London stocks slid on reports of a slow exit from the current lockdown that will see restaurants and retail outlets closed until mid-April.
The FTSE 100 slid 1%, or 70 points, to 6,553 as it failed to be buoyed by a 0.4% dip in sterling to trade at $1.4008 against the dollar ahead of prime minister Boris Johnson’s lockdown announcement later today.
Johnson will unveil his roadmap out of coronavirus at 7pm tonight, with a phased return to normal life expected to start with a reopening of schools on 8 March and recreation in a public space allowed between two people.
From the end of March, outdoor gatherings of up to six people or two households are expected to be allowed and outdoor sports facilities will reopen.
However, the reopening of non-essential shops and pubs and restaurants is not expected until mid-April, which has caused disappointment in markets.
‘The delay to the retail reopening helps explain why the FTSE and pound have both opened the week in the red,’ said Spreadex analyst Connor Campbell.
‘For while investors are no doubt happy the country is loosening the restrictions once again, the reality is they don’t hold positions in schools and picnics.’
Smith & Nephew (SN), the provider of hip and knee replacements which tumbled last week after reporting an almost halving of profits in 2020, led the blue chips lower. The shares shed 4.3%, or 64p, to £14.09 after analysts cut their share price targets.
Ocado (OCDO) fell 3.5%, or 91p, to £24.68 on a Which? report that said the online supermarket delivery platform had a lack of delivery slots and had struggled to meet a surge in demand caused by the pandemic, while Sainsbury’s (SBRY) ranked highest for grocery delivery according to the consumer rights organisation.
The ‘mid-cap’ FTSE 250 matched the FTSE’s 1% decline, retreating 225 points to 20,810.
G4S (GFS) weighed on the index as it dropped nearly 10% to 242p after GardaWorld pulled out of a £4bn auction for the security group, leaving a clear path for US rival AlliedUniversal.
Mitchells & Butlers (MAB) provided some upside momentum as the pub group leaped 10%, or 29p, to 320p after launched a £351m ‘critical’ cash raise from investors.
The All Bar One and Harvester owner said the share issue would allow it to reduce its unsecured debt and allow it to invest in its business.
Fidelity China Special Situations (FCSS ) slipped 3.1% to 467p after stellar half year results last week when it reported a net asset value (NAV) increase of 51.1% in the six months to 30 September versus a 24.4% rise in the MSCI China index.
Templeton Emerging Markets (TEM ) slipped 2% at £10.30 ahead of an update on Thursday.
Investment company news brought to you by Citywire Financial Publishers Limited.