London stocks end lower as the U.S. reports a record increase in COVID-19 cases

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in his free… read more.
on Jul 3, 2020
  • London stocks end lower as the U.S. reports a record increase in COVID-19 cases.
  • The FTSE 100 index ended 1.3% lower and the FTSE 250 index slid 0.4% on Friday.
  • Next, BP, AB Foods, and Shell were among the major price actions on Friday.

London-listed stocks ended lower on Friday as the U.K.’s blue-chip FTSE 100 index erased its weekly gains on a record increase in COVID-19 cases in the United States that left investors questioning if the prospect of a quick economic recovery is still on the table.

The commodity-heavy index opened at 6,240.36 on Friday and closed 1.3% lower at 6,144.82. Oil and gas companies, including Royal Dutch Shell and British Petroleum, contributed the most to the FTSE 100’s decline as rising COVID-19 cases fuelled the debate of prolonged lockdowns and weighed on global oil prices. Learn more about the different stock exchanges and stock indices.

FTSE 250 slides 0.4% on Friday

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The midcap FTSE 250 index, on the other hand, slid 0.4% on Friday but still ended more than 1% up on the weekly chart. As per analyst David Madden of CMC Markets U.K.:

“Stocks enjoyed a big rally yesterday on the back of the optimism about a possible COVID-19 vaccine but all of the gains the FTSE 100 made yesterday have been lost today on renewed health fears.”

U.K. shares had opened on a hawkish note on Friday as Caixin services PMI showed remarkable improvement in activity last month. At home, however, a report on Friday warned that roughly 46% of manufacturers in the United Kingdom are likely to resort to aggressive job cuts in the upcoming six months.

Other prominent price actions on Friday

Other prominent price actions on Friday included a 4.6% decline in Next (LON: NXT) as Goldman Sachs downgraded its rating on the stock to “sell.” The U.S. investment bank also changed its rating on A.B. Foods (LON: ABF) to “neutral” that resulted in a 1.8% intraday decline.

Land Securities said that sales recovered quickly in the two weeks after the British government eased COVID-19 restrictions in mid-June. The mall operator ended less than 1% up on Friday as it expressed confidence in sales that were reported only 20% down now on a year over year basis. Land Securities is now expected to reinstate dividend payments later this year in November.

Lastly, HSBC closed less than 2% down as the largest European bank announced to have discontinued its industrial metals business that it said produced consistently low returns. The London-headquartered financial services holding company also announced plans of expanding its investments in insurance and wealth management businesses in mainland China.

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