London close: Stocks finish lower amid US-China concerns
London’s benchmark slipped back into the red in late trading on Thursday, having briefly broken above the waterline during the afternoon, amid growing tensions between the US and China, and after Whitbread announced a £1bn rights issue.
The FTSE 100 ended the session down 0.86% at 6,015.25, while the FTSE 250 rose 0.11% to 16,385.96.
Sterling was mixed against its major trading pairs, last falling 0.17% against the dollar to $1.2224, and strengthening 0.06% on the euro to €1.1159.
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.
“Donald Trump’s increasingly inflammatory election tactics weighed heavy on the markets on Thursday,” said Spreadex analyst Connor Campbell.
“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.”
Campbell noted that Trump also said China was on a “massive disinformation campaign”, claiming they wanted 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.
IHS Markit/CIPS said the flash reading of its 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.
The reading was still, 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 12.36% 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 by 4.26% 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 by 7.75% 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 gained 7.84% 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 4.43% 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.
It said the routes would mainly cover domestic flights in the UK and France.
FTSE 100 - Risers
Intertek Group (ITRK) 5,238.00p 6.08%
easyJet (EZJ) 574.80p 4.43%
BT Group (BT.A) 114.70p 3.71%
International Consolidated Airlines Group SA (CDI) (IAG) 206.10p 3.65%
Rolls-Royce Holdings (RR.) 283.30p 3.51%
Land Securities Group (LAND) 554.20p 3.20%
Ocado Group (OCDO) 2,059.00p 3.13%
Next (NXT) 4,637.00p 2.77%
Berkeley Group Holdings (The) (BKG) 3,984.00p 2.10%
ITV (ITV) 76.00p 2.07%
FTSE 100 - Fallers
Whitbread (WTB) 2,479.00p -13.44%
Standard Chartered (STAN) 391.50p -5.32%
Lloyds Banking Group (LLOY) 28.39p -4.94%
Fresnillo (FRES) 773.00p -4.21%
Legal & General Group (LGEN) 185.70p -3.78%
Meggitt (MGGT) 264.10p -3.65%
HSBC Holdings (HSBA) 398.90p -3.36%
Antofagasta (ANTO) 829.40p -3.33%
Royal Bank of Scotland Group (RBS) 103.20p -3.33%
Tesco (TSCO) 227.10p -3.11%
FTSE 250 - Risers
PureTech Health (PRTC) 255.00p 9.44%
BMO Commercial Property Trust Limited (BCPT) 66.50p 8.13%
WH Smith (SMWH) 995.00p 7.68%
Future (FUTR) 1,092.00p 7.27%
Stagecoach Group (SGC) 59.65p 6.51%
Avon Rubber (AVON) 3,105.00p 6.27%
Rank Group (RNK) 138.00p 6.15%
Trainline (TRN) 496.20p 5.84%
Biffa (BIFF) 224.00p 5.66%
McCarthy & Stone (MCS) 67.20p 5.64%
FTSE 250 - Fallers
Inchcape (INCH) 457.20p -7.75%
Hochschild Mining (HOC) 205.80p -5.16%
Greencore Group (GNC) 132.20p -4.48%
Marston's (MARS) 32.56p -4.46%
Centamin (DI) (CEY) 173.85p -4.43%
Pets at Home Group (PETS) 220.00p -4.26%
C&C Group (CCR) 180.00p -4.26%
Investec (INVP) 154.25p -4.25%
Avast (AVST) 479.80p -4.14%
Countryside Properties (CSP) 276.80p -4.02%