London stocks slump on lockdown worries, Brexit uncertainty

Credit: REUTERS/SIMON DAWSON

London's FTSE 100 slumped to a three-week low on Thursday as fears about sweeping coronavirus lockdowns and Brexit-related uncertainty prompted investors to book profits after a rally earlier in the month.

By Devik Jain

Oct 15 (Reuters) - London's FTSE 100 slumped to a three-week low on Thursday as fears about sweeping coronavirus lockdowns and Brexit-related uncertainty prompted investors to book profits after a rally earlier in the month.

The FTSE 100 index .FTSE tumbled 2.1% and was set for its biggest intraday percentage decline since late September, with aero .FTNMX2710, travel and leisure .FTNMX5750, energy .FTNMX0530 and insurance .FTNMX8570 stocks leading declines.

The domestically-focussed mid-cap FTSE 250 .FTMC lost 1.5% to sink to its lowest in more than a week with the government mulling tighter lockdowns in London and northern England.

"These localised lockdowns over time grow to nationwide lockdowns almost inevitably and this is going to have an impact on the economy," said TS Lombard strategist Andrea Cicione.

Prime Minister Boris Johnson had so far resisted a sweeping lockdown for all of England, while implementing a three-tier system of local measures.

The Liverpool area became the first part to be placed in the highest category, requiring bars, gyms and other businesses to shut, perhaps for months.

Pub operator Marston's Plc MARS.L shed 2.8% as it announced job cuts due to the new restrictions.

After tracking gains in global equities for two straight weeks on hopes of more U.S. stimulus, UK stocks have also come under pressure this week as a Brexit trade deal remains elusive.

EU leaders are set to meet in Brussels later in the day where they will pressure Britain for concessions in Brexit trade talks, a day after Prime Minister Johnson expressed his disappointment over the progress in negotiations.

In company news, recruitment agency Hays Plc HAYS.L fell 2.1% after posting a 29% drop in its first-quarter net fees due to the coronavirus crisis.

Business supplies distributor Bunzl Plc BNZL.L and Britain's biggest retailer Tesco Plc TSCO.L both lost 3% in ex-dividend trading.

(Reporting by Devik Jain in Bengaluru; Editing by Uttaresh.V and Arun Koyyur)

((Devik.Jain@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2062; ;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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