The FTSE 100 fell for the first time in five sessions on Thursday as a clutch of blue-chip firms traded ex-dividend, while National Express Group slumped after reporting a pre-tax loss for the first half of the year.
The bus company (NEX.L) tumbled 12% and was on track for its worst day in four months as it said it was bracing for more pressure on its finances over the next year.
A 0.8% decline for the FTSE 100 .FTSE pulled it back from three-week highs, with firms including AstraZeneca Plc (AZN.L), BP Plc (BP.L), Royal Dutch Shell Plc (RDSa.L) and Legal & General Group Plc (LGEN.L) trading without entitlement to a dividend payout.
The mid-cap FTSE 250 .FTMC was off 0.3% after ending Wednesday at a two-month high with investors betting on more fiscal and monetary stimulus to lift the world's sixth-largest economy from a deep coronavirus-induced recession.
“It seems that investors aren’t feeling quite so confident in the FTSE now that the dust has settled on the latest GDP data,” said Connor Campbell, analyst at Spreadex.
The FTSE 100 has bounced from its March lows but has underperformed its U.S. and European peers as data points to a much bigger hit to the UK economy from the health crisis.
Although key sectors such as housing have begun to show signs of a rebound, analysts have warned that the mini-boom could go bust once the government’s jobs subsidy programme closes in less than three months’ time and a tax cut expires at the end of March.
Global market sentiment also wobbled on Thursday following a strong finish on Wall Street overnight as focus turned to U.S.-China talks on Saturday to review the progress of their Phase 1 trade deal.
Insurer Just Group (JUSTJ.L) and tile retailer Topps Tiles (TPT.L) both jumped more than 13% on upbeat forecasts.
European stocks fell on Thursday as simmering tensions between the United States and China, and elusive U.S. fiscal stimulus, pushed investors to book profits after four straight sessions of gains, while Airbus dipped as Washington left aircraft tariffs unchanged.
The pan-European STOXX 600 was off 0.4%, with Airbus (AIR.PA) sliding 1.2% after the U.S. government said it would maintain 15% tariffs on planes and 25% tariffs on other European goods, despite moves to resolve a long-standing dispute over aircraft subsidies.
London's FTSE 100 .FTSE was at the front of declines among major European bourses, led by AstraZeneca (AZN.L), BP (BP.L), Diageo (DGE.L), Glaxosmithkline (GSK.L) and Legal&General (LGEN.L), which traded without entitlement to a dividend payout.
Still, with the U.S. S&P 500 index .SPX within striking distance of a record high, analysts said there were few cues for global equities to pull back, with investors also disregarding U.S-China angst. [MKTS/GLOB]
“There’s no stopping this market at the moment,” said Michael Baker, an analyst at ETX Capital.
“There’s not a lot negative sentiment (and) the market is fairly confident that a U.S. stimulus deal will be reached even if it’s a last minute one.”
U.S. Democrats and Republicans remain deadlocked after weeks of wrangling over a fifth coronavirus aid bill. President Donald Trump on Wednesday accused congressional Democrats of not wanting to negotiate because he was refusing to go along with “ridiculous” spending requests unrelated to the pandemic.
In Europe, the STOXX 600 is still about 14% below its all-time high as data points to a slower-than-expected rebound from the pandemic. A survey on Thursday showed German companies expect business to return to normal in an average of 11 months, with the number even higher for firms in the services sector.
Struggling conglomerate Thyssenkrupp (TKAG.DE) plunged 13.1% after it said its steel unit would rack up 1 billion euros ($1.2 billion) in operating losses this year, raising pressure to fix or sell the division. The stock is on course for its biggest one-day decline in three months.
Danish brewer Carlsberg (CARLb.CO) slid 4.7% on warning that lockdowns will impact sales in the second half of the year in its key markets of China and Western Europe.
TUI (TUIT.L), the world’s largest tourism company, fell 3.0% as it sunk to a 1.1 billion euro ($1.30 billion) loss in the third quarter due to the COVID-19 pandemic.