UK midcaps fall on virus woes; Bluechips supported by resource majors

UK midcaps fall on virus woes; Bluechips supported by resource majors

Reuters  | Jul 14, 2020 18:50

UK midcaps fall on virus woes; Bluechips supported by resource majors

By Shashank Nayar and Ambar Warrick

(Reuters) - British mid-cap stocks ended lower on Tuesday as fears of fresh coronavirus-driven lockdowns overshadowed a fledgling economic recovery, while resource stocks supported the bluechip index.

The blue-chip FTSE 100 (FTSE) 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 (L:BP) provided the biggest boost to the index after its partially owned Norwegian oil firm Aker BP (OL:AKERBP) on Tuesday 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 (L:PCT) was the biggest drag on Britain's midcap index (FTMC), which lost 1.2% for the day.

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

Online supermarket and technology group Ocado (L:OCDO) slipped 2.2% despite reporting a 27.2% 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 on Tuesday showed UK gross domestic product rose 1.8% in May after slumping by a record 20.3% in April. But consumer spending remains far below normal levels and economists are cautious about the longevity of any recovery.

© Reuters. FILE PHOTO: The Canary Wharf financial district is seen from the construction site of 22 Bishopsgate in London

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Google Monster
Google Monster

Creating and manipulating volatility is the norm  ... (Read More)

Jul 14, 2020 11:58 GMT· Reply
Tim Platts
Tim Platts

Usual rubbish from the papers to aid their wealthy clients swing trade positions and probably those from the US and China - the two countries bolstering their own financial positions to further dominate their global positions. Lets hope they both fall hard one day.  ... (Read More)

Jul 14, 2020 08:10 GMT· Reply
Beebs Elite
Beebs Elite

What’s the point in this fear mongering. No Government advisors have warnes of a coming second wave. The country will continue to re-open.  ... (Read More)

Jul 14, 2020 08:01 GMT· Reply
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