(Alliance News) - Stock prices in Europe were lower on Monday, with investors fretting over accelerating inflation and with London's FTSE 100 index also dented by a resurgent pound ahead of UK Prime Minister Boris Johnson's presentation of his roadmap out of lockdown in England.
"European markets have kicked off the week on a somewhat unstable footing, with the fears over rising inflation and Treasury yields once again dampen sentiment on a day that had promised to be dominated by reopening hopes," IG Senior Market Analyst Joshua Mahony commented.
"Inflation and rising treasury yields remain a key concern for investors, with a gradual rise in both providing a warning sign for equity markets."
The internationally exposed FTSE 100 index was down 35.26 points, or 0.5%, at 6,588.76.
The UK domestic-focused FTSE 250 index was down 126.60 points, or 0.6%, at 20,909.36. The AIM All-Share index was down 9.11 points, or 0.8%, at 1,205.07.
The Cboe UK 100 index was down 0.8% at 655.47 points. The Cboe 250 was down 0.5% at 18,499.96 and the Cboe Small Companies up 0.3% at 12,837.53.
The CAC 40 index in Paris and Frankfurt's DAX 30 were both 0.6% lower.
Cable once again pushed above the USD1.40 mark, as the dollar's early gains on Monday waned by midday.
The pound was quoted at USD1.4035, up from USD1.4020 at the London equities close Friday. The pound was as low as USD1.3979 earlier in the session Monday.
Among the FTSE 100's dollar earners, Imperial Brands was off 0.4% and Intertek was 2.1% lower.
Mahony added: "Boris Johnson is expected to lay out a roadmap for reopening today that many will hope could help lift UK stocks out of this current funk. Value names have fared remarkably well in anticipation of Johnson's roadmap, with firms like Cineworld, Restaurant Group, WH Smith, and Stagecoach highlighting the expectation that we will see some good news for the services sector and domestic travel."
Cinema chain Cineworld was up 3.9% midday Monday. Retailer WH Smith rose 3.7%, bus operator Stagecoach climbed 3.6% and Restaurant Group was 1.1% higher. The Frankie & Benny's owner was 4.6% higher earlier in the session.
Conversely, Ocado and Just Eat Takeaway, two of the bigger online beneficiaries of Covid-19 lockdowns, lost 3.1% and 3.3%, respectively.
UK PM Johnson will tell members of Parliament that all pupils in all years can go back to the classroom from March 8, with outdoor after-school sports and activities allowed to restart as well.
Socialising in parks and public spaces with one other person also will be permitted in a fortnight when the rules are relaxed to allow people to sit down for a drink or picnic.
A further easing of restrictions will take place on March 29 when the school Easter holidays begin – with larger groups allowed to gather in parks and gardens.
A five-week gap from March 8 would suggest the next phase of the programme could begin as early as April 12, if the tests are met. Speculation has centred on non-essential retail opening in that phase, with the possibility of pubs and restaurants being able to serve outdoors.
Pub operator JD Wetherspoon was up 2.8%, one of the best-performing mid-caps. UK PM Johnson has pledged to offer all adults in the UK a coronavirus vaccine by the end of July, raising hopes that a full end to restrictions are in sight.
At the other end of the FTSE 250 index, G4S shed 9.9% to 242.50 pence. Rival bidders for the security services firm, GardaWorld and Allied Universal, both decided to stand firm with previously announced offers.
As a result the UK Takeover Panel said the auction procedure that it had declared for G4S has now ended.
US futures were lower on Monday morning in New York. The Dow Jones Industrial Average was called down 0.5%, the S&P 500 0.7% lower and tech-heavy Nasdaq Composite down 1.3%.
Interactive Investor analyst Richard Hunter noted: "Investor attention is showing signs of switching to value stocks and inflation as the likelihood of economic recovery edges nearer.
"In the US, there has been a small but noticeable rotation out of strong growth stocks such as tech into those which would be immediate beneficiaries of any return to normality."
Amazon.com shares were down 0.9% in the New York pre-market. Apple was down 2.0% and Facebook 1.4% lower.
Among travel stocks that have suffered from virus restrictions, American Airlines climbed 3.4% pre-market.
Against the yen, the dollar was trading at JPY105.47 midday London time, down from JPY105.53 late Friday.
The euro stood at USD1.2139 midday Monday, unchanged from the European equities close Friday. Like the pound, the euro had fallen earlier Monday, slipping to an intraday low of USD1.2091.
German business confidence improved sharply in February, survey results from the Munich-based Ifo institute showed. The Ifo business climate index rose to 92.4 points in February from 90.3 in January - which represents the strongest monthly increase since July last year.
"The German economy is proving robust despite the lockdown, especially thanks to strength in industry," Ifo said.
Brent oil was quoted at USD63.41 a barrel midday Monday, down slightly from USD63.47 at the London equities close Friday.
Oil prices edged lower as the "big freeze in Texas" showed signs of thawing.
Axi analyst Stephen Innes also noted other potential issues for oil prices. "There are other more worrying supply concerns on the horizon as at the current prices level, and it's hard not to think OPEC members could push to ease curbs and spruce up their revenues significantly," Innes said.
Gold fetched USD1,797.64 an ounce midday Monday, up from USD1,786.45.
By Eric Cunha; ericcunha@alliancenews.com;
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