(Alliance News) - London stocks struggled on Thursday as lockdown worries came to the fore once more, with New York announcing plans to shut schools and Japan registering record daily coronavirus infections.
The FTSE 100 was down 57.16 points, or 0.9%, at 6,328.08 midday Thursday. The mid-cap FTSE 250 index was down 110.91 points, or 0.6%, at 19,588.96. The AIM All-Share index was down 0.1% at 1,016.78.
The Cboe UK 100 index was down 1.0% at 629.90. The Cboe 250 was down 0.6% at 16,972.46, and the Cboe Small Companies flat at 11,257.29.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were down 0.9% and 1.0% respectively on Thursday.
"Once again, rising infection rates and lockdown concerns are the market's primary focus as positivity on the back of recent Covid-19 vaccine headlines is quickly fading," said Stephen Innes, chief global markets strategist at Axi.
He continued: "And in what could be a foreshadow of more wide-sweeping public health measures, as virus cases across the globe continue to rise, the latest Covid beat down is coalescing with New York City's school system set to be shut down again today."
New York Major Bill de Blasio said the schools would shut from Thursday "out an abundance of caution" after the city recorded a seven-day average positivity rate of 3%. New York City is the largest school district in the US with 1.1 million students.
The city has also re-imposed some restrictions on bars and restaurants.
The decision in New York came as the Johns Hopkins University tally on Wednesday showed that more than a quarter million people have died from Covid-19 in the US.
Outside of the US, Japan's prime minister said the country is on "maximum alert" after logging a record number of daily coronavirus infections. More than 2,000 cases were recorded nationwide on Wednesday, with nearly 500 in the capital Tokyo alone.
Prime Minister Yoshihide Suga said he would support local regions if they asked businesses to close early, and that restrictions including limiting groups at restaurants to four people should be considered.
The Japanese yen was lower on Thursday. Against the yen, the dollar was quoted at JPY104.06, higher versus JPY103.71.
The US dollar was also stronger versus the pound and euro, with the buck riding Thursday's risk-off wave. Sterling was quoted at USD1.3242 at midday, lower than USD1.3300 at the London equities close on Wednesday and the euro softened to USD1.1827 from USD1.1870 late Wednesday.
Safe haven gold failed to make headway due to the dollar's strength. The shining metal was quoted at USD1,861.33 an ounce midday Thursday, down from USD1,879.79 on Wednesday.
Brent oil was also set back, trading at USD44.04 a barrel, down on USD44.44 late Wednesday.
Even some more positive vaccine news was unable to lift stocks on Thursday. The latest trial results have shown that the University of Oxford's ChAdOx1 nCov-2019 vaccine has been shown to trigger a robust immune response in healthy adults aged 56-69 and people over 70.
The study of 560 healthy adults – including 240 over the age of 70 – found the vaccine is better tolerated in older people compared with younger adults, a promising sign given older people are more at-risk of severe illness.
The study also found the vaccine, being developed with AstraZeneca, was less likely to cause local reactions at the injection site and symptoms on the day of vaccination in older adults than in the younger group.
On the latest vaccine news failing to spark a positive reaction in markets, IG's Chris Beauchamp said: "The impact of these vaccine announcements having been on a declining trend since the first, excitedly-received news from Pfizer almost three weeks ago. There appears to be little desire to chase equities at these levels, and perhaps rightly so, with markets looking priced for perfection and still vulnerable to some short-term turbulence."
AstraZeneca shares were down 0.1% in London at midday.
At the bottom of the FTSE 100 was Kingfisher, down 5.6% despite seeing a stay-at-home boost as consumers turn to home improvements.
The B&Q owner said sales jumped 17% year-on-year to GBP3.46 billion in the three months to October 31. At constant currency, sales were 18% higher, while like-for-like constant currency sales climbed 17%.
Online sales more than doubled, Kingfisher explained, and they now account for 17% of group sales, compared to 8% a year ago.
In the six weeks to November 14, which has coincided with tighter restrictions in Europe, including part of England's one-month lockdown, group like-for-like sales are up 13%, slowed somewhat from the third-quarter.
Johnson Matthey fell 4.9% as the speciality chemicals firm posted a fall in interim profit as it saw weaker demand in its Clean Air segment.
Revenue for the six months to September 30 rose 2% to GBP6.80 billion, but pretax profit slumped 88% to GBP26 million. The fall in profit was driven by lower demand in the Clean Air segment, which mostly serves car makers, and major impairment and restructuring charges of GBP78 million.
Johnson Matthey said that following "temporary disruption" in its Clean Air unit earlier in the year, it is seeing a strong recovery in demand across all regions, especially in China. Clear Air underlying operating profit was down 57% to GBP77 million in the half.
Halma shares rose 2.2% as, while the hazard detection and life protection technologies manufacturer reported a profit fall in its first half, it upgraded guidance.
Halma reported a GBP96.3 million pretax profit, down 9.0% from GBP105.8 million. This came as revenue dropped 5.4% to GBP618.4 million from GBP653.7 million, including a 17% drop in UK revenue to GBP87.6 million from GBP105.2 million.
Chief Executive Andrew Williams said: "We have had a good start to the second half, with order intake ahead of revenue and up on the same period last year. Our improving trading performance, together with our strong cash position, will enable us to accelerate strategic investments in the second half of the year. As a result of our progress so far this year, we now expect adjusted profit before tax for [financial 2021] to be around 5% below [financial 2020], compared to prior guidance of 5% to 10% below [financial 2020]."
Rallying to the top of the FTSE 250 was Royal Mail, up 6.1% amid "robust" parcel volumes.
Revenue for the half-year to September 27 amounted to GBP5.67 billion, up 9.8% on a year ago. However, pretax profit dived 90% to GBP17 million from GBP173 million, and the firm posted an operating loss of GBP20 million versus a profit of GBP61 million a year prior.
For the Royal Mail arm, its UK business, revenue was up 4.9% to GBP3.83 billion from GBP3.65 billion a year before, with parcels revenue up 33% but letters revenue falling 21%.
Parcel revenue exceeded letter revenue for the first time in the UK business. Parcel revenue climbed to GBP2.30 billion from GBP1.73 billion, while letter revenue fell to GBP1.53 billion from GBP1.92 billion.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Group revenue has turned a corner, rising by 10% for the first time since privatisation and parcels are pulling in 60% of revenue at Royal Mail, compared 47% before the pandemic hit."
Cineworld shares fell 8.7%. The cinema chain operator is considering a company voluntary arrangement as part of talks with lenders, the Financial Times reported.
Cineworld, the FT said, is looking to reduce its rent payments and to permanently close UK cinemas amid lockdown restrictions and a lack of blockbuster films. Citing "three sources close to the negotiations" the FT said the insolvency process is aimed at cutting costs and is part of talks with lenders, as Cineworld seeks access to capital while waiting for the return of major movie releases in the spring.
The economic events calendar on Thursday has the latest US jobless claims figures at 1330 GMT.
By Lucy Heming; lucyheming@alliancenews.com
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