A stronger than expected recovery in the Eurozone economy was not enough to prevent a volatile FTSE 100 falling firmly back into the red by lunchtime, hit by concerns over a second lockdown and a rising pound.

Economic activity for Eurozone countries as a whole between July and September was 12.7% higher than in the previous three months, beating expectations.

But this failed to lift UK stocks following a surge in the pound, hurting the exporter-heavy FTSE, while more and more calls for a second national lockdown also dented confidence.

Having started the day around 0.8% lower before climbing back into positive territory, at around 12.20 the UK’s leading basket of stocks was down 0.44% to 5,557.

NATWEST IN FOCUS

In company news, NatWest (NWG) topped the FTSE leader board on Thursday with a 5%-plus jump to 123.35p 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 2% to 92.9p.

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 1.5% lower to 153p.

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.

Pharmaceutical 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 0.34% on the news to £78.49.

BEST OF THE REST

Oil giant BP (BP.) nudged 1.2% higher to 195.8p 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, a decision made due to tough competition in the Asian market, the global major said.

Royal Dutch Shell (RDSB) rallied 2.1% to 917.7p 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 3.5% to 74.2p.

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 dipping 0.15% to 136.2p.

Computer services provider Computacenter (CCC) fell 0.17% to £22.94, 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 1.6% to 295.6p 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 4.2% to 26.3p, 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 3.9% to £20.42 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