London close: Stocks finish weaker on London lockdown fears
London equity markets remained seriously depressed by the close on Monday, with travel, hospitality and leisure stocks all under the cosh as investors mulled the prospect of tougher lockdown restrictions.
The FTSE 100 ended the session down 3.38% at 5,804.29, and the FTSE 250 was off 3.98% at 16,870.78.
Sterling was weaker against its major trading pairs, last falling 0.92% on the dollar to $1.2798, and losing 0.05% on the euro to €1.0903.
“The fear of a London lockdown has clobbered the British stock market,” said CMC Markets analyst David Madden.
“The prospect of economic activity being curtailed across the board because of a potential reintroduction of tougher restrictions has hurt all sectors, but the hospitality industry has suffered the most today.
“Restaurants and pubs have had a brutal 2020 thanks to the pandemic and things only started to pick up for them in the past two months.”
Earlier, England's chief medical officer Chris Whitty and chief scientific adviser Sir Patrick Vallance addressed the nation on the latest coronavirus data.
Witty said the trend in the UK is heading in the wrong direction as cases continue to rise and warned that if things keep going as they are, there could be 200 deaths per day by mid-November.
Prime Minister Boris Johnson was set to address the nation later in the week over winter lockdown plans.
Measures being considered are said to include curfews for pubs and restaurants and banning households from meeting up.
“With no confirmed vaccine for the coronavirus as autumn approaches, there is likely to be additional strain on government resources as they attempt to stave off a second wave, as the colder weather inevitably brings further cases to contend with,” said Richard Hunter, head of markets at Interactive Investor.
“Prospects for a sharp economic recovery have all but disappeared, as global growth receives the new threat of a resurgent pandemic.
“In addition, with talks for a further fiscal stimulus in the US seemingly in deadlock, investors have been choosing to vote with their feet over recent trading sessions given the deteriorating outlook.”
In equity markets, travel stocks took a beating amid worries about Covid restrictions, with British Airways and Iberia parent IAG sliding 11.97%.
InterContinental Hotels was off 4.76%, Premier Inn owner Whitbread lost 4.14%, cinema chain Cineworld slipped 7.76%, pub groups Wetherspoons and Mitchells & Butlers were 9.05% and 15.36% weaker, budget airline easyJet descended 8.23%, and cruise operator Carnival was in the red by 5.68%.
Rolls-Royce was 10.8% lower after the engine maker confirmed it is considering a potential £2.5bn fundraising.
Responding to media speculation over the weekend, the company said it was reviewing "all funding options" with the intention of strengthening its balance sheet.
HSBC was under pressure, closing down 5.26% following reports over the weekend that it was allowing money from a Ponzi scheme to be transferred around the world, according to leaked documents from the US Financial Crimes Enforcement Network (FinCEN).
Standard Chartered and Barclays were also implicated, with those stocks losing 5.82% and 5.4%, respectively.
“Whilst it is unclear to extent there will be a material impact on the banks in question, and whether the transactions are covered by existing Department of Justice deals and fines, it raises litigation and regulatory risk and we cannot rule out fines and charges being levied by various actors,” said Neil Wilson, chief market analyst at Markets.com.
“Either way, the stench of corruption and money laundering will linger over the largest banks for a long time.
“There were even reports HSBC may be added to China’s unreliable entity list.”
On the upside, Just Eat Takeaway gained 1.38% amid expectations that demand for the online food order and delivery service will increase amid tighter restrictions.
FTSE 100 - Risers
Tesco (TSCO) 225.50p 2.69%
Morrison (Wm) Supermarkets (MRW) 178.20p 2.27%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,504.00p 1.38%
Sainsbury (J) (SBRY) 196.75p 0.90%
B&M European Value Retail S.A. (DI) (BME) 459.10p 0.72%
Ocado Group (OCDO) 2,803.00p -0.50%
Spirax-Sarco Engineering (SPX) 10,625.00p -0.51%
Reckitt Benckiser Group (RB.) 7,340.00p -1.21%
Avast (AVST) 513.50p -1.44%
Admiral Group (ADM) 2,775.00p -1.53%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 97.20p -12.08%
Rolls-Royce Holdings (RR.) 160.70p -10.80%
Melrose Industries (MRO) 109.40p -8.83%
Persimmon (PSN) 2,317.00p -7.17%
Intermediate Capital Group (ICP) 1,164.00p -7.03%
Berkeley Group Holdings (The) (BKG) 4,159.00p -6.64%
Barratt Developments (BDEV) 443.40p -6.44%
Evraz (EVR) 326.50p -6.02%
WPP (WPP) 563.60p -6.00%
Legal & General Group (LGEN) 181.00p -6.00%
FTSE 250 - Risers
Royal Mail (RMG) 240.50p 1.61%
CLS Holdings (CLI) 208.00p 1.46%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,504.00p 1.38%
Avon Rubber (AVON) 4,230.00p 1.08%
Domino's Pizza Group (DOM) 345.40p 1.05%
FDM Group (Holdings) (FDM) 1,040.00p 0.97%
Telecom Plus (TEP) 1,334.00p 0.60%
Oxford Biomedica (OXB) 850.00p 0.48%
Oxford Instruments (OXIG) 1,576.00p 0.38%
SDL (SDL) 712.00p 0.28%
FTSE 250 - Fallers
Mitchells & Butlers (MAB) 119.00p -15.36%
Virgin Money UK (VMUK) 72.22p -15.33%
Paragon Banking Group (PAG) 306.20p -14.23%
FirstGroup (FGP) 37.48p -12.22%
Crest Nicholson Holdings (CRST) 167.80p -11.68%
Greencore Group (GNC) 97.80p -11.09%
Network International Holdings (NETW) 236.00p -11.01%
Redrow (RDW) 371.20p -10.47%
Trainline (TRN) 350.00p -10.26%
Petrofac Ltd. (PFC) 123.10p -9.75%