UK midcaps fall on Covid-19 woes, Bluechips supported by resource majors

People walk through the lobby of the London Stock Exchange in London. The blue-chip FTSE 100 ended largely unchanged, but well above session lows. ― Reuters pic
People walk through the lobby of the London Stock Exchange in London. The blue-chip FTSE 100 ended largely unchanged, but well above session lows. ― Reuters pic

LONDON, July 15 ― British mid-cap stocks ended lower yesterday as fears of fresh coronavirus-driven lockdowns overshadowed a fledgling economic recovery, while resource stocks supported the bluechip index.

The blue-chip FTSE 100 ended largely unchanged, but well above session lows. Energy and mining stocks were the best performers on the index for the day, helped by weakness in the pound.

BP Plc provided the biggest boost to the index after its partially owned Norwegian oil firm Aker BP yesterday beat second-quarter pretax profit expectations.

Still, most other bluechip sectors ended lower as new coronavirus restrictions in California pressured technology stocks.

Tech-oriented investment trust Polar Capital Technology Trust was the biggest drag on Britain's midcap index, which lost 1.2 per cent for the day.

Online gadget retailer AO World bottomed out the midcap index despite reporting a large jump in annual profit, as it warned of a fall in consumer confidence.

Online supermarket and technology group Ocado slipped 2.2 per cent despite reporting a 27.2 per cent jump in first-half retail sales.

Speculation over a second wave of British coronavirus infections next winter rattled investors hoping for a quick economic recovery from the pandemic.

Local stocks have rallied from March lows amid slightly improving economic readings, while the government's scaling back of virus-related curbs also looked to help a recovery.

Still, markets remain wary of a surge in Covid-19 cases after the reopening, as seen in the United States and other major economies.

“With the UK being in the early stages of reopening up the economy, there is a fear among investors that if a threshold is exceeded, coronavirus cases might spike,” said David Madden, analyst at CMC Markets.

Data yesterday showed UK gross domestic product rose 1.8 per cent in May after slumping by a record 20.3 per cent in April. But consumer spending remains far below normal levels and economists are cautious about the longevity of any recovery. ― Reuters

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