BP and Shell plummet as oil drops on Covid fears

Oil majors were on the back foot as the price of Brent crude tumbled below $40 a barrel for the first time since June.

Fears are mounting that a rise in coronavirus cases around the world – including in the UK and US as well as parts of Europe and india – could hold back the global economic recovery and dent demand for fuel.

Brent crude fell as much as 6pc towards $39 while US West Texas intermediate was down around 8pc. Both have shed 15pc since last week, with Saudi Arabia’s state oil company Aramco’s pledge to cut prices adding to the downward pressure. On the FTSE 100 index, Royal

Dutch Shell fell 3.3pc, or 36.4p, to 1065.2p while arch-rival BP was down 3.1pc, or 8.15p, to 258.5p.

After a buoyant start to the week, the FTSE 100 lost steam, closing 0.1pc lower, down 7.1p, to 5930.3 points.

The FTSE 250 also fell by 0.1pc, or 17.02p, to 17625.18.

Housebuilders fell out of favour with investors as Bovis Homesowner Vistry Group swung into the red.

Disruptions and shutdowns at sites during the crisis sent it plummeting to a £12m loss in the first six months of the year, down from a profit of £72.5m in 2019.

The number of homes it completed fell too, from 3,371 to 1,235. But it struck an optimistic note, saying it had seen a ‘strong start’ to the second half as restrictions wound down and the housing market came out of hibernation and the Government brought in temporary changes to stamp duty.

it reckons full-year profits will still come in at £130m to £140m. According to chief executive Greg Fitzgerald, it has seen ‘positive sales trends since early May, with consumer interest higher than at any time in recent years’.

But traders were downbeat, sending shares 5.6pc lower, down 35.5p, to 600p by the close.

Other housebuilders also lost ground, with Persimmon falling 2.1pc, or 53p, to 2512p, Taylor

Wimpey dropping 2pc, or 2.35p, to 114.8p, Barratt Developments down 2.2pc, or 11.2p, to 502.8p and

Countryside Properties dropping 2.6pc, or 8.4p, to 311.6p.

Analysts were split by the sector-wide tumble, with AJ Bell investment director Russ Mould saying it came ‘as more investors digested recent news that various sector constituents are being investigated over the way leaseholds were sold’.

iG Group’s Chris Beauchamp said that it was ‘Brexit and the renewed lockdowns of the UK economy’ that were driving the bearish sentiment.

The pain in construction travels beyond builders, however, in a results-heavy day on the market.

Travis Perkins slumped 6.6pc, or 80.5p, to 1139p as Britain’s largest supplier of building materials also slumped to a half-year loss.

Revenue fell by more than 20pc during the first half of the year as many construction projects were put on the backburner.

Salad sales plunged at prepared meals company Bakkavor as shoppers looked for comfort food to eat at home during the lockdown. Revenues slid by 4.6pc to £880.5m in the six months to June, though its pizza and bread business performed strongly. Shares climbed 5.1pc, or 2.8p, to 58.3p. Aerospace and defence business

Meggitt scrapped a planned dividend as bosses said the downturn in the travel industry meant it sank to a loss of £368m in the first six months of the year. Revenues fell 13pc to £917m. Shares fell 3.2pc, or 9.6p, to 291.1p.

Sofa chain ScS Group thanked ‘pent-up demand’ from customers for driving an extra £19m of sales in recent weeks. Shares rose 15.4pc, or 24p, to 180p.