London open: Stocks slide amid amid tightening Covid restrictions
London stocks slid in early trade on Wednesday amid growing concerns about the coronavirus pandemic, tightening restrictions across Europe and calls for another national lockdown in the UK.
At 0830 GMT, the FTSE 100 was down 1.9% at 5,619.85.
Investors were mulling over news that German Chancellor Angela Merkel wants all bars and restaurants to close for a month from 4 November to help slow the spread of Covid-19. If the measures are agreed, shops would be allowed to remain open, while restaurants would only be allowed to offer takeaways.
There were also reports that France is considering a month-long nationwide lockdown, with President Macron due to make an announcement later in the day.
On home shores, Boris Johnson was said to be under pressure for a second national lockdown after the UK recorded its highest Covid-19 death toll since May. According to reports, Sage analysis suggests that tier three, the highest level of restrictions, may be needed across all of England by mid-December.
CMC Markets analyst Michael Hewson said: "When equity markets dropped sharply back in February governments in Europe, the US and here in the UK stepped up with massive fiscal support, acting in conjunction with central banks to support their economies. This in turn prompted a strong rebound in equity markets as confidence that politicians would support businesses through what was likely to be a very tough period, helped fuel a rebound in sentiment.
"It is not immediately apparent that this fiscal support will be as significant at the second time of asking, hence the sharp slides we are now seeing in equity markets.
"Firstly, with a US election only a week away, there doesn’t appear to be any political will to deliver a new fiscal package much before the end of Q1 next year. As for the EU they haven’t even signed off their first fiscal package which is so badly needed by Italy and Spain, let alone put together a new one.
"Here in the UK the picture is no less clear with the UK government response resembling a type of economic hokey-cokey, one step in, one step out, as the end of furlough, prompts a number of U-turns as the economic outlook deteriorates."
In equity markets, property stocks British Land and Land Securities slumped amid fears of another lockdown. Hewson said investors will be worried "that more lockdowns will hollow out their real estate portfolios even further".
Travel and leisure stocks were also under the cosh, with British Airways owner IAG, InterContinental Hotels, Premier Inn owner Whitbread, Upper Crust owner SSP, pub chain Wetherspoons and travel company TUI all in the red.
Clothing retailer Next nudged higher as it lifted full-year profit guidance after a better-than-expected rise in third quarter sales. The company forecast a pre-tax profit of £365m, up £65m from a central scenario given in September.
Shares of Aston Martin Lagonda surged after Mercedes-Benz said it would be lifting its stake in the company to 20% over the next few years.
Kaz Minerals rallied after it agreed to be bought by Nova Resources in a deal that values the copper company at £3bn. Under the terms of the deal, Kaz shareholders will receive 640p a share in cash. This is a premium of around 12.1% to the closing share on Tuesday.
FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 78.34p 4.24%
Ocado Group (OCDO) 2,341.00p 1.25%
Next (NXT) 6,104.00p 0.23%
Croda International (CRDA) 6,390.00p 0.19%
Admiral Group (ADM) 2,759.00p 0.07%
Antofagasta (ANTO) 1,036.00p 0.00%
B&M European Value Retail S.A. (DI) (BME) 487.60p -0.06%
DCC (DCC) 5,118.00p -0.12%
Avast (AVST) 496.00p -0.24%
Fresnillo (FRES) 1,233.00p -0.24%
FTSE 100 - Fallers
British Land Company (BLND) 344.00p -5.75%
WPP (WPP) 597.20p -4.48%
International Consolidated Airlines Group SA (CDI) (IAG) 92.24p -4.28%
InterContinental Hotels Group (IHG) 3,770.00p -4.27%
Land Securities Group (LAND) 503.80p -4.26%
Prudential (PRU) 961.20p -3.93%
Whitbread (WTB) 2,114.00p -3.91%
Informa (INF) 431.00p -3.69%
Taylor Wimpey (TW.) 106.65p -3.62%
HSBC Holdings (HSBA) 318.75p -3.44%
FTSE 250 - Risers
Aston Martin Lagonda Global Holdings (AML) 62.00p 13.76%
Kaz Minerals (KAZ) 628.20p 10.06%
Convatec Group (CTEC) 194.50p 5.19%
XP Power Ltd. (DI) (XPP) 4,100.00p 1.49%
PureTech Health (PRTC) 255.50p 1.39%
Schroder Asia Pacific Fund (SDP) 549.00p 1.29%
AVI Global Trust (AGT) 748.00p 0.94%
Pershing Square Holdings Ltd NPV (PSH) 2,145.00p 0.70%
CMC Markets (CMCX) 318.50p 0.47%
Rathbone Brothers (RAT) 1,460.00p 0.41%
FTSE 250 - Fallers
Micro Focus International (MCRO) 230.70p -6.14%
Virgin Money UK (VMUK) 90.60p -5.31%
SSP Group (SSPG) 177.00p -5.25%
Wetherspoon (J.D.) (JDW) 867.00p -5.14%
Capita (CPI) 22.74p -5.13%
Babcock International Group (BAB) 220.70p -4.67%
TUI AG Reg Shs (DI) (TUI) 277.80p -4.60%
Meggitt (MGGT) 271.30p -4.47%
QinetiQ Group (QQ.) 244.20p -4.46%
Grafton Group Ut (GFTU) 665.00p -4.45%