UK stocks fell again in opening trade on Friday, with the FTSE 100 set for its worst monthly loss since March, on fears that lockdowns to tackle surging coronavirus cases would disrupt a nascent economic recovery.

The benchmark FTSE 100 was showing a relatively modest 0.15% decline to 5573.40 at 9am, having initially plunged 0.8% in opening deals. Blue chips were dragged lower by mining, healthcare, personal goods and aerospace stocks.

The mid-cap FTSE 250 also fell, down 0.26% to 17133.19.

Both indexes fell for a fifth straight session as pressure mounted on Britain to impose a second nationwide lockdown, even as the government said it would stick with a system of local restrictions.

Aero-engineer Rolls-Royce (RR.) lead the FTSE loser board, slumping 7% at 67.34p, as investors continue to digest £2 billion-worth of new cash raised earlier in the week.

NATWEST IN FOCUS

NatWest (NWG) topped the FTSE leader board on Thursday with a 5%-plus jump to 123.33p after the lender swung to a quarterly profit as it set aside a smaller-than-expected amount to deal with pandemic-driven bad loans.

British Airways-owner International Consolidated Airlines (IAG) said it was driving down its cost base and called on governments to adopt pre-departure Covid-19 testing to allow travel during a second wave of infections that has locked down Europe again.

IAG shares rose 3% to 92.86p.

The world’s biggest shipper of coal Glencore (GLEN) has cut its production target for the third time this year as the company faces an extended strike at a key Colombian mine, nudging the stock 0.77% lower to 154.39p.

Glencore now expects to produce around 109 million tons of coal this year, compared with an earlier goal of about 114 million tons, the company said in a statement Friday, with 2020 output down 20% on 2019 so far.

Drugs giant AstraZeneca (AZN) said it had agreed to sell commercial rights for two of its heart failure and blood pressure medicines to German pharmaceutical company Cheplapharm Arzneimittel for $400 million.

Astra shares dipped 0.3% on the news to £78.51.

US BOUNCES AS TOP TECHS IMPRESS

Overnight in New York, the Dow Jones Industrials Average closed 139 points, or 0.5% higher at 26,659, albeit having dropped 900 points on Wednesday, its biggest fall since June.

The broader S&P 500 index recovered 1.2% and the tech-laden Nasdaq Composite rallied 1.6%. But the mood soured in after-hours trading with US futures dropping sharply as the big batch of tech numbers prompted profit-taking in the recent high-flyers.

Big tech stocks like Apple, Amazon, Alphabet and Facebook impressed Wall Street by beating revenue estimates, although some failed to excite on other metrics.

With after-hours tech declines, Asian markets were also hammered on Friday, with Hong Kong’s Hang Seng index dropping 1.8%, and Japan’s Nikkei 225 index off 1.5%.

Gold prices rose as the dollar retreated, supported by worries of soaring coronavirus cases in the US and Europe as well as uncertainty over the upcoming US presidential election.

Oil prices tumbled, touching a five-month low and extending the previous day's sharp decline on the impact renewed coronavirus lockdowns could have on oil demand.

BEST OF THE REST

Oil giant BP (BP.) nudged 1% higher to 195.6p after unveiling plans to stop producing fuel in Australia and will convert its Kwinana oil refinery, the biggest of the country's four. It will convert the plant into a fuel import terminal, aa decision made due to tough competition in the Asian market, the global major said.

Royal Dutch Shell (RDSB) rallied 2% to 915.6p after the company said it was ramping up production at it Mars Corridor And Appomattox platforms in the Gulf of Mexico that were shut due to Hurricane Zeta.

Africa-focused fuel retailer Vivo Energy (VVO) said it will pay the previously withdrawn 2019 final dividend of $0.027 per share as volume in the third quarter improved on the second as Covid-19 restrictions began to ease.

That helped the stock rise close on 2% to 72.9p, valuing the business at around £925 million.

The Bank of England said it had extended its banknote printing contract with De La Rue (DLAR) by three years. It means that the manufacturer will maintain exclusivity in printing Bank of England banknotes and operating the Bank’s facility in Essex until 2028.

Yet this apparently reassuring news left investors cold with the stock dropping more than 1% to 134.9p.

Computer services provider Computacenter (CCC) fell 0.3% to £22.92, despite announcing that it was ‘very comfortable’ with its current expectations for the full year amid a strong backlog of orders.

Travel company TUI (TUI) added 0.3% to 291.9p after it signed a further sale and leaseback agreement with BOC Aviation, this time for two new Boeing 737 MAX-8 aircraft for a combined $90 million (€76 million).

Russia-focused gold miner Petropavlovsk (POG) slipped 2.9% to 26.67p, having swung to a first-half loss after rising revenue, boosted by higher output and gold prices, was offset by losses related to a debt conversion option.

Petropavlovsk, which recently underwent a board shakeup, said that it was aiming to provide a greater focus on ‘providing returns to all shareholders’, while noting that it hadn't declared a dividend for eight years.

Marketing company 4imprint (FOUR) shed 4.2% to 20.35 after investors were left unimpressed by news that its average weekly revenue over the last four weeks was around 65% of the prior-year period.

Restaurant operator Tasty (TAST:AIM) dropped 9.6% to 1.36p as it swung to a deeper first-half loss after the pandemic hammered sales, while warning of more pain from further UK lockdowns.

Tasty said it continued to negotiate with landlords and had secured a loan facility of £1.25 million, which could be drawn down until 7 February.

‘However, drawdown is restricted until the future of the group is assured through restaurant closures and creditor arrangements,’ it added.

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Issue Date: 30 Oct 2020