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London stocks slump on lockdown worries, Brexit uncertainty

London's FTSE 100 slumped to a three-week low on Thursday as fears about sweeping coronavirus lockdowns and Brexit-related uncertainty prompted investors to book profits after a rally earlier in the month. The FTSE 100 index tumbled 2.1% and was set for its biggest intraday percentage decline since late September, with aero, travel and leisure, energy and insurance stocks leading declines.

Reuters | London | Updated: 15-10-2020 14:17 IST | Created: 15-10-2020 14:07 IST
London stocks slump on lockdown worries, Brexit uncertainty
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London's FTSE 100 slumped to a three-week low on Thursday as fears about sweeping coronavirus lockdowns and Brexit-related uncertainty prompted investors to book profits after a rally earlier in the month.

The FTSE 100 index tumbled 2.1% and was set for its biggest intraday percentage decline since late September, with aero, travel and leisure, energy and insurance stocks leading declines. The domestically-focussed mid-cap FTSE 250 lost 1.5% to sink to its lowest in more than a week with the government mulling tighter lockdowns in London and northern England.

"These localised lockdowns over time grow to nationwide lockdowns almost inevitably and this is going to have an impact on the economy," said TS Lombard strategist Andrea Cicione. Prime Minister Boris Johnson had so far resisted a sweeping lockdown for all of England, while implementing a three-tier system of local measures.

The Liverpool area became the first part to be placed in the highest category, requiring bars, gyms and other businesses to shut, perhaps for months. Pub operator Marston's Plc shed 2.8% as it announced job cuts due to the new restrictions.

After tracking gains in global equities for two straight weeks on hopes of more U.S. stimulus, UK stocks have also come under pressure this week as a Brexit trade deal remains elusive. EU leaders are set to meet in Brussels later in the day where they will pressure Britain for concessions in Brexit trade talks, a day after Prime Minister Johnson expressed his disappointment over the progress in negotiations.

In company news, recruitment agency Hays Plc fell 2.1% after posting a 29% drop in its first-quarter net fees due to the coronavirus crisis. Business supplies distributor Bunzl Plc and Britain's biggest retailer Tesco Plc both lost 3% in ex-dividend trading.


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