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UK stocks end week largely unchanged on Brexit, coronavirus headwinds

Published 18/09/2020, 08:27
© Reuters. FILE PHOTO: A street cleaning operative walks past the London Stock Exchange Group building in the City of London financial district, whilst British stocks tumble as investors fear that the coronavirus outbreak could stall the global economy, in London
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By Shashank Nayar and Ambar Warrick

(Reuters) - Consumer stocks weighed down London's mid-cap index on Friday after a rise in new coronavirus cases stoked fears of new lockdown measures, and the blue-chip index was bogged down by major energy stocks.

The FTSE 250 index (FTMC) shed 1% as the spectre of a no-deal Brexit also loomed over markets, and the FTSE 100 (FTSE) fell 0.7%. Both indexes marked lacklustre moves for the week.

Online supermarket Ocado Group (L:OCDO) was the best weekly performing bluechip stock. Security firm G4S Plc (L:GFS) was the best performing mid-cap.

Britain's health minister said the novel coronavirus was accelerating, with hospital admissions doubling every eight days, but declined to say whether another national lockdown would be imposed next month.

"There is a glass half-empty, half-full situation right now," said Roland Kaloyan, strategist at SocGen.

"On one end, we are seeing headline numbers like retail sales improve, while on the other end the rise in coronavirus cases and the uncertainty around Brexit are acting as an overhang, leading to some risk aversion in markets."

Data on Friday showed British shoppers continued to increase spending last month, particularly online.

But with new curbs on social activity, most other consumer sectors, especially the restaurant business, are expected to remain under pressure as infections spread.

A raft of stimulus and optimism around a post-pandemic recovery have helped the FTSE 100 bounce back from a coronavirus-induced slump in March, but the index has lagged its U.S. and European peers, with the domestic economy heading towards its worst recession in 300 years.

Banks (FTNMX8350) were among the worst performing FTSE sector this week after the Bank of England flagged a possible shift to negative rates.

© Reuters. FILE PHOTO: A street cleaning operative walks past the London Stock Exchange Group building in the City of London financial district, whilst British stocks tumble as investors fear that the coronavirus outbreak could stall the global economy, in London

In company news, British hedge fund manager Man Group (L:EMG) rose 4.1% after it said it would start a share buyback programme of up to $100 million, with around 66 million shares to be acquired.

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