London stocks steady amid pandemic, Sino-US tensions

Published On: July 24, 2020Categories: Stocks & Shares2.3 min read

London stocks were set for a steady open amid concerns about a rise in US coronavirus cases and escalating tensions between the US and China, as hopes of a Brexit trade deal faded

London stocks were set for a steady open on Thursday amid ongoing concerns about a rise in US coronavirus cases and escalating tensions between the US and China, as hopes of a Brexit trade deal faded.

The FTSE 100 was called to open unchanged at 6,207.

CMC Markets analyst Michael Hewson said: European markets slipped back yesterday, dragged lower on a combination of concerns over rising coronavirus infection and death rates in the US, as well as worries over an escalation in tensions between the US and China after the US ordered the closure of the Chinese consulate in Houston Texas, prompting fears over possible retaliation.

This morning it was being reported by the South China Morning Post that China would be closing the US consulate in Chengdu in response, which if true seems a fairly measured response, Michael said.

Talk that the UK was close to abandoning any hope of arriving at an EU trade deal by the end of the year didn’t help either, with the pound also slipping back against the euro. The self-imposed UK government deadline for outlining a bare bones deal comes up at the end of this month, with little indication that either side is close to agreement on any of the key issues, and no new meetings scheduled beyond the current round of talks, which are due to finish today, he said.

On the data front, the CBI industrial trends survey is at 1100 BST.

In corporate news, financial services firm AJ Bell reported a 12% rise in assets under administration (AUA) to £54.3bn during the third quarter as it maintained full year guidance and announced a move into the retail cash savings market.

The company said underlying net inflows, representing organic growth in the quarter, increased by 30% over the prior year to £1.3bn.

AJ Bell said it would start offering customers the option to apply for multiple savings accounts with no paperwork, and manage their cash savings via one online account.

Unilever reported a lower-than-expected fall in second-quarter sales as strong growth in North America helped to offset the impact of coronavirus lockdowns.

The company said underlying sales fell 0.3% in the three months to June 30. Analysts had been expecting a 4.3% decrease.

Unilever said first-half food service sales slumped by almost 40% and out of home ice-cream by nearly 30%. This was offset by a 49% rise in e-commerce sales, while North America reported growth of 7.3%.

Polymetal reported gold equivalent production of 358,000 ounces for the second quarter on Thursday, up 2% year-on-year, which it said was driven by a strong performance at Kyzyl, offsetting the planned decline at Svetloye.

The company said it generated “significant” free cash flow in the, with net debt largely unchanged relative to the first quarter at $1.69bn, while it paid $197m of final dividends for the 2019 financial year.

It confirmed its full-year 2020 production guidance of 1.5 million ounces of gold equivalent.

About the Author: Jonathan Adams

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