FTSE 100 logs worst month since March on virus resurgence

10/30/2020 | 03:04pm

(Reuters) - London's FTSE 100 fell on Friday, logging its biggest monthly drop since a brutal sell-off in March, as a new wave of regional COVID-19 restrictions threatened a nascent economic recovery.

The blue-chip FTSE 100 index closed 0.1% lower in choppy trading, dragged down by pharmaceutical <.FTNMX4570>, personal goods maker <.FTNMX3760> and aero <.FTNMX2710> stocks. The index fell 4.9% for the month.

After falling nearly 0.8% in morning trade, the domestically focused mid-cap FTSE 250 ended 0.2% higher as the British government resisted a new national lockdown and stuck to its localised approach to restrictions, despite an official survey showing new COVID-19 cases in England increased by around 51,900 each day last week.

In the latest round of restrictions, West Yorkshire, will be placed under Britain's highest alert level Tier-3 from Monday.

"Local restrictions edged up this week... and more is still likely. One important development to watch for is if the government adopts even tighter restrictions (i.e. a new tier 4)," wrote Deutsche Bank economist Sanjay Raja in a note.

"Newsflow over the last week suggests that such an announcement could be imminent."

The indexes have come under pressure this month due to concerns over an accelerating second wave of novel coronavirus infections and Brexit-related uncertainty.

The European Union's chief negotiator said on Friday that the EU and Britain are working hard for a Brexit trade deal but much remains to be done.

Investors are now looking forward to a Bank of England meeting on Nov. 5 where the central bank will weigh the possibility of negative interest rates and is expected to bolster its bond-buying programme again.

Helping limit the losses on Friday, NatWest Group Plc jumped 6% to top the gainers in the FTSE 100 index after the lender swung to a quarterly profit as COVID-19-linked provisions for bad loans dwindled.

BT Group Plc was up 2.3% after Barclays raised its target price on Britain's biggest fixed-line and mobile operator.

Vivo Energy Plc rose 5.4% after the Africa-focused fuel retailer resumed its dividend payout on improved volume in the third quarter.

(Reporting by Devik Jain in Bengaluru; Editing by Aditya Soni and Ken Ferris)

By Devik Jain

© Reuters 2020
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