London midday: Stocks maintain losses as Whitbread slumps on rights issue

London stocks were still in the red by midday on Thursday amid growing tensions between the US and China, with Whitbread pacing the decline as it announced a £1bn rights issue.

The FTSE 100 was down 0.8% at 6,017.30.

Souring relations between the US and China weighed on sentiment after the US Senate passed a bill overnight that could ban some Chinese companies from listing on American exchanges. US President Donald Trump inflamed the situation further by taking to Twitter to lash out against China over the coronavirus pandemic.

Spreadex analyst Connor Campbell said: "Donald Trump’s increasingly inflammatory election tactics weighed heavy on the markets on Thursday.

"Having already recently threatened to pull the US out of the WHO due to the organisation’s ‘pro-China’ bias, while blaming the pandemic on the 'incompetence’ of the rival superpower, Trump went further on Wednesday night, accusing Beijing of spreading ‘pain and carnage’ throughout the world. He also went on to state that China is on a ‘massive disinformation campaign’ because they want Joe Biden in the White House.

"Crucially, at the same time as this Twitter storm, the US government published a 20-page report detailing China’s so-called ‘malign activities’, covering its economic and military policies, as well as its human rights violations."

On home shores, data out earlier showed the private sector struggled in May as Covid-19 lockdown measures weighed heavily on the economy. The rate of decline in output did, however, ease compared to April’s historic slump.

The flash reading of the IHS Markit CIPS composite purchasing managers’ index was 28.9 in May, an improvement on April’s final reading of 13.8 and a two-month high. It was also above analyst forecasts for a reading of 25.7.

It remains, however, a record low, well below the 38.1 seen at the height of the global financial crisis in November 2008 and only beaten by April's reading. Anything below the neutral reading of 50.0 is regarded as a contraction.

The sluggish output was attributed “almost exclusively” to Covid-19, which has shut businesses, seen customers cancel orders and caused demand to plummet.

In equity markets, pub and hotel operator Whitbread tumbled after saying it was raising £1bn in a rights issue to bolster its balance sheet against the impact of the pandemic as it warned of a potential loss in 2021.

Pets at Home was also weaker as it said full-year revenue topped £1bn for the first time but warned that first-half pre-tax profit will take a hit from the coronavirus.

Car dealership Inchcape was in the red as it posted a 32% decline in revenue for the four months to the end of April and a 76% slump in like-for-like revenues in April, mainly due to Covid-19 disruption.

On the upside, Intertek was the standout gainer after saying it would pay its final dividend as the company reported a 4.6% fall in revenue for the first four months of 2020.

EasyJet rallied as the budget airline said it would begin to restart flying on 15 June with extra measures to reduce the risk of infection from Covid-19. The budget airline said a small number of flights would restart on routes where there was enough demand to be profitable. The routes will mainly cover domestic flights in the UK and France.

Market Movers

FTSE 100 (UKX) 6,017.30 -0.82%
FTSE 250 (MCX) 16,377.09 0.06%
techMARK (TASX) 3,718.83 0.12%

FTSE 100 - Risers

Intertek Group (ITRK) 5,250.00p 6.32%
easyJet (EZJ) 578.00p 5.01%
Rolls-Royce Holdings (RR.) 284.50p 3.95%
International Consolidated Airlines Group SA (CDI) (IAG) 206.60p 3.90%
Ocado Group (OCDO) 2,074.00p 3.88%
Melrose Industries (MRO) 95.16p 2.10%
BT Group (BT.A) 112.50p 1.72%
Aveva Group (AVV) 4,025.00p 1.44%
Spirax-Sarco Engineering (SPX) 9,650.00p 1.32%
Schroders (SDR) 2,854.00p 1.17%

FTSE 100 - Fallers

Whitbread (WTB) 2,514.00p -11.57%
Meggitt (MGGT) 264.50p -3.50%
Standard Chartered (STAN) 399.50p -3.39%
Carnival (CCL) 932.40p -3.28%
Centrica (CNA) 36.35p -3.20%
Fresnillo (FRES) 782.40p -3.05%
HSBC Holdings (HSBA) 400.95p -2.86%
Lloyds Banking Group (LLOY) 29.03p -2.81%
Tesco (TSCO) 227.90p -2.77%
Barclays (BARC) 103.98p -2.57%

FTSE 250 - Risers

BMO Commercial Property Trust Limited (BCPT) 67.00p 8.94%
PureTech Health (PRTC) 251.00p 7.73%
McCarthy & Stone (MCS) 67.20p 5.33%
Rank Group (RNK) 136.20p 4.77%
Assura (AGR) 79.00p 4.22%
UK Commercial Property Reit Limited (UKCM) 56.00p 4.09%
4Imprint Group (FOUR) 2,185.00p 4.05%
Petropavlovsk (POG) 26.45p 3.73%
Stagecoach Group (SGC) 58.90p 3.61%
Balfour Beatty (BBY) 244.20p 3.21%

FTSE 250 - Fallers

Pets at Home Group (PETS) 205.00p -10.79%
Inchcape (INCH) 462.60p -6.66%
Aston Martin Lagonda Global Holdings (AML) 36.02p -6.54%
Hochschild Mining (HOC) 206.40p -4.88%
Scottish Inv Trust (SCIN) 727.00p -4.09%
G4S (GFS) 87.86p -3.24%
Aggreko (AGK) 465.20p -3.20%
Elementis (ELM) 59.40p -3.02%
Hill & Smith Holdings (HILS) 1,146.00p -2.88%
Virgin Money UK (VMUK) 79.32p -2.70%