Surging Covid-19 cases, US-China tensions keep London stocks muted

An entrance to a Marks and Spencer store is pictured at the Oxford Street, in London July 2, 2020. — Reuters
An entrance to a Marks and Spencer store is pictured at the Oxford Street, in London July 2, 2020. — Reuters

LONDON, Aug 7 — Trading in London-listed shares was subdued today as rising Covid-19 cases and US-China tensions dented sentiment at the end of a week marked by largely upbeat quarterly earnings and improving economic data.

The blue-chip FTSE 100 was up just 0.1 per cent, with Hikma Pharmaceuticals Plc, property website Rightmove Plc and fund supermarket Hargreaves Lansdown topping the index as investors cheered their quarterly earnings updates.

The mid-cap FTSE 250 dipped 0.1 per cent, with focus turning to the monthly US employment — or nonfarm payrolls — report after weekly data yesterday signalled a slowdown in the labour market’s recovery.

“People are just sitting on their hands and waiting to see how things play out with US nonfarm payrolls,” said David Madden, analyst at CMC Markets.

“If we have a bad payrolls number, the sell-off in Europe will be intensified because of the current semi-stagnant negative sentiment.”

UK stock markets have tried to climb in August after a rally stalled in July due to the jump in coronavirus infections, but investors are cautious amid forecasts that the UK economy will take longer than expected to return to its pre-pandemic size.

Data today showed more British shoppers returned to the high street in July, helped by the reopening of pubs and restaurants, but numbers were still much lower than normal for the time of year.

Stocks in Asia took a hit earlier in the day as Sino-US tensions escalated with US President Donald Trump banning transactions with two popular Chinese apps, Tencent’s WeChat and ByteDance’s TikTok.

TP ICAP Plc, the world’s largest inter-dealer broker, fell 8.3 per cent as it signalled a tepid start to the second half of the year.

Rolls-Royce Holdings Plc tumbled 2.9 per cent after a report said activist shareholder ValueAct Capital Management had exited the aero-engineer almost five years after becoming its biggest shareholder. — Reuters

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