FTSE-100 falls as Covid fears linger and US-China relations suffer
Markets had a quiet session today as the August holidays left share trading becalmed amid thin corporate news.
The FTSE-100 Index put in a steady trading day yesterday, gaining 37.4 at 6127.44 by the close, but today slipped back a modest 28.9 at 6098.46 in morning trading.
Worries over the increase in Covid cases in European countries which reopened their economies earlier such as Spain and Italy are likely to keep a lid on any great improvements without any big economic news on the diary. Mining giant BHP Billiton was the biggest drag on the market after disappointing earnings figures came out late last night. Its shares tumbled 2%, pulling three points off the index.
Last night saw the technology-heavy Nasdaq index hit new record highs despite renewed tensions between US and China over trade. The US pledged more restrictions on Huawei - a development that followed the cancellation of trade talks between the two sides at the weekend. No date has been fixed for the next round. Asian markets were slightly down this morning.
Also not talking to each other are the White House and House of Representatives speaker Nancy Pelosi.
Mike Meadows has reportedly not spoken to Pelosi at all this week, throwing into fresh doubt whether Republicans and Democrats will be able to agree a Covid fiscal package.
That, despite the apparent bursting at the seams of the cash-strapped US postal service. A covid support deal in the world's biggest economy would be likely to boost global stock markets.
News of yet more action in the mergers and acquisitions world should underpin market sentiment.
The bidding for TikTok's US operations saw a third big name throw its hat in the ring in the form of computing giant Oracle. Larry Ellison's tech giant is "seriously considering" a bid, the FT reported today.
That would put it up against Microsoft and Twitter in the bidding, although there are doubts about whether Twitter could afford it.
TikTok's Chinese owner ByteDance is being forced to sell the division by Donald Trump and Oracle is working with a group of ByteDance's existing investors including General Atlantic and Sequoia Capital on the deal.
Ryanair's shares rose 4% on the back of yesterday's news that it is slashing its flight schedule to save profit margins after bookings "noticeably weakened" while Covid cases rose across parts of Europe. The announcement followed EasyJet's decision to pull out of its hubs at Stansted, Newcastle and Southend airports.
The weak dollar boosted metals such as gold, silver, platinum, copper and palladium yesterday. That allowed precious metals to recover some of the ground they lost in a sell-off early last week. Oil was also a big gainer, helping boost share prices. Oil and copper held up today while gold also progressed further, underpinning previous share price gains, although there was some profit taking in BP, down 0.4%.
The FTSE-250 had a better session than the main index, gaining 35.92 at 17808. Oil services group John Wood leaped 9% after its results showed it moving towards a more stable position as it reported better margins and plans to cut debt.
Capita crashed 9% after admitting it would not be able to meet its turnaround target of achieving growth this year.