London close: Benchmark finishes negative amid second wave virus fears

London stocks finished below the waterline on Monday amid worries about a second wave of coronavirus infections, as non-essential shops in the UK opened their doors for the first time in nearly three months.

The FTSE 100 ended the session off its earlier lows but still down 0.66% at 6,064.70, while the FTSE 250 managed to turn positive in late trading, closing up 0.07% at 17,089.17.

Sterling was stronger against both of its major trading pairs, last rising 0.21% against the dollar to $1.2566, and advancing 0.07% on the euro to €1.1150.

“While still deep in the red, indices have managed to rally off their lows, although there is still much work to be done to recover the ground lost in the second half of last week,” said Chris Beauchamp, chief market analyst at IG.

“Coronavirus cases are on the rise in the US and China, and market anxiety has been compounded by the desire in parts of the US government to avoid a second lockdown and a miserable set of Chinese data points overnight.

“The blunt truth is that this rally was looking very long in the tooth - since April the gains have been relentless, and while investors made hay over the past few weeks there has to be some kind of reckoning.”

Beauchamp said that if this was a real flight to safety, and not just a volatile shakeout of equity market complacency, then market watchers would be expecting gold and silver to be more in demand than appeared to be the case.

“This lack of enthusiasm for precious metals has meant that Fresnillo sits at the bottom of the FTSE 100.

“Normally gold and silver are big winners as investors move away from risk assets, so perhaps this sends a signal that weakness in equities will only be short-lived.”

Investors were also mulling the latest data out of China, which showed that fixed asset investment fell 6.3% in May versus consensus estimates for a 5.9% decline and a 10.3% drop in April.

Industrial production rose 4.4%, up from a 3.9% rise the month before but below consensus expectations for a 5% increase.

Retail sales fell 2.8% in May, which was an improvement on the 7.5% slump seen the month before and better than expectations of a 2% rise.

In equity markets, oil giant BP slid 2.18% as it said it expects to take between $13bn and $17.5bn in impairment charges and exploration write-offs in the second quarter, after it cut long term oil and gas price assumptions based on the likely enduring impact of Covid-19 and weaker demand for a sustained period.

BP’s revised long-term price assumptions were now an average of around $55 per barrel for Brent and $2.90 per million British thermal units for Henry Hub gas between 2021 and 2050.

Precious metals miners Fresnillo, Polymetal and Hochschild Mining all lost their shine as gold prices retreated, falling 5.87%, 3.7% and 2.27% respectively.

Miners were also in the red, with BHP down 3.26%, Glencore off 3.11% and Anglo American 2.86% weaker.

Mike Ashley’s Frasers Group, formerly Sports Direct, ended the session 1.55% lower after announcing late on Friday that it had taken a 5.1% stake in luxury fashion brand Hugo Boss through stocks and derivatives.

On the upside, international distribution group Bunzl surged 9.82% after saying it planned to repay employee-related government support packages and bring forward the settlement of tax deferrals, as increased deliveries of food and medical products during the coronavirus pandemic drove higher first half revenues.

The company said revenue was expected to increase by approximately 6% at both actual and constant exchange rates.

Elsewhere, equipment rental firm Ashtead closed 2.37% higher ahead of its final results on Tuesday.

Market Movers

FTSE 100 (UKX) 6,064.70 -0.66%
FTSE 250 (MCX) 17,089.17 0.07%
techMARK (TASX) 3,670.21 0.16%

FTSE 100 - Risers

Bunzl (BNZL) 2,069.00p 9.82%
M&G (MNG) 158.70p 4.75%
Ashtead Group (AHT) 2,417.00p 2.37%
Hikma Pharmaceuticals (HIK) 2,359.00p 2.34%
Legal & General Group (LGEN) 230.00p 1.95%
Meggitt (MGGT) 294.20p 1.45%
Spirax-Sarco Engineering (SPX) 9,652.00p 1.32%
Smurfit Kappa Group (SKG) 2,492.00p 1.30%
Rentokil Initial (RTO) 484.50p 1.17%
United Utilities Group (UU.) 911.80p 1.09%

FTSE 100 - Fallers

Fresnillo (FRES) 747.60p -5.87%
Barratt Developments (BDEV) 499.20p -5.06%
easyJet (EZJ) 765.60p -4.89%
International Consolidated Airlines Group SA (CDI) (IAG) 264.70p -3.92%
Polymetal International (POLY) 1,468.50p -3.70%
Taylor Wimpey (TW.) 146.10p -3.56%
Compass Group (CPG) 1,110.00p -3.48%
Berkeley Group Holdings (The) (BKG) 4,040.00p -3.37%
BHP Group (BHP) 1,613.00p -3.26%
Anglo American (AAL) 1,773.00p -2.86%

FTSE 250 - Risers

Helios Towers (HTWS) 175.00p 9.37%
Drax Group (DRX) 227.00p 6.87%
Just Group (JUST) 59.75p 5.66%
Provident Financial (PFG) 203.00p 4.86%
QinetiQ Group (QQ.) 302.00p 3.85%
Jupiter Fund Management (JUP) 245.00p 3.63%
LondonMetric Property (LMP) 213.00p 3.09%
Bank of Georgia Group (BGEO) 1,082.00p 3.05%
Softcat (SCT) 1,063.00p 3.00%
AJ Bell (AJB) 394.50p 3.00%

FTSE 250 - Fallers

TalkTalk Telecom Group (TALK) 87.05p -7.39%
Forterra (FORT) 205.00p -4.65%
Hyve Group (HYVE) 115.70p -4.14%
Crest Nicholson Holdings (CRST) 253.80p -4.08%
Ferrexpo (FXPO) 185.00p -3.90%
Vistry Group (VTY) 740.00p -3.90%
Essentra (ESNT) 292.00p -3.63%
PureTech Health (PRTC) 240.50p -3.42%
Redrow (RDW) 468.80p -3.34%
BMO Commercial Property Trust Limited (BCPT) 73.00p -3.31%