London close: Travel stocks pace the decline on UK quarantine changes
London stocks closed firmly in the red on Friday, with travel shares under pressure as the UK added more countries to its quarantine list, while disappointing data out of China and deadlocked US stimulus talks also weighed.
The FTSE 100 ended down 1.6% at 6,090.04.
Data released earlier by China’s National Bureau of Statistics showed retail sales fell 1.1% on the year in July, which was an improvement on the 1.8% drop in June but missed expectations of a 0.1% increase. This marked the seven month in a row that sales have fallen.
Meanwhile, industrial output rose 4.8% on the year in July, matching June’s expansion rate and coming in below expectations of a 5.1% jump.
CMC Markets analyst Michael Hewson said the latest retail sales and industrial production numbers from China "continue to point to a weak recovery in the region".
"Retail sales growth in China hasn’t been the same since the country came out of lockdown at the end of February, though optimism over the July numbers had been increasing given recent positive data from the auto sector in July, as well as reports from the likes of Daimler, and Apple talking of some decent rebounds in their Chinese markets."
He said the decline in retail sales shows the Chinese consumer remains "quite nervous about coming out of hibernation".
Trade issues were still very much in focus, with officials from the US and China due to meet on Saturday for a review of their deal.
"At the same time, markets will be keeping an eye on whether the stalemate surrounding the next round of US fiscal stimulus can be broken, even though the better-than-expected readings on the US economy could buy Congress more time," said Han Tan, market analyst at FXTM.
There was a dearth of corporate news, but travel-related stocks were under the cosh after the UK government added more countries to its 14-day quarantine list, including France, the Netherlands, Malta and Monaco.
British Airways and Iberia parent IAG, budget airline easyJet, travel company TUI, engine maker Rolls-Royce, GKN owner Melrose Industries, WH Smith, InterContinental Hotels and Premier Inn owner Whitbread were all trading lower.
Russ Mould, investment director at AJ Bell, said: "This decision will feel particularly painful as it comes at the height of the UK holiday season and the question now becomes just how long the likes of easyJet, Ryanair and British Airways-owner International Consolidated Airlines can continue under these conditions.
"It appears summer 2020 will be something of a write off, the industry cannot afford for the same to be true in 12 months.
"And yet until there is a vaccine, the recovery from the coronavirus is likely to be patchy with the risk of travel restrictions between countries when there are localised flare ups."
Elsewhere, Domino’s Pizza was dented by a downgrade to ‘sell’ at Citi.
On the upside, gambling company Rank Group gained, with casinos due to reopen on Saturday as restrictions in England are eased further.
FTSE 100 - Risers
Smurfit Kappa Group (SKG) 2,742.00p 1.56%
NATWEST GROUP PLC ORD 100P (NWG) 115.90p 1.00%
Barclays (BARC) 109.14p 0.98%
Taylor Wimpey (TW.) 120.60p 0.92%
Persimmon (PSN) 2,534.00p 0.80%
Barratt Developments (BDEV) 512.80p 0.39%
Land Securities Group (LAND) 570.00p 0.39%
Next (NXT) 5,918.00p 0.27%
Berkeley Group Holdings (The) (BKG) 4,595.00p 0.26%
Phoenix Group Holdings (PHNX) 694.40p 0.23%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 194.55p -4.82%
Avast (AVST) 556.50p -4.13%
Aveva Group (AVV) 4,373.00p -4.00%
GVC Holdings (GVC) 769.80p -3.78%
Rolls-Royce Holdings (RR.) 258.20p -3.55%
Melrose Industries (MRO) 102.75p -3.39%
Fresnillo (FRES) 1,218.00p -3.22%
Whitbread (WTB) 2,446.00p -3.21%
Auto Trader Group (AUTO) 556.60p -2.96%
Glencore (GLEN) 170.92p -2.96%
FTSE 250 - Risers
Oxford Instruments (OXIG) 1,580.00p 4.64%
CLS Holdings (CLI) 215.50p 4.11%
BMO Commercial Property Trust Limited (BCPT) 69.50p 3.73%
Pollen Street Secured Lending (PSSL) 820.00p 3.02%
National Express Group (NEX) 151.10p 2.44%
Big Yellow Group (BYG) 1,042.00p 2.06%
OneSavings Bank (OSB) 272.60p 1.94%
Pershing Square Holdings Ltd NPV (PSH) 1,910.00p 1.60%
Go-Ahead Group (GOG) 660.00p 1.54%
Hill & Smith Holdings (HILS) 1,338.00p 1.36%
FTSE 250 - Fallers
TUI AG Reg Shs (DI) (TUI) 315.60p -8.44%
easyJet (EZJ) 566.40p -7.27%
Greencore Group (GNC) 120.50p -6.44%
Just Group (JUST) 51.80p -5.82%
Petrofac Ltd. (PFC) 177.25p -5.72%
Balfour Beatty (BBY) 231.20p -5.63%
Domino's Pizza Group (DOM) 338.40p -5.37%
Coats Group (COA) 54.80p -5.35%
Watches of Switzerland Group (WOSG) 310.00p -4.47%
Sanne Group (SNN) 654.00p -4.25%