London midday: Stocks turn lower as airlines lose ground
London stocks had turned lower by midday on Monday as initial enthusiasm over the easing of lockdown measures in the UK faded, while a poor showing in the airline sector weighed.
The FTSE 100 was down 0.3% at 5,916.69, giving up earlier gains after Prime Minister Boris Johnson outlined plans on Sunday night for a gradual easing of lockdown restrictions.
In what was criticised by many for being a vague and confused statement, the PM said those who cannot work from home were being actively encouraged" to go back to work. However, public transport was to be avoided if possible.
In addition, from Wednesday, there will be no restrictions on the amount of time people can spend exercising outdoors. Driving further afield for walks or days out will be permitted, along with sunbathing and playing sports with members of your household. Children could start going back to primary school from 1 June, Johnson said.
Despite the all the confusion over Johnson’s announcement, stocks kicked off the session in the black. However, the gains were short lived.
Oanda analyst Craig Erlam said the easing of lockdown measures will continue to be a tailwind for stock markets as those plans are implemented, assuming that it isn't swiftly followed by another spike in cases and risk of the changes being reversed.
"Fears of a second wave are already emerging in South Korea, China and maybe even Germany which should be a lesson to those countries preparing for looser restrictions. Of course, a rise in cases in unavoidable unless these restrictions remain in place until we have better testing, a vaccine and/or a cure. The scale is what is important and will be closely monitored.
"Perhaps it's second phase fears that's weighing a little on stock markets today, although it is a very quiet session in general and that's not expected to change with the ringing of the opening bell on Wall Street."
There wasn’t much in the way of corporate news.
Budget airline easyJet slid, closely followed by British Airways parent IAG, amid news the UK will impose a 14-day quarantine on travellers arriving in the country from June. Citi said in a note that the new quarantine rules might force easyJet into raising £700m to £1bn of capital via an equity issuance.
Diploma gained ground even as it pulled its interim dividend and said April revenue had slumped by more than a quarter amid the coronavirus crisis. The company said underlying revenues fell 28% last month as it reported a 4% rise in interim pre-tax profits to £41.6m.
Outside of the FTSE 350, Halfords shares jumped by a quarter after the government announced a series of measures to support cycling during and after the Covid-19 crisis.
Market Movers
FTSE 100 (UKX) 5,916.69 -0.32%
FTSE 250 (MCX) 16,263.26 0.09%
techMARK (TASX) 3,610.76 -0.20%
FTSE 100 - Risers
Johnson Matthey (JMAT) 2,025.00p 3.58%
Reckitt Benckiser Group (RB.) 6,850.00p 3.04%
Hargreaves Lansdown (HL.) 1,550.00p 2.99%
Auto Trader Group (AUTO) 493.40p 2.83%
Rightmove (RMV) 534.20p 2.57%
Pearson (PSON) 460.40p 2.40%
Ocado Group (OCDO) 1,908.50p 2.39%
Flutter Entertainment (FLTR) 9,974.00p 2.30%
Ferguson (FERG) 5,806.00p 1.86%
Scottish Mortgage Inv Trust (SMT) 696.00p 1.83%
FTSE 100 - Fallers
easyJet (EZJ) 486.80p -8.39%
Meggitt (MGGT) 238.80p -7.33%
Centrica (CNA) 37.52p -5.99%
Evraz (EVR) 255.00p -5.56%
JD Sports Fashion (JD.) 529.00p -4.55%
Intermediate Capital Group (ICP) 1,110.00p -4.06%
3i Group (III) 734.00p -4.05%
International Consolidated Airlines Group SA (CDI) (IAG) 182.90p -3.96%
Informa (INF) 436.90p -3.83%
Royal Bank of Scotland Group (RBS) 110.30p -3.33%
FTSE 250 - Risers
Petropavlovsk (POG) 27.10p 5.65%
Vivo Energy (VVO) 80.80p 5.62%
Airtel Africa (AAF) 40.15p 5.52%
XP Power Ltd. (DI) (XPP) 3,090.00p 5.10%
Spirent Communications (SPT) 267.00p 4.91%
PPHE Hotel Group Ltd (PPH) 1,190.00p 4.85%
PayPoint (PAY) 737.00p 4.84%
TalkTalk Telecom Group (TALK) 87.00p 4.76%
Coats Group (COA) 44.65p 4.57%
Cineworld Group (CINE) 62.74p 4.32%
FTSE 250 - Fallers
Micro Focus International (MCRO) 435.60p -8.66%
Hyve Group (HYVE) 17.18p -8.52%
Trainline (TRN) 353.80p -6.40%
Marks & Spencer Group (MKS) 89.06p -6.37%
Hammerson (HMSO) 50.32p -5.94%
WH Smith (SMWH) 944.50p -5.17%
Energean Oil & Gas (ENOG) 578.00p -4.93%
Investec (INVP) 151.65p -4.77%
Senior (SNR) 56.15p -4.75%
Network International Holdings (NETW) 384.60p -4.52%