London midday: Stocks pare losses as gold rally boosts precious metals miners

London stocks were off earlier lows by midday on Monday as a strong showing from precious metals miners helped to offset weakness in the travel sector, after Ryanair warned over a second wave of coronavirus infections.

The FTSE 100 was down 0.2% at 6,114.40.

A surge in gold prices, which lifted the likes of Polymetal, Fresnillo, Hochschild and Centamin, helped the index to pare earlier losses. The yellow metal rose 1.6% to a fresh all-time high of $1,943.00 an ounce amid concerns about the pandemic and escalating tensions between the US and China. Gold’s previous record high was $1,920.30, reached in September 2011.

Sino-US relations soured further as China said it had taken over the premises of the US consulate in Chengdu after announcing its closure in retaliation for being kicked out of the Chinese consulate in Houston, Texas.

Meanwhile, concerns about a second wave of Covid-19 also boosted gold after the UK government decided to re-impose a 14-day quarantine on travellers returning from Spain. In addition, China posted its highest daily rise in new cases since April, while Australia's Victoria state reported the country’s highest daily increase in infections, with authorities there warning that a six-week lockdown may need to be extended.

Travel-related stocks were under pressure after Ryanair posted a €185m loss for the three months to June and said a second wave of Covid cases across Europe in late autumn was its "biggest fear right now".

British Airways parent IAG, easyJet and Wizz Air were all lower, along with travel company TUI, cruise operator Carnival and InterContinental Hotels.

IG analyst Joshua Mahony said: "Unfortunately, this Spanish quarantine announcement is unlikely to be the last of its kind, with outbreaks throughout Europe likely to provide a stop-start summer for airlines as different regions attempt to extinguish any surges in Covid-19."

Elsewhere, engine maker Rolls-Royce was on the back foot following reports over the weekend that it is considering selling its ITP Aero division to private equity. It was also knocked lower after ratings agency Moody’s downgraded its credit rating to junk.

HSBC fell following a report it is under pressure to consider selling its US retail bank to boost returns and address international tensions with China.

Education publisher Pearson was trading down after Barclays and Goldman Sachs cut their price targets on the shares.

FTSE 250 IT provider Kainos surged to the top of the FTSE 250 after it announced a special dividend and said annual profit and revenue will be ahead of consensus expectations.

Cairn Energy advanced as it agreed the sale of its Senegal assets to Lukoil for $400m in cash and announced plans for a special dividend of at least $250m.

Market Movers

FTSE 100 (UKX) 6,114.40 -0.15%
FTSE 250 (MCX) 17,191.04 -0.43%
techMARK (TASX) 3,728.02 -0.86%

FTSE 100 - Risers

Polymetal International (POLY) 1,919.50p 6.34%
Fresnillo (FRES) 1,229.50p 3.19%
Kingfisher (KGF) 254.70p 2.58%
Antofagasta (ANTO) 1,055.50p 2.58%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,320.00p 1.89%
Phoenix Group Holdings (PHNX) 672.80p 1.82%
Legal & General Group (LGEN) 220.10p 1.57%
BHP Group (BHP) 1,736.60p 1.57%
Glencore (GLEN) 185.60p 1.53%
Anglo American (AAL) 1,984.40p 1.42%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 182.90p -7.91%
Melrose Industries (MRO) 99.00p -5.13%
Pearson (PSON) 516.80p -5.10%
Rolls-Royce Holdings (RR.) 256.20p -4.44%
Sage Group (SGE) 723.80p -3.26%
InterContinental Hotels Group (IHG) 3,661.00p -2.84%
HSBC Holdings (HSBA) 354.60p -2.81%
BT Group (BT.A) 109.55p -2.49%
British Land Company (BLND) 350.40p -2.26%
Vodafone Group (VOD) 119.74p -1.98%

FTSE 250 - Risers

Kainos Group (KNOS) 985.00p 19.11%
Centrica (CNA) 50.12p 6.32%
Cairn Energy (CNE) 131.70p 5.78%
Hochschild Mining (HOC) 283.00p 5.36%
Centamin (DI) (CEY) 208.40p 4.96%
IG Group Holdings (IGG) 772.00p 3.55%
BlackRock World Mining Trust (BRWM) 415.50p 2.85%
Kaz Minerals (KAZ) 556.60p 2.62%
888 Holdings (888) 189.40p 2.38%
Serco Group (SRP) 159.20p 2.05%

FTSE 250 - Fallers

TUI AG Reg Shs (DI) (TUI) 301.20p -11.31%
easyJet (EZJ) 524.60p -10.93%
Hammerson (HMSO) 65.26p -6.93%
Micro Focus International (MCRO) 282.40p -6.37%
Carnival (CCL) 903.80p -5.20%
Ascential (ASCL) 284.80p -4.49%
Cineworld Group (CINE) 43.41p -4.49%
Capita (CPI) 37.02p -4.46%
Energean (ENOG) 554.00p -4.32%
SSP Group (SSPG) 227.20p -4.30%