London close: Stocks mixed as Johnson outlines local lockdowns
London stocks were mixed at the close on Monday, as sentiment took a slide after the Prime Minister outlined tighter lockdown restrictions in some parts of England.
The FTSE 100 ended the session down 0.25% at 6,001.38, while the FTSE 250 was 0.52% firmer at 18,167.71.
Sterling was stronger against both of its major trading pairs, last rising 0.25% on the dollar to $1.3068, and advancing 0.36% against the euro to €1.1067.
The lacklustre trading session came as Prime Minister Boris Johnson outlined a new three-tier alert system for England, which would divide regions up as being on ‘medium’, ‘high’ or ‘very high’ alert.
Johnson announced the changes in the Commons during the afternoon, and was set to hold a press conference at 1800 BST.
“More lockdowns around the globe could also hit economic growth, and oil prices have been weakening today as a result of this,” said IG chief market analyst Chris Beauchamp.
“The bounce from the lows of early October seems to have run its course, as the impact of production cuts fades and the focus shifts to the macro picture once more.
“Despite improvement in Asia, the great Western consumers of oil are struggling to get the virus under control, raising fears that demand may once again fall off a cliff in a similar manner to February and March.”
Market participants were also mulling news that the Bank of England has asked high street lenders to detail how prepared they are for negative interest rates.
“It is understood the Bank of England has instructed British banks to be ready for sub-zero-rates, but that doesn’t necessarily mean that the agenda will be implemented, but it is prudent to be prepared,” said CMC Markets analyst David Madden.
“The logic behind negative rates is that people will be encouraged to borrow more, and in turn spend more, but the base rate has been barely above zero since the pandemic set in, and that hasn’t sparked a jump in lending.
“If anything, because of the health crisis people in the UK have been largely paying down debt in recent months.”
Madden said banks were under pressure because of the pandemic, as the lower interest rate environment and the prospect of a jump in bad debts in the quarters ahead were hanging over the sector.
“Should the Bank of England go down the route of negative rates, that is likely to put more pressure on the already struggling industry.”
In corporate news, Aveva lost 2.55% as the industrial software group said first-half revenue would be broadly in line with expectations and maintained full-year guidance.
Gambling group GVC was also in the red, by 2.34%, as it said it would take a £40m profits hit after being awarded four licences to operate in Germany.
IAG was 1.69% lower as it replaced Alex Cruz as chief executive of British Airways with Aer Lingus's Sean Doyle in a shake-up under the group's new boss Luis Gallego.
As tighter Covid restrictions loomed, fashion retailer Next was down 3.81%, Premier Inn owner Whitbread lost 3.75%, cinema chain Cineworld was off 0.27%, and travel company TUI fell 5.56%.
On the upside, Sanne was ahead 8.65% and Hochschild Mining added 3.39%, both on the back of upgrades to ‘outperform’ at RBC Capital Markets.
FTSE 100 - Risers
Scottish Mortgage Inv Trust (SMT) 1,056.00p 3.13%
Smith (DS) (SMDS) 313.80p 2.82%
Ocado Group (OCDO) 2,443.00p 2.56%
SSE (SSE) 1,325.50p 2.31%
Intermediate Capital Group (ICP) 1,394.00p 2.20%
Severn Trent (SVT) 2,528.00p 2.10%
Smurfit Kappa Group (SKG) 3,224.00p 2.09%
Mondi (MNDI) 1,684.00p 1.93%
United Utilities Group (UU.) 902.60p 1.76%
Schroders (SDR) 2,842.00p 1.68%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 194.85p -12.70%
Next (NXT) 6,212.00p -3.81%
Whitbread (WTB) 2,307.00p -3.75%
Smiths Group (SMIN) 1,399.00p -3.02%
Aveva Group (AVV) 4,615.00p -2.55%
Royal Dutch Shell 'A' (RDSA) 990.50p -2.55%
Compass Group (CPG) 1,223.50p -2.47%
GVC Holdings (GVC) 1,065.00p -2.34%
Royal Dutch Shell 'B' (RDSB) 956.80p -2.26%
BP (BP.) 217.75p -1.96%
FTSE 250 - Risers
Sanne Group (SNN) 682.00p 8.65%
SDL (SDL) 758.00p 8.29%
Virgin Money UK (VMUK) 89.56p 5.54%
Beazley (BEZ) 345.40p 5.37%
TI Fluid Systems (TIFS) 180.16p 4.73%
Henderson Smaller Companies Inv Trust (HSL) 856.00p 4.14%
Pagegroup (PAGE) 416.00p 4.00%
Kaz Minerals (KAZ) 550.00p 3.73%
Herald Investment Trust (HRI) 1,832.00p 3.49%
Man Group (EMG) 120.95p 3.46%
FTSE 250 - Fallers
TUI AG Reg Shs (DI) (TUI) 292.20p -5.56%
SSP Group (SSPG) 197.10p -5.41%
Carnival (CCL) 990.20p -4.93%
Mitchells & Butlers (MAB) 140.80p -4.48%
National Express Group (NEX) 167.20p -4.40%
Energean (ENOG) 551.00p -4.39%
Petropavlovsk (POG) 30.15p -3.98%
Network International Holdings (NETW) 305.00p -3.91%
Wood Group (John) (WG.) 214.30p -3.44%
Ferrexpo (FXPO) 172.90p -3.35%