London stocks slip on fears of second virus wave; BoE meeting awaited

UK shares fell on Thursday as a surge in coronavirus cases in the United States and China fanned fears of a second wave of infections, with investors also awaiting a Bank of England policy meeting later in the day.

The blue-chip FTSE 100 was down 0.5pc following its strongest two-day percentage gain in two weeks on Wednesday, as the resurgence in cases overshadowed optimism about a swift economic recovery from the pandemic-driven slump.

Expectations are now running high for the Bank of England (BoE) to announce an increase of at least 100 billion pounds ($125 billion) in its bond-buying programme to further boost liquidity.

The mid-cap FTSE 250 fell 0.7pc, with real estate , energy and mining stocks leading declines.

"The additional stimulus that we get from the BoE is largely discounted by now and it might not make much of a difference to markets in the near term... while the spike in cases has put a dent on risk appetite," said Ian Williams, strategist at Peel Hunt.

The commodity-heavy FTSE 100 has rebounded more than 25pc from a coronavirus-driven crash in March, but the index has still lagged both European and US stock markets amid forecasts of the worst UK recession in three centuries.

Focus is also returning to Brexit negotiations as a status-quo transition arrangement with the European Union expires at the end of the year.

Foreign Secretary Dominic Raab on Thursday called on the EU to intensify free trade talks.

Among individual stocks, homebuilder Taylor Wimpey tumbled 4.7pc to the bottom of the FTSE 100 after raising 522 million pounds ($655 million) in a discounted share sale, representing about 11pc of its existing share capital.

London-listed shares of French healthcare firm Novacyt soared 8.3pc as it announced the launch of three new products to support testing for the presence of the new coronavirus.