FTSE slides as second wave weighs
Fiona Cincotta June 22, 2020 11:36 AM
The prospect that the pickup of corona cases in Europe could turn into a second wave and prompt the continent to start closing down again is unsettling European markets and is weighing on the FTSE
The prospect that the pickup of corona cases in Europe could turn into a second wave and prompt the continent to start closing down again is unsettling European markets and is weighing on the FTSE. Banking, travel firms, oil majors and consumer goods shares are the worst hit with HSBC, International Consolidated Airlines, Carnival and InterContinental Hotels all trading lower.
The reverberations from the missing cash at German payment processor Wirecard are continuing to rock the markets both in Germany, where the stock is listed, and with banking stocks in the rest of Europe. While initially the firm claimed that the nearly €2 billion financial gap on its books was due to fraud, over the weekend the company ceded that the cash probably doesn’t exist.
Among the stocks trading lower this morning is also Diageo which has decided to publish its results later to give auditors time to process COVID-related information. Acknowledging that the current circumstances will cause companies a multitude of problems UK regulators have allowed publicly traded firms to defer their reports by up to two months. In Diageo’s case the delay will be only four days.
1 meter or 2?
As the UK government is looking to soften social distancing rules to require only 1m distance in public, retail shares and property firms are beginning to gain ground. The property sector has technically come out of a full freeze already in May but house viewing numbers are still low as interested buyers and sellers fear close social contact and sense long term financial insecurity.
Brent crude rallied over the weekend as investors pinned their hopes on a gradual pickup in demand to trade above $42.50. Concerns over a fresh upsurge in cases in the US and Europe dampened the sentiments slightly and now the contract is swinging around the flat line without clear direction.
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