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Wednesday Update

DB Live: Shares plummet; Heathrow’s Paris blow

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4.30pm: Stock markets plunge on lockdown fears

London shares plunged as fears of second lockdown swept through trading floors and triggered the biggest one-day sell-off since the summer.

The FTSE 100 fell more than 200 points before pulling back to end the session at 5,582.8, down 146.19 (2.55%).

Laith Khalaf, financial analyst at AJ Bell, said: “It’s surprising it’s taken markets this long to take fright at the second wave of the pandemic, and the havoc it might wreak on the global economy. The writing has been on the wall for several weeks now, but stock markets have had their blinkers on. 

“Even the mighty US stock market, which has reached record highs in the face of a global economic slowdown, finds itself in the red. This is a broad sell-off, with almost no stocks in the market making positive ground.

“Until the virus is contained, there can be no clear direction for markets in the short term. We can expect sharp sell offs and relief rallies in line with the ebb and flow of the virus, and the unfolding economic damage it leaves behind.

“So far corporate earnings have held up relatively well considering the challenging backdrop, but what remains to be seen is the longer term effect of social restrictions on the global consumer economy, and how that feeds into company profits.

“Unlike the US market, which is coming off a record high, the Footsie is around 25% below its pre-pandemic level. That means a fair amount of bad news is already baked into prices, though clearly things may yet get worse before they get better.”

1.30pm: Spending statement

Chancellor Rishi Sunak will announce measures to underpin the economy when he delivers a one-year plan for government spending on 25 November.

Full story here

11am: BT signs 5G deal

BT has moved swiftly to replace Huawei with Ericsson to reassure the market that its roll-out of 5G infrastructure is back on track.

Full story here

10am: GDP fall confirmed

Scotland’s GDP is confirmed to have fallen by an unrevised rate of 19.4% during Quarter 2, according to statistics announced today by the Chief Statistician.

This is the second consecutive quarter of falling GDP, following the contraction of 3.2% in Quarter 1. Compared to the same period last year, GDP is estimated to have fallen by 21.9%.

During the second quarter, the updated figures show that output in the services sector fell by 18.9%, output in the production sector fell by 15.6%, and output in the construction sector fell by 41.5% compared to Q1 2020.

London Stock Exchange

9am: Virus worries hits shares

Concerns about the coronavirus pandemic, tightening restrictions across Europe and calls for another national lockdown in the UK all conspired to push the FTSE 100 more than 100 points lower in early trade. By 9am it was trading at 5,632.7 down 96.26 (1.68%).

Boris Johnson is facing pressure to order a second national lockdown after the UK recorded its highest Covid-19 death toll since May. 

German Chancellor Angela Merkel wants all bars and restaurants to close for a month from 4 November and there are reports that France is considering a month-long nationwide lockdown, with President Macron due to make an announcement later today.

Omega Diagnostics

7am: Omega Diagnostics

The Scottish medical testing firm said it is optimistic of further orders for its rapid Covid test from the Department for Health and Social Care and other sources, both domestic and overseas, in the second half of the current financial year.

Full story here including trading update

Heathrow

Heathrow slips behind Paris

Heathrow Airport boss John Holland-Kaye blamed a failure to adopt passenger testing for Paris Charles de Gaulle now taking its crown as Europe’s busiest hub.

Coronavirus testing regimes have been implemented at Paris, and at Amsterdam Schiphol and Frankfurt which are gaining on Heathrow.

Passenger numbers in west London between July and September were down by more than 84% compared with the same period in 2019.

Heathrow recorded a loss of £1.5 billion in the first nine months of the year.

Third-quarter revenue fell by 72% year on year to £239 million, while earnings before tax and interest dropped to £37 million.

Next Straiton

Next

Clothing retailer Next lifted full-year profit guidance after a better-than-expected rise in third quarter sales driven largely by online growth.

Full price sales were up 2.8% against last year.  Total sales (including markdown sales) were up 1.4%.

Full year profit before tax, is now forecast at £365m, £65m higher than the central scenario given in September. 

In a trading statement it said: “The sales performance by product category remains very similar to the second quarter, with home and childrenswear over-performing while demand for men’s and women’s formal and occasion clothing remains weak.

“Online sales remain strong, both in the UK and overseas. In retail, out of town retail parks continue to perform better than high streets and shopping centres.”

Markets

The FTSE 100 is expected to open in negative territory as declines across global markets and worries over rising cases of coronavirus around the world dented investor sentiment in London.

Spread better IG expects the FTSE 100 to open down around 25 points after the index fell in afternoon trade, taking a lead from the US. It closed at 5,728.99, down 63.02 points (1.09%).

Today’s agenda

The Startup Summit takes place virtually

Deadline for bidders to lodge rescue offers for Debenhams

Scottish government expected to announce a pardon for miners prosecuted during the year-long strike in 1984-85

Today’s top Daily Business headlines

Mercedes raises stake in struggling Aston Martin

Verdict on appeal for hotel plan at former Royal High School

Firms ready to adopt ‘hub and spoke’ office model

Funding support for nightclubs and soft play

Scotland sees tech startup boom in lockdown

McKee sets out inward investment plan



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