US markets gatecrash European party

High-flying European shares were brought crashing back down to earth on Friday as UK markets dropped on worries over the coronavirus.

The FTSE 100 had a strong start to the day, hitting a high of 6,262 at around lunchtime but ended the day 100 points lower.

By close it was trading at 6,159.3, up only 12.6 points, or 0.2%.

The index, which includes the UK’s largest listed companies, had already started giving back some of its gains by the time traders in New York awoke with jitters over a fresh spike in new cases.

But the starting bell in the US was enough to pare back gains made across Europe, leaving the German Dax index down 0.7% and France’s Cac down 0.2% by the end of play. Both had been performing strongly earlier in the day.

“At lunchtime Europe, especially the FTSE, was really pushing ahead, celebrating stimulus hints from Rishi Sunak and Christine Lagarde, while completely ignoring that the US just posted its largest one-day increase in Covid-19 cases since the virus reached its shores,” said Connor Campbell, an analyst at Spreadex.

“Well, the US open effectively grabbed the European indices and forced them to stare at the increasingly ugly situation stateside.”

But traders in the States were much worse hit, with the S&P 500 losing 1.8% of its value, and the Dow Jones trading down 2.2%, shortly after European markets closed.

Texas governor Greg Abbott has paused his state’s reopening plan, forcing bars to close and restaurants to limit the amount of diners they allow in.

In London, Berkeley Group revealed that its chairman and founder Tony Pidgley had unexpectedly died at the age of 72.

The news of Mr Pidgley’s passing clearly worried investors, who sent the company’s shares to the bottom of the FTSE 100.

Colleagues paid tribute to the hard-working founder, who continued to run the board up until his death.

In other company news, Boohoo investors were not going to make it easy for the company’s founders to win a £150 million incentive as they sent the shares down 0.3%.

Boohoo’s two founders, a son of one of them, the finance director and other top managers are set to share in the spoils if Boohoo’s valuation rises by two thirds in three years, it was revealed on Friday.

But it was Marston’s shareholders who seemed to lose a lot of faith in the pub company, sending its stock down 9.3% after it warned of an “uncertain” outlook even as pubs reopen. It took a £40 million hit to revenues in the first half of the financial year.

The UK’s biggest tour operator, Tui, fell 5% after cancelling holidays to Florida where Disney World has introduced new health and safety restrictions, including wearing face masks.

Shares in troubled car maker Aston Martin lost 18% of their value in just a day after it announced plans to raise £260 million from shareholders and debt to bolster its finances.

But perhaps the worst day for any company came for Intu, which appointed administrators from KPMG after talks to save the business failed. Its shares had already dropped 55% when they were suspended and Trafford Centre owner Intu has tumbled into administration after failed crunch talks with its lenders.

The shopping centre owner said it has applied to appoint administrators from KPMG, after warning earlier on Friday that it was on the verge of collapse. The owner of the Trafford Centre and Metrocentre said its shopping malls would stay open.

Tesco shareholders celebrated what proved a costly vote for outgoing boss Dave Lewis as shares jumped 1.9% after the board’s proposed pay plan was defeated. Mr Lewis was set to get £6.4 million as part of a pay deal for directors which 67% of shareholders voted against.

And finally, Countrywide’s shares ended the day up 5% as it revealed that demand was starting to return towards normal following lockdown.

The pound dropped 0.7% against both the dollar and the euro to 1.2325 and 1.0991 respectively.

The price of Brent crude oil fell 1.6% to 40.41 US dollars per barrel.

The biggest risers on the FTSE 100 were Smiths Group, up 49p to 1,300p, Smurfit Kappa, up 72p to 2,636p, Whitbread, up 55p to 2,195p, Spirax-Sarco, up 248p to 10,020p, and GVC, up 18.4p to 763.6p.

The biggest fallers on the FTSE 100 were Berkeley, down 161p to 4,105p, Rolls-Royce, down 10.4p to 285p, BT, down 3.05p to 114.55p, Evraz, down 7.5p to 290p, and IAG, down 5.3p to 221.8p.