Source: Sharecast
"There is the whiff of a hangover for investors this morning as European shares stumbled after an exuberant rally in the previous session that left the major bourses around 2-3% higher to start the week," said Neil Wilson, chief market analyst at Markets.com.
"We haven’t made it back to the key mid-Sep levels and bulls may be looking at downside risks in the shape of the slowing economic recovery and pre-election jitters. Nancy Pelosi and Steve Mnuchin may be able to cut one last [fiscal] stimulus deal before the election, but it still looks like the odds of it passing the House and Senate are less than evens."
At 1218 BST, the FTSE 100 was down 0.44% or 26.22 points at 5,901.71, while sterling was 0.23% firmer against the US dollar at 1.2863.
Investors were also keeping close tabs on any fresh headlines around the ongoing Brexit talks.
Pantheon Macroeconomics said investors have kept their faith that a deal will be agreed and remained slightly net long sterling.
"This is in contrast to last year, when investors positioned for the pound to decline further. We continue to think that investors are right to anticipate a deal - we still see only a 20% chance of no-deal - though we expect negotiations to continue deep into Q4," it said.
Mortgage approvals data from the Bank of England for August also surprised to the upside, printing at 84,700 (consensus: 71,300) - a 13-year high.
In corporate news, British Airways owner IAG, engine maker Rolls-Royce and GKN owner Melrose were all in the red as investors continue to fret about the impact of the Covid-19 crisis and restrictions on the airline industry.
Other travel-related stocks were under the cosh, with Upper Crust owner SSP, budget airline easyJet and travel company TUI all weaker.
Cineworld was down as well after S&P cut its rating on the cinema operator's long-term debt to CCC- in anticipation of liquidity pressures.
Elsewhere, retailer Next was knocked lower by a downgrade to ‘sell’ from ‘hold’ at Berenberg.
High Street baker Greggs fell sharply as it warned of job cuts in the face of expected lower demand and the closure of the government’s Job Retention Scheme ends next month. The company said like-for-like sales in company-managed shops averaged 76.1% of 2019 levels in the four weeks to September 26 - in line with planning assumptions.
On the upside, plumbing and heating products distributor Ferguson rallied after it posted a small drop in full-year profit and revenue but said it was reinstating its dividend after better-than-expected recent trading and announced the appointment of a new chief financial officer.
Discount retailer B&M European Value Retail was on the rise after it said first-half group adjusted earnings before interest, tax, depreciation and amortisation were set to be above its previously-guided range following strong sales.
Insurers were in focus after the Financial Conduct Authority said it had filed an appeal in a test case on business interruption claims related to the Covid-19 pandemic in case insurers failed to reach a deal on payouts to policyholders by Wednesday.
The FCA said discussions continued "at speed" with the eight insurers and two intervenors that took part in a test case to reach an agreement in principle on a range of issues to avoid an appeal.
RSA said it had sought leave to appeal and that a court hearing in relation to the appeal applications would take place on October 2, while Hiscox said it had prepared to apply for an expedited appeal, adding that it "has not yet made a decision on whether it will seek to appeal".
Market Movers
FTSE 100 (UKX) 5,900.61 -0.46%
FTSE 250 (MCX) 17,242.42 -0.74%
techMARK (TASX) 3,746.98 -0.52%
FTSE 100 - Risers
Ferguson (FERG) 7,858.00p 5.96%
B&M European Value Retail S.A. (DI) (BME) 512.80p 4.57%
National Grid (NG.) 880.60p 3.43%
Mondi (MNDI) 1,646.50p 2.81%
GVC Holdings (GVC) 1,000.50p 2.57%
Smurfit Kappa Group (SKG) 3,044.00p 2.28%
Fresnillo (FRES) 1,200.00p 2.26%
SSE (SSE) 1,211.50p 1.85%
Ashtead Group (AHT) 2,819.00p 1.66%
Standard Life Aberdeen (SLA) 224.30p 1.49%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 144.00p -3.52%
HSBC Holdings (HSBA) 298.15p -3.37%
International Consolidated Airlines Group SA (CDI) (IAG) 91.74p -2.82%
Land Securities Group (LAND) 514.00p -2.82%
Standard Chartered (STAN) 352.40p -2.65%
British Land Company (BLND) 336.80p -2.57%
Homeserve (HSV) 1,232.00p -2.45%
Legal & General Group (LGEN) 185.30p -1.93%
NATWEST GROUP PLC ORD 100P (NWG) 105.25p -1.91%
Aviva (AV.) 288.00p -1.87%
FTSE 250 - Risers
888 Holdings (888) 211.00p 2.93%
Hochschild Mining (HOC) 216.80p 2.85%
Fisher (James) & Sons (FSJ) 1,138.00p 2.34%
Renishaw (RSW) 5,550.00p 2.12%
Future (FUTR) 1,936.00p 2.00%
William Hill (WMH) 280.70p 1.74%
Mediclinic International (MDC) 271.00p 1.73%
Pets at Home Group (PETS) 402.60p 1.72%
AO World (AO.) 213.50p 1.67%
Carnival (CCL) 982.40p 1.59%
FTSE 250 - Fallers
Greggs (GRG) 1,142.00p -6.32%
Shaftesbury (SHB) 485.80p -5.58%
SSP Group (SSPG) 193.60p -5.56%
Vectura Group (VEC) 105.80p -4.51%
Network International Holdings (NETW) 260.80p -4.05%
Chemring Group (CHG) 229.50p -3.97%
Rank Group (RNK) 98.20p -3.73%
Petrofac Ltd. (PFC) 110.15p -3.67%
PureTech Health (PRTC) 261.50p -3.33%
FirstGroup (FGP) 38.80p -3.15%
