
Glencore (GLEN) 266.75p -4.10%
Antofagasta (ANTO) 1,616.50p -4.09%
British American Tobacco (BATS) 2,737.50p -3.95%
Rolls-Royce Holdings (RR.) 103.95p -3.75%
NATWEST GROUP PLC ORD 100P (NWG) 189.35p -3.37%
Schroders (SDR) 3,435.00p -3.10%
British Land Company (BLND) 499.30p -2.90%
Pearson (PSON) 764.40p -2.75%
Melrose Industries (MRO) 164.70p -2.60%

FTSE 250 - Risers

XP Power Ltd. (DI) (XPP) 4,800.00p 3.67%
CMC Markets (CMCX) 458.50p 3.27%
Biffa (BIFF) 275.50p 2.61%
Babcock International Group (BAB) 239.20p 2.00%
Drax Group (DRX) 438.40p 1.72%
Future (FUTR) 1,924.00p 1.58%
JTC (JTC) 644.00p 1.58%
Hammerson (HMSO) 32.81p 1.45%
Henderson Smaller Companies Inv Trust (HSL) 1,136.00p 1.43%
Britvic (BVIC) 832.50p 1.40%

FTSE 250 - Fallers

Cineworld Group (CINE) 93.84p -8.72%
Ferrexpo (FXPO) 355.00p -7.70%
Carnival (CCL) 1,521.00p -5.91%
Tullow Oil (TLW) 49.09p -5.49%
TUI AG Reg Shs (DI) (TUI) 361.40p -4.54%
Frasers Group (FRAS) 455.80p -3.84%
Capital & Counties Properties (CAPC) 166.20p -3.54%
Energean (ENOG) 865.40p -3.51%
SSP Group (SSPG) 332.80p -3.26%
Shaftesbury (SHB) 627.50p -3.16%