London close: Stocks mixed as investors weigh fresh lockdown

The FTSE 100 ended the session up 1.39% at 5,654.97, while the FTSE 250 was down 0.2% at 17,180.52.

Sterling was weaker in afternoon trading, last falling 0.36% on the dollar to $1.2900, and losing 0.31% against the euro to €1.1089.

“Over the weekend, it was revealed that England will enter a one month lockdown, starting this week,” said CMC Markets analyst David Madden.

“The health crisis is still a serious issue, and there are concerns that Europe as a whole will economically suffer, but dealers are clearly keen to buy back into the market for now.

“Financial markets don’t move in straight lines, is an old adage, and it seems that today’s positive move could just be a technical bounce because from a fundamentals point of view, the UK and the eurozone economies are bracing themselves for a tough few weeks ahead.”

Earlier, Bloomberg cited sources as saying that UK and EU officials were getting closer to a compromise on the issue of what access EU boats will have to UK fishing waters.

On the macroeconomic front, a survey showed UK manufacturing activity beat expectations in October as the sector expanded for the fifth month running.

The IHS Markit/CIPS purchasing managers' index weakened to 53.7 from 54.1 in September but the result beat an initial calculation and consensus estimate of 53.3.

“October saw the UK manufacturing recovery continue, albeit with the upturn losing momentum amid ongoing lockdown measures and signs that growth could weaken further in coming months after Brexit-related stockpiling,” said Rob Dobson, director at IHS Markit.

“The main drag was a fall back into contraction for the consumer goods industry, blamed in part on lockdowns and falling demand as virus worries intensified among households.”

Investors were also looking ahead to the US presidential election on Tuesday.

Richard Hunter, head of markets at Interactive Investor, said: "The polls are showing that the outcome remained uncertain, with Biden still ahead.

"However, from a wider perspective the possibility of a delayed or contested result would put further pressure on markets which have suffered the recent disappointments of renewed lockdown concerns, the lack of an interim fiscal stimulus and even some quarterly results from big tech which were not enough to keep up with lofty expectations."

In equity markets, Ocado surged 8.04% as the online supermarket increased its guidance for annual earnings to more than £60m from more than £40m as consumers switch to online shopping.

The company also agreed to buy Kindred Systems, a piece-picking robotics company, for about $262m and robotic arm designer Haddington Dynamics for $25m.

Just Eat Takeaway was a high riser, adding 2.26% amid expectations that people would be ordering in food more once the second lockdown takes effect.

B&M European Value Retail was up 4% after RBC Capital Markets reiterated its ‘outperform’ recommendation on the stock.

Supermarket chains Sainsbury’s, Tesco and Morrisons all gained, by 2.78%, 2.38% and 0.34%, respectively, with delivery slots hard to come by and shoppers stocking up again before the lockdown.

On the downside, travel and leisure-related stocks took a hit ahead of the upcoming lockdown and travel restrictions.

British Airways parent IAG was down 0.02%, Cineworld lost 3.54%, and pub chains Wetherspoons and Mitchells & Butlers fell 0.81% and 4.58%.

Carnival went against that trend, however, losing some of its earlier gains but still ending the day up 3.42%.

Retailer JD Sports Fashion was in the red by 6.77% as it prepared to shut its stores again, while Primark owner Associated British Foods managed to break into the green in late trading, closing up 1.44%.

The company had said earlier that it was expecting to lose £375m in sales as new Covid-19 lockdowns across Europe forced the closure of its stores.

Ladbrokes owner GVC was down 3.44% after it warned that core earnings could fall by up to £43m as new coronavirus restrictions were imposed on its European shops.

Shares of outsourcer Serco tumbled 13.29% after it lost a Ministry of Defence contract to provide nuclear warheads but reiterated its full-year guidance.

Brickmaker Ibstock slid 7.97% after Deutsche Bank downgraded the shares, saying they were up with events.

Market Movers

FTSE 100 (UKX) 5,654.97 1.39%
FTSE 250 (MCX) 17,180.52 -0.20%
techMARK (TASX) 3,579.41 0.06%

FTSE 100 - Risers

Ocado Group (OCDO) 2,468.00p 8.44%
Rolls-Royce Holdings (RR.) 76.56p 7.35%
Royal Dutch Shell 'A' (RDSA) 1,014.60p 5.10%
Royal Dutch Shell 'B' (RDSB) 972.40p 4.67%
BP (BP.) 205.20p 4.37%
Fresnillo (FRES) 1,209.50p 4.04%
BAE Systems (BA.) 412.90p 4.01%
B&M European Value Retail S.A. (DI) (BME) 504.20p 4.00%
Melrose Industries (MRO) 124.25p 3.84%
Smurfit Kappa Group (SKG) 3,022.00p 3.78%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 691.00p -6.77%
Avast (AVST) 453.60p -4.38%
GVC Holdings (GVC) 933.00p -3.44%
NATWEST GROUP PLC ORD 100P (NWG) 120.40p -3.06%
Auto Trader Group (AUTO) 562.00p -2.94%
Aveva Group (AVV) 4,177.00p -2.63%
Sage Group (SGE) 625.20p -1.64%
Antofagasta (ANTO) 1,013.00p -1.60%
Next (NXT) 5,750.00p -1.54%
St James's Place (STJ) 885.60p -1.51%

FTSE 250 - Risers

AO World (AO.) 384.00p 6.52%
Carnival (CCL) 880.60p 3.77%
Wood Group (John) (WG.) 219.30p 3.39%
Cairn Energy (CNE) 143.60p 3.31%
Pershing Square Holdings Ltd NPV (PSH) 2,135.00p 3.14%
QinetiQ Group (QQ.) 243.60p 3.05%
Wizz Air Holdings (WIZZ) 3,286.00p 2.88%
Diversified Gas & Oil (DGOC) 114.60p 2.50%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,780.00p 2.47%
Premier Foods (PFD) 94.60p 2.38%

FTSE 250 - Fallers

Serco Group (SRP) 112.20p -13.29%
Ibstock (IBST) 146.10p -9.03%
Trainline (TRN) 253.20p -7.93%
Frasers Group (FRAS) 346.00p -7.68%
Network International Holdings (NETW) 206.00p -7.37%
TalkTalk Telecom Group (TALK) 90.15p -6.29%
C&C Group (CCR) 151.80p -6.18%
Watches of Switzerland Group (WOSG) 371.50p -5.95%
Spirent Communications (SPT) 276.00p -4.66%
Plus500 Ltd (DI) (PLUS) 1,409.50p -4.47%