London midday: Stocks maintain losses on Fed outlook, Covid worries

London equity markets were still firmly in the red by midday on Thursday after a gloomy economic outlook from the US Federal Reserve and amid concerns about rising coronavirus cases, with ex-dividend stocks pacing the decline.

The FTSE 100 was down 1.1% at 6,043.53 as investors mulled the latest Federal Open Market Committee minutes released overnight.

Spreadex analyst Connor Campbell said: "The Fed meeting minutes from Wednesday night sort of did a number on the markets, both warning that the pandemic would ‘weight heavily on economic activity, employment, and inflation in the near term’ as well as posing risks to the outlook ‘over the medium term’, while also stating that the FOMC felt new stimulus measures were ‘not warranted in the current environment’.

"With hopes dashed of a Fed intervention in the short term, the latest covid-19 headlines carried an extra sting. Germany has just posted its highest number of new cases since April, Croatia may be the next country to be removed from the UK’s travel corridor, Australia’s Qantas airline has warned travel to the US is likely not possible until there is a vaccine, and South Korea is in danger of seeing a return to a nationwide outbreak after recording more than 1500 cases in the last week.

"That’s a lot of bad news for investors to deal with, and they reacted as you’d expected."

Meanwhile, Sino-US trade relations were in focus again after a Chinese Commerce Ministry official said talks between the two will be held soon. According to reports, the unnamed official said the countries had decided to hold the talks - which were postponed last week - in the coming days, although no further details were given.

In equity markets, ex-dividends were a drag, with M&G, Evraz, Standard Life, Mondi, Anglo American, Berkeley Group, Imperial Brands, Plus500 and Drax all in the frame.

Antofagasta was weaker after the Chilean copper miner posted a 22.4% fall in first-half earnings on weaker prices and sales but still paid a reduced dividend.

On the upside, Frasers Group, formerly Sports Direct, gained after saying it plans to spend £100m on its digital elevation strategy and forecasting a 10-30% improvement in underlying core earnings next year as 2020 profits fell by a fifth due to the Covid-19 pandemic.

AO World surged as the online electrical goods retailer reported strong sales growth for the four months to the end of July as it continues to benefit from increased online shopping despite the reopening of stores since the easing of lockdown measures.

Market Movers

FTSE 100 (UKX) 6,043.53 -1.12%
FTSE 250 (MCX) 17,530.14 -0.30%
techMARK (TASX) 3,809.86 -0.53%

FTSE 100 - Risers

Land Securities Group (LAND) 556.80p 1.61%
SEGRO (SGRO) 959.40p 1.57%
British Land Company (BLND) 355.40p 1.54%
Ocado Group (OCDO) 2,418.00p 1.26%
SSE (SSE) 1,304.50p 0.73%
InterContinental Hotels Group (IHG) 4,024.00p 0.70%
Rightmove (RMV) 616.60p 0.69%
Homeserve (HSV) 1,328.00p 0.30%
National Grid (NG.) 874.80p 0.21%
Sage Group (SGE) 740.40p 0.14%

FTSE 100 - Fallers

M&G (MNG) 169.90p -5.61%
Standard Life Aberdeen (SLA) 249.10p -5.39%
Antofagasta (ANTO) 1,087.50p -5.31%
Evraz (EVR) 328.10p -5.12%
Mondi (MNDI) 1,459.00p -4.83%
Smith (DS) (SMDS) 270.80p -4.75%
International Consolidated Airlines Group SA (CDI) (IAG) 192.35p -4.30%
Melrose Industries (MRO) 100.55p -3.69%
Anglo American (AAL) 1,874.80p -3.63%
Glencore (GLEN) 170.40p -3.25%

FTSE 250 - Risers

Frasers Group (FRAS) 346.40p 13.28%
Workspace Group (WKP) 559.50p 5.27%
IntegraFin Holding (IHP) 575.00p 4.55%
Derwent London (DLN) 2,878.00p 4.05%
Chemring Group (CHG) 244.00p 3.83%
AO World (AO.) 200.00p 3.52%
PPHE Hotel Group Ltd (PPH) 1,080.00p 2.86%
4Imprint Group (FOUR) 2,160.00p 2.86%
Shaftesbury (SHB) 498.40p 2.85%
Rathbone Brothers (RAT) 1,712.00p 2.76%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 58.50p -7.95%
John Laing Group (JLG) 283.60p -6.77%
TI Fluid Systems (TIFS) 176.20p -4.86%
Capita (CPI) 31.50p -4.63%
Hochschild Mining (HOC) 243.60p -4.47%
FirstGroup (FGP) 37.84p -4.20%
Rotork (ROR) 305.00p -3.79%
Drax Group (DRX) 274.00p -3.52%
Hammerson (HMSO) 50.18p -3.50%
Ferrexpo (FXPO) 193.10p -3.45%