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Miners, coronavirus fears drag FTSE 100; worst weekly drop in a month

·2-min read
FILE PHOTO: Signage is seen outside the entrance of the London Stock Exchange in London

By Amal S

(Reuters) - London's FTSE 100 ended lower on Friday, as weakness in miners and warnings about a surge in coronavirus infection offset optimism around economic re-opening, and the index posted a weekly loss on flagging travel and energy stocks.

After rising as much as 0.6%, the blue-chip FTSE 100 index fell 0.1%, with base and precious metal miners down 2.8% and 1.8% respectively, while banks dropped 1.7%.

The British government's chief medical adviser said England's coronavirus crisis could return again surprisingly quickly and the country is not yet out of the woods, as infections surged ahead of the lifting of legal restrictions.

"In the morning we saw a sort of initial optimism with travel companies thinking about potential gains from reopening. Now investors will be looking at the number of cases after the warning from the chief medical officer," said Danni Hewson, financial analyst at AJ Bell.

"They'll also be looking at the number of businesses that may have to limit production or shut down entirely because their workforce is being forced to isolate and it just got the UK economy on the backfoot."

The FTSE 100 has gained 8.4% so far this year on support from cheap interest rates, but higher-than-expected inflation levels, hawkish central bank comments and a jump in local coronavirus infections have slowed the rise of the blue-chip index.

The index ended the week 1.6% lower, its worst week in nearly a month, led by a 5.97% weekly drop in travel stocks and 5.14% fall in energy stocks. (Graphic: Travel stocks underperform FTSE 100 since May; down for 5th week,

The domestically-focussed mid-cap index fell 0.2%, dragged down by industrial stocks.

Among stocks, Burberry dropped 5% and was the worst performer on the FTSE 100 index, even after it said its like-for-like sales had risen above pre-pandemic levels, driven by new, younger customers and demand for handbags and trench coats.

GlaxoSmithKline gained 1.3% after the drugmaker said its anaemia drug for patients with kidney disease succeeded in late-stage trials.

(Reporting by Shashank Nayar and Amal S in Bengaluru; editing by Uttaresh.V)

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