UK markets suffer severe dip over new Covid fears
HIGH-FLYING European shares were brought crashing back down to Earth on Friday as UK markets dropped on worries over the coronavirus.
The FTSE 100 had a strong start to the day, hitting a high of 6,262 at around lunchtime but ended the day 100 points lower.
By close it was trading at 6,159.3, up only 12.6 points, or 0.2%.
The index, which includes the UK’s largest listed companies, had already started giving back some of its gains by the time traders in New York awoke with jitters over a fresh spike in new cases.
But the starting bell in the US was enough to pare back gains made across Europe, leaving the German Dax index down 0.7% and France’s Cac down 0.2% by the end of play.
Both had been performing strongly earlier in the day.
“At lunchtime Europe, especially the FTSE, was really pushing ahead, celebrating stimulus hints from Rishi Sunak and Christine Lagarde, while completely ignoring that the US just posted its largest one-day increase in Covid-19 cases since the virus reached its shores,” said Connor Campbell, an analyst at Spreadex.
“Well, the US open effectively grabbed the European indices and forced them to stare at the increasingly ugly situation stateside.”
But traders in the States were much worse hit, with the S&P 500 losing 1.8% of its value, and the Dow Jones trading down 2.2%, shortly after European markets closed.
Texas governor Greg Abbott has paused his state’s reopening plan, forcing bars to close and restaurants to limit the amount of diners they allow in. In London, Berkeley Group revealed that its chairman and founder Tony Pidgley had unexpectedly died at the age of 72. The news of Pidgley’s passing clearly worried investors, who sent the company’s shares to the bottom of the FTSE 100.
Colleagues paid tribute to the hardworking founder, who continued to run the board up until his death.
In other company news, Boohoo investors were not going to make it easy for the company’s founders to win a £150 million incentive as they sent the shares down 0.3%.