London close: Benchmark finishes weaker as EU talks continue

The FTSE 100 ended the session down 0.46% at 6,261.52, while the FTSE 250 rose 0.22% to 17,385.85.

Sterling was stronger against both of its major trading pairs, last rising 0.61% on the dollar to $1.2645, and advancing 0.56% against the euro to €1.1051.

Investor attention was very much on the continent on Monday, as EU leaders resumed talks about a €750m rescue package amid divisions over the split between loans and grants.

“There is a feeling of cautious optimism surrounding the meeting as progress has been made and a further compromise could seal the deal,” said CMC Markets analyst David Madden.

“The traditional north-south divisions are playing out. Some Northern members would like to have a more balanced portfolio of grants and loans, while southern nations would prefer a higher percentage of grants.”

Madden said it seemed the Netherlands was pushing for €390bn in grants, with the remaining €360bn to be issued as loans.

“On the other side of the divide, the French want to issue at least €400bn in grants.

“The European Union is known for bickering, but it is also known for brokering deals.”

Meanwhile, worries about the coronavirus pandemic continued to dent sentiment.

“Enhanced shutdowns are now a genuine possibility as the US failed to emerge from even the first wave of the pandemic,” said Oanda analyst Jeffrey Halley, adding that the news was “equally bad” elsewhere.

“Things are going from bad to worse in India and Brazil.

“Worryingly, countries such as Hong Kong, and Victoria and New South Wales states in Australia are facing second waves, with social restrictions ramped up once again.”

That trend was being repeated globally, Halley noted, explaining that it could undermine any incipient global recovery in the third quarter.

“Markets have not priced in, or are refusing to countenance, this outcome.”

On home shores, figures released earlier showed that pressure on household finances eased a little in July as the lifting of coronavirus restrictions lent some support, but worries about job security grew.

IHS Markit’s monthly household finance index - which measures households’ overall perceptions of financial wellbeing - rose to 41.5 from 40.7 in June and came in comfortably above the eight-and-a-half year low of 34.9 seen in April.

Nevertheless, it remained below the 50.0 mark and far weaker than the levels seen before the pandemic hit in March.

Markit said the phased reopening across parts of the UK economy appears to have been a factor supporting household finances, leading to a slightly improved situation for income from employment and workplace activity in comparison to those recorded during the lockdown period.

However, households' financial outlook for the next 12 months deteriorated compared to June, with the index down to 42.5 in July from 45.9 last month as people become increasingly pessimistic about job security.

In equity markets, travel and leisure stocks were under pressure, with British Airways parent IAG down 3.61%, Cineworld off 4.5%, Carnival losing 3.62%, Wizz Air slipping 1.9%, and TUI 3.61% weaker.

British American Tobacco was knocked 2.85% lower by a downgrade to ‘hold’ from ‘buy’ at Jefferies.

On the upside, most housebuilders advanced after a Rightmove survey showed the average asking price of property coming to market in Britain hit a record this month, up 2.4% compared to March - before the lockdown was implemented - and 3.7% higher on an annual basis.

That marked the highest annual increase since December 2016.

“The busy until interrupted spring market has now picked up where it left off and has been accelerated by both time-limited stamp duty holidays and by homeowners reappraising their homes and lifestyles because of the lockdown,” said Rightmove director and housing market analyst Miles Shipside.

Berkeley Group added 1.42%, Barratt Developments gained 1.07%, Crest Nicholson advanced 0.76%, and Bellway tacked on 2.56%.

Taylor Wimpey was the odd one out, however, reversing earlier gains to close down 1.13%.

AstraZeneca managed to climb back above the waterline by the end of the session, closing up 1.45%, having fallen off a cliff earlier in the afternoon after the company outlined the highly-anticipated phase 1 findings from the Covid-19 vaccine trials being undertaken with Oxford University.

The pharmaceuticals giant said a single dose of ‘AZD1222’ resulted in a four-fold increase in antibodies to the SARS-CoV-2 virus spike protein in 95% of participants one month after injection.

In all participants, a T-cell response was induced, peaking by day 14, and maintained two months after injection.

Neutralising activity against the virus was seen in 91% of participants one month after vaccination and in all participants who received a second dose.

Elsewhere, media group Future rocketed 13.88% after saying it was on track for a 2020 financial year performance towards the top end of expectations.

Market Movers

FTSE 100 (UKX) 6,261.52 -0.46%
FTSE 250 (MCX) 17,385.85 0.22%
techMARK (TASX) 3,858.52 0.76%

FTSE 100 - Risers

Aveva Group (AVV) 4,194.00p 2.77%
Polymetal International (POLY) 1,655.00p 2.54%
Rightmove (RMV) 586.40p 2.12%
Hargreaves Lansdown (HL.) 1,589.00p 1.86%
Avast (AVST) 596.50p 1.79%
Spirax-Sarco Engineering (SPX) 10,645.00p 1.62%
Sage Group (SGE) 690.20p 1.50%
AstraZeneca (AZN) 9,320.00p 1.45%
Berkeley Group Holdings (The) (BKG) 4,488.00p 1.42%
Scottish Mortgage Inv Trust (SMT) 915.00p 1.33%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 211.00p -3.61%
ITV (ITV) 64.60p -3.32%
British American Tobacco (BATS) 2,705.50p -2.85%
Prudential (PRU) 1,221.50p -2.75%
Burberry Group (BRBY) 1,425.50p -2.56%
Informa (INF) 425.00p -2.52%
Royal Dutch Shell 'A' (RDSA) 1,273.20p -2.33%
InterContinental Hotels Group (IHG) 3,789.00p -2.29%
Smurfit Kappa Group (SKG) 2,460.00p -2.07%
BP (BP.) 303.20p -1.97%

FTSE 250 - Risers

Future (FUTR) 1,376.00p 13.88%
Hochschild Mining (HOC) 251.80p 7.70%
Weir Group (WEIR) 1,154.00p 3.87%
Equiniti Group (EQN) 148.60p 3.59%
AO World (AO.) 164.80p 3.39%
BlackRock Smaller Companies Trust (BRSC) 1,296.00p 3.35%
Softcat (SCT) 1,183.00p 2.96%
IP Group (IPO) 67.90p 2.88%
Sirius Real Estate Ltd. (SRE) 80.00p 2.83%
IntegraFin Holding (IHP) 517.00p 2.79%

FTSE 250 - Fallers

Mitchells & Butlers (MAB) 155.60p -5.93%
FirstGroup (FGP) 33.30p -5.56%
SSP Group (SSPG) 233.20p -5.13%
Trainline (TRN) 402.80p -4.81%
Cineworld Group (CINE) 54.78p -4.50%
Hammerson (HMSO) 75.22p -4.49%
Aston Martin Lagonda Global Holdings (AML) 55.10p -4.17%
Wetherspoon (J.D.) (JDW) 901.50p -4.10%
Bank of Georgia Group (BGEO) 860.00p -4.02%
Petrofac Ltd. (PFC) 164.00p -3.93%