Britain's leading shares fell today amid a two-way pull of improving news on the global economy and reports that Rishi Sunak is not set to give it a big push in his Budget next week.
The FTSE-100 closed down 83.06 points at 6157.3 as investors sat on their hands for more conclusive news to trade on with US markets closed.
The Chancellor's summer statement will not be including any big tax cuts to boost the economy, the Financial Times reported. That will put a damper on the mood in the markets, particularly following yesterday's interview in the Evening Standard when the Prime Minister warned there would be no extension to the furlough scheme after October.
Business leaders were disappointed that they will now be facing a cliff edge of cashflow management as their subsidised payroll bill suddenly comes to an end.
Sunak is likely to still be tweaking his ideas over the weekend when he sees the effects of reopening pubs and restaurants in England this weekend. If it triggers a surge in spending into the economy, he may feel he can get away with doing less intervention.
Yesterday's jobs data in the US were hailed by Donald Trump as proof of his brilliant stewardship of the economy but while they showed a gain of 4.8 million jobs - better than expected - the weekly jobless claims were still rising at a pace of 1.4 million from the week before. Total continuing unemployment claims are running at 19.3 million.
CMC pointed out that covid cases in the US are rising at their fastest rate since 9 May and the jobs data only covered the period to the second week of June.
Stockbroker Numis today said there were few bargains left on the stock market in the UK now that shares had bounced back so significantly from three months ago. "The market for a brief period significantly mispriced certain stocks like ICG in our view. Today it almost feels "back to normal". Share prices, multiples and earnigns are in many cases broadly back to where they were ot at the very least, significantly back from the lows."
That means it's back to longer term value hunting for investors, the broker said, highlighting as its picks St James's Place, Intermediate Capital Group, Hargreaves Lansdown and AJ Bell among others in the fund management space. Ashmore was a decent company to hold onto for the long term although shares would probably fall nearer term.
Jefferies stockbrokers last night produced research showing the UK economy was regaining momentum rapidly, particularly in the past week. It measures public transport, electricity and flights data among other indicators.
An easing of some quarantine restrictions for travellers from Europe boosted easyJet 2% but British Airways owner IAG slipped by the same amount.
Land Securities jumped 0.5% as it said it would be paying a dividend having got 60% of its rents in despite tenants being hit by covid. Biggest risers were Whitbread, Fresnillo, Just Eat Takeaway and Homeserve.
Banks and insurance companies had a weak session, pulling down the FTSE, with Aviva, RSA, Lloyds, RBS and Standard Chartered all down 2-3%. Rolls-Royce plunged 10% amid continuing worries about the aviation industry which saw Airbus just announce big job cuts.
In the second division FTSE 250, Puretech Health leaped 10%, continuing a strong run after recent positive news on deals. The 250 had a better day than the FTSE100, trading fairly flat at 17302.03, down 65.83.