London open: Stocks fall amid Covid worries; all eyes on Sunak
London stocks fell on Thursday amid ongoing concerns about rising Covid-19 infections and further restrictions, as investors awaited details of Chancellor Rishi Sunak’s new measures to replace the furlough scheme.
At 0825 BST, the FTSE 100 was down 1.1% at 5,835.69.
Sunak announced on Wednesday that the Autumn budget - which had been due to take place next month - has been cancelled. The Treasury said it wasn’t the time to be outlining long-term plans. Instead, Sunak is set to announce a new support package later in the day to replace the furlough scheme that finishes at the end of October.
CMC Markets analyst Michael Hewson said: "Details of the shape and scope of this new support scheme are expected to be announced later today, with speculation about wage subsidies and targeted aid on the more exposed sectors, in order to keep these businesses on life support, until some sort of normalisation."
Market participants were also eyeing a speech by Bank of England governor Andrew Bailey at a webinar hosted by the North East England Chamber of Commerce. Speaking on a BCC webinar on Tuesday, Bailey pretty much ruled out the use of negative interest rates in the near term.
In equity markets, engine maker Rolls-Royce and GKN owner Melrose Industries were under the cosh again amid concerns about the impact of Covid-19 on the airline industry.
British Airways and Iberia owner IAG, InterContinental Hotels and easyJet were also trading lower.
Elsewhere, Smiths Group was in the red after it posted a drop in annual profit but reinstated its dividend and said business was stabilising.
Harvester and All Bar One owner Mitchells & Butlers was also weaker after it said like-for-like sales had fallen 3.1% so far in its fiscal year as it warned of a "challenging and uncertain" future after the UK government imposed new Covid-19 restrictions on the hospitality industry.
Cineworld sank after saying it swung to a loss in the first half after its cinemas were forced to close in March due to the pandemic and warned it would need to raise additional liquidity if its cinemas were shut again.
On the upside, Pets at Home surged after saying full-year underlying pre-tax profit is set to be ahead of current market expectations of £73m as sales momentum returns across the business.
FTSE 100 - Risers
Vodafone Group (VOD) 104.80p 0.36%
United Utilities Group (UU.) 854.00p 0.31%
Severn Trent (SVT) 2,452.00p 0.00%
Intermediate Capital Group (ICP) 1,172.00p 0.00%
SSE (SSE) 1,183.50p -0.08%
National Grid (NG.) 848.80p -0.14%
GlaxoSmithKline (GSK) 1,490.00p -0.23%
Sainsbury (J) (SBRY) 201.50p -0.25%
Diageo (DGE) 2,505.00p -0.30%
Unilever (ULVR) 4,764.00p -0.31%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 153.85p -5.26%
Smiths Group (SMIN) 1,372.50p -4.16%
Hargreaves Lansdown (HL.) 1,549.00p -4.09%
International Consolidated Airlines Group SA (CDI) (IAG) 96.58p -4.00%
Melrose Industries (MRO) 107.55p -3.67%
Fresnillo (FRES) 1,162.50p -3.49%
Prudential (PRU) 1,075.50p -2.76%
M&G (MNG) 147.85p -2.70%
Scottish Mortgage Inv Trust (SMT) 950.00p -2.56%
InterContinental Hotels Group (IHG) 3,900.00p -2.52%
FTSE 250 - Risers
Morgan Sindall Group (MGNS) 1,192.00p 4.56%
Calisen (CLSN) 165.95p 3.69%
National Express Group (NEX) 126.50p 1.20%
Softcat (SCT) 1,219.00p 0.83%
IntegraFin Holding (IHP) 504.00p 0.80%
Indivior (INDV) 116.70p 0.78%
TBC Bank Group (TBCG) 1,006.00p 0.60%
Impax Environmental Markets (IEM) 347.50p 0.58%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,626.00p 0.37%
Oxford Biomedica (OXB) 843.00p 0.24%
FTSE 250 - Fallers
Aston Martin Lagonda Global Holdings (AML) 46.00p -10.77%
Mitchells & Butlers (MAB) 128.20p -5.74%
Wood Group (John) (WG.) 199.15p -4.44%
IG Group Holdings (IGG) 797.00p -4.26%
Premier Foods (PFD) 83.60p -4.24%
Weir Group (WEIR) 1,176.00p -3.92%
Ferrexpo (FXPO) 176.40p -3.82%
Micro Focus International (MCRO) 257.70p -3.77%
easyJet (EZJ) 487.50p -3.54%
WH Smith (SMWH) 945.00p -3.42%