FTSE 100 slides as poor Wall Street opening drags London markets lower

The FTSE 100 sank on Monday as already shaky European indices were pulled further into the mire by a poor start to US trading.

In London, mining, oil, house building, travel and transport stocks were broadly in the red, although banks lifted slightly on speculation that they may soon restart dividend payouts.

London’s top flight closed 68.27 points lower at 5,792.01 at the end of trading on Monday.

David Madden, market analyst at CMC Markets UK, said: “Stock markets in Europe have been rocked by the jump in Covid-19 cases, and the stricter restrictions are a factor too.

“During the summer months, there was a sense of optimism in the markets as economies were being reopened and there was a view that governments had a handle on the crisis.

“Now there is a feeling that countries are struggling to contain the health emergency, and the announcement of curfews and localised lockdowns adds to the view that things are going to get worse before they get better.”

The Dow Jones tumbled by more than 650 points as it fell below, 27,700 for the first time in a month as the health crisis weighed on traders.

Europe’s other major markets closed deeper into the red as the Spanish government’s decision to place the country into a state of emergency impacted sentiment across the continent.

The German Dax decreased by 3.64%, while the French Cac moved 1.87% lower.

Meanwhile, sterling slipped against the US dollar as the greenback continued to be a safe haven for risk-shy traders.

The pound fell by 0.25% versus the US dollar at 1.301 and was up 0.07% against the euro at 1.101.

In company news, The Hut Group (THG) soared after its maiden trading update saw the online retail group raise its revenue forecasts for the year.

Last month, it told investors it expected to post revenues of £1.43 billion for the year but it now predicts a figure between £1.48 billion and £1.52 billion.

Shares in the company closed 28.2p higher at 694.8p after the announcement drove optimism among shareholders.

Elsewhere, tool rental firm HSS Hire slid in value after it announced plans to raise millions of pounds before the end of the year to keep its lenders happy.

The company said it will tap shareholders for £54 million, a large chunk of which will be used to pay off loans.

Shares fell by 1p to 20.2p at the end of trading on Monday.

Education firm Pearson saw its shares buck the wider negative trend after it received an upgrade from UBS.

Shares closed 15.2p higher at 527.6p after the Swiss bank lifted its rating to buy from neutral.

The price of oil sank to a three-week low as travel restrictions and the broad air of negativity hit the energy markets.

The price of a barrel of Brent crude oil decreased by 2.67% to 40.48 US dollars.

The biggest risers on the FTSE 100 were Pearson, up 15.2p at 527.6p; AstraZeneca, up 134p at 8,077p; BT Group, up 1.5p at 106.05p; and Avast, up 6.1p at 501.5p.

The biggest fallers of the day were IAG, down 8.3p at 100.7p; Rolls-Royce, down 17.6p at 226.1p; Sage Group, down 43.2p at 650.8p; and Whitbread, down 142p at 2,244p.

Read Full Story Click here to comment