London stocks weighed down by travel, energy stocks

Published On: October 27, 2020Categories: Stocks & Shares1.5 min read

The FTSE 100 index dropped 1.2 per cent, while the FTSE 250 index declined 1.4 per cent

London stocks closed sharply lower yesterday, weighed by travel and energy stocks, while a resurgence in novel coronavirus cases stoked fears of a faltering economic recovery and dragged down European markets.

After rising nearly 0.1 per cent in morning trade, the blue-chip FTSE 100 index fell 1.2 per cent, led by declines in travel and leisure, personal goods makers, retailers and aero stocks.

Energy and mining weighed the most on the index due to weaker commodity prices.

The domestically focussed mid-cap FTSE 250 index lost 1.4 per cent even as European Union chief negotiator Michel Barnier and his team extended their London visit until tomorrow to try and clinch a Brexit trade deal.

European markets were weighed down by a plunge in tech major SAP, an impasse over the US stimulus package and fears that a resurgence in coronavirus cases could hamper a global economic recovery as governments tighten restrictions on businesses and social activity.

The fact that (more) countries are now reining in the freedom of people to move around is going to have a detrimental impact on the actual overall activity level in the economy, said Saxo Bank chief investment officer Steen Jakobsen. UK is even more challenged due to the Covid-19 close-down and Brexit.

After a stimulus-backed rally from pandemic lows, the FTSE 100 has been trading in tight ranges since June due to Brexit-related uncertainty and concerns over coronavirus curbs.

In a bright spot, AstraZeneca Plc rose 1.7 per cent after the drugmaker resumed the US trial of its experimental Covid-19 vaccine that is being developed with the University of Oxford, and said it produced a similar immune response in both older and younger adults.

The wider healthcare index added 1 per cent.

Educational publisher Pearson Plc added 3 per cent after UBS upgraded the stock to a “buy” rating.

Coca-Cola European Partners (CCEP) rose 0.3 per cent after the soft drink bottler made a buyout offer of US$6.6 billion for its Australian peer Coca-Cola Amatil Ltd.

About the Author: Jonathan Adams

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