London markets closed firmly down under heavy selling pressure on Thursday following Government confirmation of increased lockdown restrictions in London and elsewhere in response to rising Covid-19 numbers.

Investors also fretted over negative comments from US Treasury Secretary Steven Mnuchin that a big stimulus deal was unlikely before next month’s Presidential election, in line with previous comments from Donald Trump.

The benchmark FTSE 100 ended the day 1.7% lower at 5832.52, albeit having staged a modest recovery from early steeper loses. The mid cap FTSE 250 made something of a late recovery but still closed 0.6% down at 17,838.45.

Packaging firm Mondi (MNDI) led the blue-chip loser board falling more than 4.5% to £15.91. News of new debt funding helped aero-engine maker Rolls-Royce (RR.) top the day’s risers, up more than 8% to 195.1p, followed by food business Just Eat Takeaway’s (JET) 2% gain to £95.98, with investors continuing the back the stock following yesterday’s rapid increase in orders over the past three months.


Ryanair (RYA) encountered turbulence on Thursday, the shares falling 4% to €11.775 after the budget airline cut winter season capacity from 60% to 40%, citing continued travel restrictions across the European Union (EU).

Forward bookings in November and December weakened ‘materially’, said Ryanair, leading to ‘significant base aircraft cuts’ in Belgium, Germany, Spain, Portugal and Vienna. There was also disappointment as Ryanair cut its full year passenger estimate to 38 million and warned this could be revised down further if travel restrictions continue.

Homewares retailer Dunelm (DNLM) softened 5% to £14.82 as a cautious outlook overshadowed the news first quarter trading was ‘significantly’ ahead of expectations thanks to an uptick in sales and gross margins.

The cushions, quilts and kitchens seller insisted is ‘materially outperforming’ the homewares market, though Dunelm is unable to give ‘any meaningful guidance’ at this early point in the financial year given the uncertainty relating to further Covid-19 restrictions and the implications for the economy.

Elsewhere in the retail sector, online electricals seller AO World (AO.) jumped 30% to 302.5p on a strong update for the six months to September showing continued momentum across the period.

Group revenues for the period are expected to be £715 million, up an impressive 57% year-on-year. AO World’s UK business saw continued sales momentum during the second quarter despite the reopening of competitor stores and the washing machines-to-televisions seller now expects to achieve profitability in Germany on an adjusted EBITDA monthly basis during peak trading.

Pizza delivery firm Domino’s Pizza (DOM) slumped 8.5% to 340p as total orders fell by 6% in the third quarter, although Domino’s still expects to report full year underlying pre-tax profits ‘in the range of £93 million to £98 million’, which is in line with market consensus.


Marston’s (MARS) was marked down 1.4% to 44.2p as the pubs operator posted a 30% slump in annual sales to £821 million and announced it would cut jobs following the latest round of virus-related restrictions.

Recruiter Hays (HAS) dropped 1.3% to 114.3p on news it expects to report only a modest profit in the first half of the year, as the pandemic hurts hiring activity across its main businesses.

Electricals manufacturer Volex (VLX:AIM) surged more than 13% higher to 219p as the company forecast revenue and profitability to be above market expectations for the first half of its financial year as well as the full year.

Respiratory drug developer Synairgen (SNG:AIM) slumped 11% to 202p after placing more than 45.7 million new shares at a discounted 175p. This has raised £80 million which Synairgen will use to support SNG001, its potential breakthrough treatment for hospitalised Covid-19 patients.

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Issue Date: 15 Oct 2020