FTSE slides as second wave weighs

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

Charts (4)

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.

More from FTSE 100

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.