Slide in bank stocks, rising virus cases weigh on FTSE 100

A man takes part in a demonstration at the London stock exchange during an Extinction Rebellion protest in London, Britain April 25, 2019. — Reuters pic
A man takes part in a demonstration at the London stock exchange during an Extinction Rebellion protest in London, Britain April 25, 2019. — Reuters pic

LONDON, Sept 18 — A slide in banking stocks weighed on London’s FTSE 100 today, a day after the Bank of England flagged the possibility of negative interest rates, while a rise in Covid-19 cases across the UK fuelled fears of another round of lockdowns.

Britain’s health minister said the novel coronavirus was accelerating with hospital admissions doubling every eight days, but refused to say whether or not another national lockdown would be imposed next month.

The FTSE 100 index fell 0.3 per cent, erasing meagre gains for the week as investors also avoided making big bets with growing prospects of a no-deal Brexit. The mid-cap index lost 0.6 per cent, but was still on course for a second straight weekly gain.

“There is a glass half-empty half-full situation right now,” said Roland Kaloyan, strategist at SocGen.

“On one end, we are seeing headline numbers like retail sales improve, while on the other end, the rise in coronavirus cases and the uncertainty around Brexit are acting as an overhang, leading to some risk aversion in markets.”

A raft of stimulus and optimism around a post-pandemic recovery have helped the FTSE 100 bounce from a coronavirus-induced slump in March, but the index has lagged its U.S. and European peers with the domestic economy heading towards its worst recession in 300 years.

Data today showed British shoppers continued to increase spending last month as strong online demand helped much of the sector enjoy a faster rebound than the rest of the economy.

Food and drug retailers, miners and healthcare stocks were among the few gainers in morning trading, while banks — the worst performing FTSE sector this week — tumbled another 1.0 per cent.

In company news, British hedge fund manager Man Group rose 1.0 per cent after it said it would start a share buyback programme of up to US$100 million (RM412 million), with around 66 million shares to be acquired. — Reuters

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