UK stocks continued their losing run on Monday with pub and restaurant operators among the biggest decliners as Prime Minister Boris Johnson on Saturday effectively placed the UK under house arrest with new restrictions aimed at halting the alarming rise in coronavirus infections.
The measures, set be implemented on Thursday, are a little less draconian than those in place over the spring and early summer. Even so, economists believe the financial toll will be high, with some expert predicting £1.8 billion will be lost every day the nation stays under lockdown.
WEAK UK START
The benchmark FTSE 100 stave-off significant losses in early trade, slipping around 10 points, or 0.2%, to 5567.84. But there was worse in store for mid-caps, with the FTSE 250 down 0.6% at 17,109.34, with service economy stocks including Cineworld (CINE) and pubs operator JD Wetherspoon (JDW) sharply lower.
With the US Presidential election on Tuesday, this will be a big week for the global economy. Opinion polls have Democrat Joe Biden well ahead, but then they were wrong in 2016 when Donald Trump was first elected. Investors could confront dramatically different paths for the country on taxes, government spending, trade and regulation depending on who wins the White House, the Republican Trump or Democratic former Vice President Joe Biden.
The business calendar remains busy with updates from blue-chips Sainsbury (SBRY), AstraZeneca (AZN) and Associated British Foods (ABF) this week.
The pound dipped 0.3% versus the dollar at $1.2906, gold nudged ahead to $1,882.90 per ounce while Brent crude lost 3.5% to $36.58 per barrel.
CORONAVIRUS DEVELOPMENTS
Budget flyer Ryanair (RYA) fell 1.2% to €11.84 after it posted a loss for its key summer period for the first time in decades, and warned that the Covid-19 crisis could force further cuts and leave capacity next summer as little as half of normal levels.
Associated British Foods, the owner of clothing retailer Primark, said it estimated it would lose £375 million of sales from temporary closures of its stores in major markets due to Covid-19 restrictions.
That news saw the share price fall 2.6% to £16.535.
Betting firm GVC (GVC), which owns Ladbrokes bwin operations, warned of a £43 million hit to profit if its gambling stores remained closed for all of November under Britain's latest coronavirus lockdown. GVC stock fell 1.7% to 969p.
Outsourcer Serco (SRP) plunged 10% to 116p after a joint venture it was part of was stripped of a contract to provide nuclear warheads, after the Ministry of Defence (MoD) moved to effectively renationalise the job.
Serco said was informed by the MoD on Friday night that AWE plc, the entity controlling the Atomic Weapons Establishment and in which it holds a 24.5% interest, will transfer back under the direct control and management of the MoD as from 30 June 2021.
ELSEWHERE ON THE MARKETS
Insurer Hiscox (HSX) rallied 3% to 848.2p after telling investors that it had reserved $75 million for catastrophe claims in the third quarter, with the most active North American wind season on record and another significant wildfire season in California.
Ocado (OCDO), the British online supermarket and technology group, said it would buy two robotics companies for a total of $287 million.
Internet domain name business CentralNic (CNIC:AIM) said it has completed its acquisition of Zeropark and Voluum, collectively known as Codewise, two companies that provide services to domain name owners so that they can generate recurring income from the monetisation of traffic to their websites.
The $36 million was welcomed by investors and helped the share price rise close on 3% to 75.75p, valuing the firm at about £190 million.
Back to Covid-19, Sensyne Health (SENS:AIM) said the University of Oxford is deploying the company’s app in a new coronavirus clinical study. CVm-Health+ will be used in the FACTS evaluation of the feasibility and acceptability of new point-of-care tests for regular asymptomatic Covid-19 testing in the community.
That saw the share price jump 5% to 135p.
Kitchens and joinery products seller Howdens (HWDN) gained 1.5% to 646.12p after it said it would consider renewing dividend payments next year, baring no further disruptions, after performance improved 'significantly,' following virus-led disruptions to activity in the first half of the year.
Fund manager Liontrust Asset Management (LIO) fell 2.8% to £12.15 as it completed the sale and purchase of Architas' UK Investment business for up to £75 million.
The acquisition, completed on 30 October 2020, would add £5,691 million to assets under management and advice, taking Liontrust AuMA to £26.8 billion, the company said.
Engineering company Weir (WEIR) dropped 2% to £14.08 after it appointed two former mining CEOs to its board of directors as it looks to transition to becoming a mining technology business. Srinivasan Venkatakrishnan and Ben Magara will join Weir's board as non-executive directors with effect from 19 January 2021.
