FTSE 100 drops below 5,800 as selling accelerates

Wed, 21st Oct 2020

Reports suggesting Brexit talks will soon resume with the aim of concluding a deal by mid-November pushed sterling to its highest levels against the dollar in more than a month and contributed to a big slump in the FTSE 100. A rising pound hits the relative value of the overseas earnings which dominate the index and it closed 1.9% lower at 5,776.50. Other factors for investors to weigh included record borrowing figures and higher than expected inflation as well as the continuing imposition of Covid-19 restrictions in the UK. Across the pond the S&P 500 was broadly flat at 3,443.91 by 4.30pm UK time, equities seesawing amid continuing uncertainty over a big US stimulus package, while European stocks were also firmly lower. Gold miner Centamin tumbled 20% to 130p after it slashed its annual output guidance, having paused operations at its Sukari project in Egypt to carry out maintenance work after detecting movement in waste material. Chile-focused copper miner Antofagasta was flat at £10.47 after it also warned on production, citing Covid-19 disruptions and maintenance work. Fellow miner Fresnillo dropped 4.3% to £12.76 as it downgraded its gold output guidance. Elsewhere, gambling company William Hill was up 0.7% to 282p on announcing that its third-quarter revenue had fallen 9% year-on-year, marking an improvement from previous quarters as live sporting events resumed. William Hill, which recently agreed to be acquired by Caesars Entertainment for 272p per share, said the fall in sales compared to a steeper drop of 32% recorded for the first half. Warehouse investor Segro shed 1.1% to 927.6p following news that it had acquired the Electra Park urban warehouse estate in Canning Town, London from Schroders for £133 million. Segro also announced that it had collected 85% of rent due for the fourth quarter. Alcohol and soft drinks group C&C added 1.4% to 179.6p, having returned to profitability during the month of September. C&C, however, warned of weakness in its on-trade business as Covid-19 restrictions returned in October. Wealth manager Quilter, which was recently spun out of South African group Old Mutual, fell 1.4% to 127.4p as it posted a modest rise in third-quarter assets under management. Quilter's AuM for the three months through September increased 1.2% year-on-year to £109.5 billion, amid net inflows of £0.4 billion. Cybersecurity company Avast fell 3.7% to 494p, despite having reaffirmed its outlook after its adjusted earnings rose 3.3% in the third quarter. Challenger bank Metro Bank rallied 2.5% to 61p as it grew its loan book in the third quarter, driven by government-backed lending to small business. Metro Bank's loan volumes in the three months through September rose to £15.09 billion, up 2% compared to the first half and up 1% year-on-year. Active payment deferrals fell to less than 3.5% of the retail mortgage portfolio, down from 16% at the first half. Specialist cleaning company React jumped 11.7% to 1.34p as it guided for a full-year profit ahead of market expectations after demand rose for Covid-19 decontaminations. React's organic revenue for the year through September was expected to rise 42% year-on-year to around £4.4 million. Surveillance systems group Petards jumped 13% to 8.9p after it won a contract from Bombardier Transportation to supply its systems in trains. Story provided by StockMarketWire.com

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