Second wave fears see FTSE drag heels

Traders started the week cautiously as hopes for reduced physical distancing measures kickstarting the economy were weighed up against rising cases of coronavirus in some countries.

The FTSE 100 closed the day down 47.98 points, or 0.76 per cent, at 6,244.62, in line with European peers.

David Madden, financial analyst at CMC Markets UK, said: “Traders on this side of the Atlantic are worried about the increase in the number of new Covid-19 cases.

“The Americas, China, India and Germany have seen relatively sharp increases in new infections, and that has weighed on confidence for much of the session.

“The losses aren’t huge so traders are not that worried, but they are cautious that some of the good work that has been done in relation to suppressing the virus could be undone.”

A pound was worth $1.245 at the close of the session, up 0.83 per cent. Against the euro it was also up, although only by 0.12 per cent at €1.106.

In company news, pub groups had a strong day, with investors hopeful that the UK government will confirm plans to cut physical distance guidance from two metres to one. Wetherspoons was up 51p at 1,114p; Mars ton’ s was up 7.65 pat 70.25 pa nd mitch el ls& Butler closed the day up 12 pat224.5p.

And retailers also enjoyed share boosts as weekend reports suggested Chancellor Rishi Sunak was weighing up a possible cut to VAT, in the hope of boosting sales. Ocado

closed up 98p at 2,052p, for example.

But investors in travel firms were less impressed with no sign of ending plans for a two-week quarantine for all passengers arriving in the UK. Despite Spain agreeing to welcome UK travellers again, holidaymakers will have to quarantine on their return home. British Airways’ owner IAG closed down 12.5p at 259p.

Elsewhere, JD Sports lost 16p to close at 631p as bosses filed for court protection for its unit Go Outdoors to keep creditors at bay as it ponders what to do with the business.

Cineworld secured the equivalent of £201 million in extra funding from private investors as it gears up to reopen its cinemas next month. However, shares still lost 0.98p, ending the day at 76.38p.