Rising Covid-19 rates in Europe hit markets

The increase in coronavirus cases across continental Europe and the prospect of further lockdowns and restriction managed to infect the London Stock Exchange on Wednesday by strengthening the pound.

Leading shares on the FTSE 100 closed down 58.49 points, or 0.9%, at 6,713.63 in part due to the pound rising against the dollar, up 0.47% at 1.381, and up against the euro by 0.29% at 1.175.

A strong pound tends to push the internationally focused FTSE 100 into the red, with shares looking more expensive for traders working in dollars.

There were also suggestions that the poor show from Deliveroo in the biggest stock market listing for several years could hinder London’s attempts to be the tech listing hub of choice.

Connor Campbell, financial analyst at Spreadex, said: “The UK index may also be smarting after the disastrous debut of Deliveroo, which has potentially damaged the appeal of a London listing for future unicorns.’’

Although Michael Hewson, of CMC Markets UK, said: “A lot has been made about what this tells us about London as a hub for IPO’S compared to the US, given the slide in the shares, but any IPO is about confidence and the underlying backdrop.

“Its hard to see how much better this IPO might have done in the US given the current environment. Of course, it could have been priced a lot more realistically, which might have made a difference to the overall outcome, but that’s another question entirely.”

In company news, Deliveroo was the main talking point on its first day of trading. Shares closed out the day down 102.55p at 287.45p - a fall of 26.3%.

The blame game began in earnest but the most likely suggestions filtering through in the City were shortpositionsbeingtakenbyhedgefundsandatug ofwarbetweenold-schoolinvestorsandreformists over the new share structure that sees founder Will Shu retain control via preferential shares.

Unions also enjoyed sticking the knife in by flagging corporate governance concerns over its gig economy contract policies.

Elsewhere, Fullers tapped up investors for £53 million to shore up its finances after the lockdown.

Investors were told that it will place 6.45 million new shares at a price of 830p each as part of the raise. Shares closed down 10p at 860p.

Topps Tiles said sales fell in the past quarter as homeowner spending cooled. Sales for the six months to March 27 hit £103.6 million compared with £106.2 million. Shares closed up 0.2p at 69.2p.