FTSE 100 resists pull lower; but coronavirus second wave fears persist - Proactive Investors UK

The FTSE 100 defied the dour predictions of a sharply lower start to open the trading week in positive territory – though only just.

Even so, worries continue to persist over America’s handling of the coronavirus outbreak, while traders also have a weather eye on a potential second wave.

Caution was the watchword after the global death toll blew past 500,000 at the weekend and certain US states began to reassess lockdown restrictions.

“Monday’s markets are likely to be dominated by the same stories as second wave fears are not only isolated to the US,” said James Hughes of Scope Markets.

“The UK and Germany are also trying to fight off the prospect, with the UK looking imposing its first localised lockdown in Leicester as the infection rate grows.

“This will be key for the UK and for markets as the success of local lockdown will be key in fighting the virus long term and making sure the economy isn’t as hard as it has been for the last three months with a nationwide lockdown.”

After a weekend of rhetoric from both the unions and executives over a planned 12,000 job cuts, British Airways owner IAG (LON:IAG) appeared to gain the backing of investors as its shares topped the Footsie, albeit with a lukewarm 1.5% advance.

Among the fallers was Unilver (LON:ULVR), down 1.9%. The Anglo-Dutch consumer staples giant was one of a cadre of big brand owners to pull advertising from Facebook over growing concerns about hate speech and divisive content.

6.17 am: FTSE 100 set to open sharply lower 

The FTSE 100 looks set open sharply lower amid worries about a coronavirus second wave and the ability of the US to contain the outbreak.

Asia’s main markets set the tone as the global death toll from the pandemic hit half a million.

Worrying was the decision by certain American states to reconsider easing lockdown restrictions.

“Rising infection rates in the US, which saw some US states either postpone their reopening’s or close back down again, saw equity markets slide lower on the week on Friday, over concerns that any economic recovery may well take longer to take hold,” said Michael Hewson of CMC Markets.

“In spite of these concerns the losses that we saw turned out to be fairly modest when compared to previous sessions, as well as previous weeks.

“There is no question that some investors are calling into question the pace of any recovery in economic output, with gold prices hitting their highest levels since October 2012.

“However, the reality remains that while there is concern about the economic impact of a second lockdown, the bar to another countrywide one being implemented remains very high indeed.”

Gold, a haven investment in times of economic strife, found support at just under US$1,800 an ounce, while the price of crude oil eased amid worries that a faltering global economy will hit demand.

Looking ahead, it is expected to be a busy week for scheduled corporate news with updates expected from budget carrier easyJet (LON:EZJ), the supermarket chain Sainsbury (LON:SBRY) and Associated British Foods (LON:ABF), the owner of Primark.

Around the markets: Pound worth US$1.2368 (up 0.36%); gold changing hands for US$1,787.90 an ounce, up US$7.80; Brent crude US$40.15 a barrel, down 87 cents.                                  

Monday’s main news

Finals: Advanced Oncotherapy PLC (LON:AVO), Equals Group PLC (LON:EQLS), GB Group PLC (LON:GBG), Victoria Oil & Gas PLC (LON:VOG)

Business headlines 

Financial Times

• EY prepares for backlash over Wirecard scandal
• Lloyds to push further into wealth management and insurance
• Facebook fails to stem advertising boycott over hate speech
• Prices are rising faster than official figures suggest

Times

• London market left in shade as rivals zoom on
• Borrow big and spend, L&G chief Nigel Wilson tells Boris Johnson
• Fishing deal ‘must not limit UK access to Nordic waters’

Telegraph

• Britain headed for Brexit customs chaos
• Starbucks joins Facebook advertising boycott
• McCarthy & Stone boss: Stamp duty cuts would get the economy moving again

Guardian

• Chesapeake Energy, fracking pioneer, files for bankruptcy owing $9bn
• Red alert issued over Landsec executive's bumper pension package

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2020-06-29 07:45:52Z
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