London close: Stocks turn positive in late trading
London equity markets finished in positive territory on Friday, managing to break above the waterline in late trading after worries about rising Covid-19 cases and further restrictions knocked sentiment earlier in the session.
The FTSE 100 closed up 0.34% at 5,842.67, and the FTSE 250 was 1.44% firmer at 17,044.12.
Sterling was trading mixed against its major trading pairs, last falling 0.39% on the dollar to $1.2697, while strengthening 0.09% against the euro to €1.0929.
“The FTSE 100 is holding up alright in comparison with its eurozone equivalents, and this is because the British market underperformed yesterday, when the Winter Economic Plan was announced,” said CMC Markets analyst David Madden.
“Rishi Sunak, the Chancellor of the Exchequer, mapped out plans to encourage employers to keep on furloughed workers but he cautioned that some businesses will go bust and there will be a jump in the jobless rate.
“It seems that the UK got its bad news out of the way yesterday.”
Investors were digesting the latest figures from the Office for National Statistics, which showed the government borrowed £35.9bn in August - the third highest monthly figure on record - as tax revenue fell and it spent to deal with the economic effects of the Covid-19 crisis.
August's net borrowing figure was a record for the month and £30.5bn more than a year earlier.
But the total was less than in March and April as the economy picked up and some workers returned to work from furlough. It was also less than the average economists' forecast of £38bn.
"The government borrowed another huge sum in August as it continued to absorb much of the cost of the Covid-19 crisis," said Capital Economics UK economist Andrew Wishart.
"But while the chancellor announced some modest further support yesterday, the big picture is that fiscal support will fade over the autumn causing many more job losses to be realised.
"After an impressive rebound in Q3, we think the resurgence of the virus and new restrictions will cause GDP to stagnate for the rest of this year, hurting tax revenues."
In equity markets, British Airways and Iberia parent IAG was off 9.13% amid concerns about the impact of the coronavirus and related restrictions on the airline industry, while engine maker Rolls-Royce reversed earlier losses to close up 3.1%.
Budget airline easyJet was off 0.47%, InterContinental Hotels lost 0.91% and Upper Crust owner SSP was 0.72% weaker on similar worries.
Aviva and Vodafone were in focus on the back of deal news, with the former rising 0.32% and the latter falling 0.04%.
Reuters reported that a consortium of Germany’s Allianz and life insurer Athora Holdings was in talks to buy the French operations of the London-listed insurer.
It cited sources as saying the deal could be worth between €2bn and €3bn.
Meanwhile, Spain’s El Economista suggested that Vodafone had started talks to buy Spanish rival MasMovil with the three buyout funds that recently took it over.
Pennon was 1.68% higher after saying it was on track to report first-half results in line with its own expectations and was considering the best use of funds from the sale of its waste management business.
West End landlord Shaftesbury closed up 3.47% even after it scrapped its final dividend and said almost half of rents due for the second half had been waived or were still due amid the Covid-19 crisis.
FTSE 100 - Risers
GVC Holdings (GVC) 999.60p 16.83%
Flutter Entertainment (FLTR) 12,680.00p 6.82%
Avast (AVST) 546.00p 3.80%
Rolls-Royce Holdings (RR.) 155.35p 3.50%
M&G (MNG) 151.25p 3.49%
Homeserve (HSV) 1,260.00p 2.94%
Pearson (PSON) 552.20p 2.91%
B&M European Value Retail S.A. (DI) (BME) 487.50p 2.42%
JD Sports Fashion (JD.) 802.60p 2.40%
United Utilities Group (UU.) 872.00p 2.30%
FTSE 100 - Fallers
Standard Chartered (STAN) 336.80p -2.66%
Sainsbury (J) (SBRY) 197.25p -2.40%
Admiral Group (ADM) 2,676.00p -2.23%
Smiths Group (SMIN) 1,296.50p -2.11%
Rio Tinto (RIO) 4,718.50p -1.95%
Next (NXT) 5,918.00p -1.60%
Barclays (BARC) 91.55p -1.42%
Tesco (TSCO) 216.00p -1.41%
BT Group (BT.A) 98.94p -1.31%
Johnson Matthey (JMAT) 2,283.00p -1.17%
FTSE 250 - Risers
William Hill (WMH) 312.20p 43.47%
Cairn Energy (CNE) 141.70p 12.82%
888 Holdings (888) 206.50p 11.62%
Ascential (ASCL) 298.40p 11.18%
Network International Holdings (NETW) 290.00p 7.25%
PZ Cussons (PZC) 229.00p 6.76%
John Laing Group (JLG) 313.80p 5.66%
Morgan Sindall Group (MGNS) 1,148.00p 5.51%
Calisen (CLSN) 169.00p 5.46%
Coats Group (COA) 53.30p 4.92%
FTSE 250 - Fallers
Sirius Real Estate Ltd. (SRE) 72.30p -5.37%
Petrofac Ltd. (PFC) 106.50p -3.53%
Marks & Spencer Group (MKS) 94.00p -3.31%
Close Brothers Group (CBG) 943.00p -3.28%
Fisher (James) & Sons (FSJ) 1,140.00p -3.23%
Micro Focus International (MCRO) 246.30p -2.88%
Diversified Gas & Oil (DGOC) 103.80p -2.63%
WH Smith (SMWH) 948.50p -2.47%
XP Power Ltd. (DI) (XPP) 4,370.00p -2.46%
Workspace Group (WKP) 482.40p -2.23%