LONDON: London stocks slumped on Wednesday, with the FTSE 100 tumbling to its lowest level in six months as investors dumped riskier assets on fears of more lockdowns and uncertainty over a British trade deal with the EU.
After falling as much as 3.5% in afternoon trade, the blue-chip FTSE 100 index closed 2.6% lower, dragged down by losses in mining, personal goods maker and bank stocks.
The domestically focused mid-cap FTSE 250 index slid 1.9% to a more than three-week low after a media report that Prime Minister Boris Johnson was being put under pressure for a new lockdown to tackle a swiftly accelerating second wave of infections.
“The markets don’t like uncertainty, and with case loads up, there’s chatter about potential universal lockdowns, which would be devastating for the economy and the market,” said Greg Swenson, founding partner of Brigg Macadam, a London-based investment bank.
Swenson also stressed that fiscal policy that supports GDP growth, and more importantly wage growth, are needed along with central bank stimulus to support the real economy.
In company news, Next Plc rose 0.7% after the fashion retailer upgraded its full-year profit outlook on better-than-expected quarterly full-price sales.
Kaz Minerals jumped 10% after it agreed to be acquired by a consortium led by its chairman in a 3 billion pound deal.
With markets under pressure this week on concerns that the new restrictions would derail a nascent economic recovery, investors will look to British Finance Minister Rishi Sunak’s one-year plan for government spending on Nov. 25, which is to focus on tackling the pandemic and protect jobs.—Reuters
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