London open: Travel stocks pace the decline as Ryanair warns over second wave
London stocks were a little lower in early trade on Monday amid concerns about a second wave of coronavirus infections and souring relations between the US and China, as gold prices surged.
At 0850 BST, the FTSE 100 was down 0.5% at 6,094.75, with airline and travel-related stocks under pressure after Ryanair posted a €185m loss for the three months to June and said a second wave of Covid-19 cases across Europe in late autumn was its "biggest fear right now".
British Airways parent IAG, easyJet and Wizz Air were all trading lower, along with travel company TUI, cruise operator Carnival and InterContinental Hotels.
Sentiment was also hit by the UK's announcement that travellers returning from Spain will now have to quarantine for 14 days after officials there warned a second wave could be imminent. The UK government also said other countries were under review.
Spreadex analyst Connor Campbell said: "Though it has been on the up and up all year - save a sharp downturn in the first couple of weeks of March - gold has really accelerated in the last week. From Monday to Monday is has surged 6.5%, with a 1.7% increase this morning lifting it above $1930 per ounce for the first time in history.
"Interestingly despite the precious metal’s major gains, the European indices weren’t too panicked post-open. The FTSE fell half a percent, ducking back under 6100, with the CAC down 0.4%, and the DAX unchanged at 12850.
"The main issue was the situation between the US and China, with Beijing swift in taking back the premises of the American consulate in Chengdu, only a day or do after announcing its closure. This, of course, follows Washington shuttering the Chinese consulate in Houston. Technically, the superpowers are all-square in this specific tete-a-tete - but investors are worried about what comes next.
"And this is not to forget the small matter of Covid-19 - you may have heard of it - with China posting its highest daily increase in new cases since April. This comes on top of fresh hotspots in Australia, Vietnam and Hong Kong."
Elsewhere, engine maker Rolls-Royce was on the back foot following reports over the weekend that it is considering selling its ITP Aero division to private equity.
HSBC was in the red following a report it is under pressure to consider selling its US retail bank to boost returns and address international tensions with China.
On the upside, precious metals miners Polymetal, Fresnillo, Centamin and Hochschild all shone as gold and silver prices rallied.
FTSE 250 IT provider Kainos shot higher after it announced a special dividend and said annual profit and revenue will be ahead of consensus expectations as trading from 1 April to date has been strong despite the impact of Covid-19.
Cairn Energy was also in the black as it agreed the sale of its Senegal assets to Lukoil for $400m in cash and announced plans for a special dividend of at least $250m.
Market Movers
FTSE 100 (UKX) 6,094.75 -0.47%
FTSE 250 (MCX) 17,191.22 -0.43%
techMARK (TASX) 3,738.27 -0.59%
FTSE 100 - Risers
Polymetal International (POLY) 1,921.00p 6.43%
Fresnillo (FRES) 1,242.50p 4.28%
Antofagasta (ANTO) 1,053.50p 2.38%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,292.00p 1.54%
Kingfisher (KGF) 252.10p 1.53%
Berkeley Group Holdings (The) (BKG) 4,516.00p 1.44%
Glencore (GLEN) 184.68p 1.03%
Severn Trent (SVT) 2,446.00p 0.99%
Admiral Group (ADM) 2,369.00p 0.98%
National Grid (NG.) 910.80p 0.86%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 179.50p -9.62%
Rolls-Royce Holdings (RR.) 254.70p -5.00%
Melrose Industries (MRO) 100.10p -4.07%
Pearson (PSON) 526.80p -3.27%
InterContinental Hotels Group (IHG) 3,647.00p -3.21%
Vodafone Group (VOD) 118.52p -2.98%
HSBC Holdings (HSBA) 354.25p -2.91%
Ocado Group (OCDO) 2,024.00p -2.83%
Burberry Group (BRBY) 1,274.00p -2.64%
BT Group (BT.A) 109.95p -2.14%
FTSE 250 - Risers
Kainos Group (KNOS) 949.00p 14.75%
Cairn Energy (CNE) 133.50p 7.23%
Hochschild Mining (HOC) 283.60p 5.58%
Centamin (DI) (CEY) 209.00p 5.26%
Petropavlovsk (POG) 41.10p 4.05%
Watches of Switzerland Group (WOSG) 289.00p 2.85%
IG Group Holdings (IGG) 766.00p 2.75%
Ferrexpo (FXPO) 189.40p 2.71%
Kaz Minerals (KAZ) 554.60p 2.25%
Helios Towers (HTWS) 155.20p 2.11%
FTSE 250 - Fallers
TUI AG Reg Shs (DI) (TUI) 290.10p -14.58%
easyJet (EZJ) 509.20p -13.55%
Carnival (CCL) 885.00p -7.17%
Wizz Air Holdings (WIZZ) 3,312.00p -4.11%
Aston Martin Lagonda Global Holdings (AML) 47.50p -4.04%
Cineworld Group (CINE) 43.65p -3.96%
SSP Group (SSPG) 228.20p -3.88%
Micro Focus International (MCRO) 290.00p -3.85%
Savills (SVS) 718.00p -3.30%
Trainline (TRN) 392.20p -3.16%