London pre-open: Stocks to nudge lower as second lockdown looms
London stocks were set to nudge lower at the open on Monday as investors braced for a second national lockdown amid concerns of a double-dip recession, and eyed the latest UK manufacturing reading.
The FTSE 100 was called to open five points lower at 5,572, with England set for another lockdown as of Thursday.
CMC Markets analyst David Madden said: "Economic activity is likely to dip on account of the tighter restrictions, and that will probably be the theme of the markets in the near-term.
"The health crisis is ratcheting up in terms of new Covid-19 cases and hospitalisation rates, and there is a sense things are going to get worse before they get better. Medical experts where claiming since the beginning of the health crisis that the virus is likely to resurface in winter, but nonetheless, hear we are and dealers have been rattled by the situation."
Investors were also likely to be wary ahead of the US presidential election on Tuesday.
"Joe Biden, of the Democrats is performing better in the polls, but in key swing states, President Trump has eaten into Biden’s lead," said Madden. "It was reported there was a record level of early voting, and that underlines the intensity of the election."
On the data front, Markit’s manufacturing PMI for October is due at 0930 GMT.
In corporate news, Primark owner Associated British Foods said it expected to lose £375m in sales as new Covid-19 lockdowns across Europe forced the closure of its stores.
The company shuttered all shops in Republic of Ireland, France, Belgium, Wales, Catalonia in Spain and Slovenia representing 19% of its retail space. Lawmakers in England are set on Wednesday to vote on a one-month lockdown which would see 57% of the store estate closed.
“We are implementing the operational plans developed to manage the consequences of these closures and appropriate action will be taken to reduce operating costs. All orders placed with our suppliers will be honoured,” the company said in a statement.
Ocado increased its guidance for annual earnings to more than £60m from more than £40m as consumers switch to online shopping.
The company also agreed to buy Kindred Systems, a piece-picking robotics company, for about $262m and robotic arm designer Haddington Dynamics for $25m.