London open: Stocks fall as investors fret about rising Covid cases, restrictions

London stocks fell in early trade on Thursday as optimism over a potential Covid-19 vaccine was replaced by worries about rising cases, tightening restrictions and their impact on the economy.

At 0840 GMT, the FTSE 100 was down 0.7% at 6,340.52.

CMC Markets analyst Michael Hewson said: "With infection and hospitalisation rates rising, and the risk that current lockdown restrictions either remain in place, or get extended into 2021, the probability that any economic damage will become permanent is only likely to increase. These risks then need to be offset by the longer-term benefits of a workable vaccine, which even if starting to get rolled out next year, could take up to two years to really make a difference."

In equity markets, discount retailer B&M European Value Retail slumped as its stock went ex-dividend.

B&Q owner Kingfisher fell even as it reported a strong rise in third-quarter sales as consumers spent the coronavirus lockdown improving their homes.

Richard Hunter, head of markets at Interactive Investor, noted that over the last year, the outperformance of the share price has been significant, with a rise of 43% compared to a decline of 13% for the wider FTSE 100.

"Quite apart from the challenges which may be yet to come, the strong performance has led to the question of whether the shares are now up with events, as evidenced by some initial profit taking in early trade, such that the market consensus of the shares remains at a hold," he said.

On the upside, Halma was the standout gainer on the FTSE 100 after the safety equipment maker revised its full-year profit forecasts and lifted its interim dividend as order intake in the second half increased year-on-year.

Morrisons also rallied after an upgrade to ‘buy’ at Goldman Sachs.

Speciality chemicals company Johnson Matthey gained after it reported a slump in first-half pre-tax profit as the coronavirus pandemic dented demand but said it expects a "materially stronger" second half.

Outsourcer Serco was a high riser after an article in The Times suggested it has attracted interest from at least two private equity firms that are quietly running the numbers with advice from investment banks.

Royal Mail rallied despite saying it swung to a loss in the first half as redundancy and Covid-19 costs more than offset higher revenue from booming parcel deliveries. The FTSE 250 group swung to a £20m operating loss in the six months to the end of September from a £61m profit a year earlier as revenue rose 9.8% to £5.7bn.

Online trading platform CMC Markets was up after it reported a record first-half performance as it benefited from ongoing volatility related to the pandemic.

Market Movers

FTSE 100 (UKX) 6,340.52 -0.70%
FTSE 250 (MCX) 19,590.08 -0.56%
techMARK (TASX) 3,984.09 0.01%

FTSE 100 - Risers

Halma (HLMA) 2,440.00p 3.83%
Morrison (Wm) Supermarkets (MRW) 185.00p 2.24%
BAE Systems (BA.) 507.60p 1.70%
Johnson Matthey (JMAT) 2,584.00p 1.33%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,132.00p 1.27%
Hikma Pharmaceuticals (HIK) 2,577.00p 1.22%
Hargreaves Lansdown (HL.) 1,543.50p 1.15%
AstraZeneca (AZN) 8,266.00p 1.05%
Scottish Mortgage Inv Trust (SMT) 1,019.00p 0.89%
Spirax-Sarco Engineering (SPX) 11,555.00p 0.78%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 483.60p -4.95%
Land Securities Group (LAND) 683.80p -3.13%
Kingfisher (KGF) 290.00p -3.11%
Barratt Developments (BDEV) 648.20p -2.70%
British Land Company (BLND) 485.20p -2.69%
BP (BP.) 245.30p -2.64%
Royal Dutch Shell 'B' (RDSB) 1,173.20p -2.56%
Melrose Industries (MRO) 162.10p -2.29%
Whitbread (WTB) 3,052.00p -2.18%
Royal Dutch Shell 'A' (RDSA) 1,230.60p -2.18%

FTSE 250 - Risers

Royal Mail (RMG) 304.20p 6.36%
Euromoney Institutional Investor (ERM) 1,034.00p 3.40%
CMC Markets (CMCX) 406.50p 2.91%
Micro Focus International (MCRO) 366.10p 2.72%
Serco Group (SRP) 117.70p 2.62%
QinetiQ Group (QQ.) 316.40p 2.39%
Watches of Switzerland Group (WOSG) 490.00p 2.08%
Capita (CPI) 41.50p 1.97%
Trainline (TRN) 463.20p 1.62%
Kainos Group (KNOS) 1,288.00p 1.58%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 72.25p -9.12%
Cineworld Group (CINE) 44.50p -8.06%
Shaftesbury (SHB) 532.00p -6.17%
SSP Group (SSPG) 311.20p -4.95%
Investec (INVP) 196.65p -3.74%
Virgin Money UK (VMUK) 147.50p -3.41%
Wood Group (John) (WG.) 267.50p -2.80%
Capital & Counties Properties (CAPC) 141.20p -2.75%
Carnival (CCL) 1,168.00p -2.67%
Mitchells & Butlers (MAB) 228.00p -2.56%