The FTSE 100 dropped sharply by lunchtime after companies’ financial reports revealed the impact the coronavirus pandemic has had on their earnings, with Lloyds (LLOY) and Royal Dutch Shell (RDSB) in particular posting big losses.
Also weighing on the stock market was confirmation from the Government of an extension to the isolation period for those with coronavirus symptoms from seven days to 10, following signs that a 'second wave' is underway in Europe.
By 1230, the UK’s leading basket of stocks fell 1.8% to 6,021.
Lloyds tumbled 8.3% to 26p on the news it swung to a loss in the first half of the year after setting aside £3.8 billion to protect against a potential wave of loan losses and warned the outlook remained highly uncertain.
For the six months ended 30 June, the company reported a pre-tax loss of £602 million compared with a profit of £2.9 billion year-on-year.
Shell dropped 2.6% to £11.51 despite actually reporting better than expected second quarter numbers on an adjusted basis. Analysts had still forecast a loss but the oil producer achieved positive earnings. However, on a reported basis the company recorded a whopping $18.3 billion net loss.
BAE Systems (BA.) was buoyed 3.7% to 495p despite the defence company warning that earnings would be lower than last year after reporting a fall in profit in the first half of the year. Investors were perhaps more pleased that the company resumed its dividend payments.
Rentokil Initial (RTO) bounced 1.75% to 558p after it announced first-half revenue from disinfection services of £49 million and said ongoing revenue climbed 1% to £1.3 billion despite the crisis.
Anglo American (AAL) fell 3.85% to £18.97 as the mining giant more than halved its interim dividend after reporting a slump in profit as coronavirus-led disruptions hurt production.
Mining group Evraz (EVR) lost 5.1% to 284.4p as it warned of uncertainty around production and sales owing to turmoil in the oil and gas markets.
RSA Insurance (RSA) headed 3.2% lower to 424.2p despite the group achieving a first-half record for underwriting performance which saw growth in profits of 33%. Statutory results at the insurer were hit by Covid-19 financial market impacts.
Fund manager Man Group (EMG) dipped 1.5% to 123.75p after it reported a fall in first-half funds under management as negative investment performance and net fund outflows weighed on results.
For the six months ended 30 June, pre-tax profit halved to $55 million on-year as funds under management fell 8% to $108.3 billion from 31 December.