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23 Mar 2021 | 11:00

London midday: Stocks maintain losses as third wave concerns, travel ban weigh

(Sharecast News) - London stocks were still a little lower by midday on Tuesday, with travel and leisure issues under pressure ahead of tighter border restrictions, while concerns about a third coronavirus wave in Europe and tensions between China and the West also weighed on sentiment. The FTSE 100 was down 0.3% at 6,705.67.

Spreadex analyst Connor Campbell said: "Though other European countries have extended their lockdowns or imposed new restrictions in the last week or two, perhaps none have done it with as chilling words as Angela Merkel.

"Extending Germany's partial lockdown over the Easter period, Merkel stated that the country was in a 'very serious' situation, going as far to say that it is 'basically in a new pandemic' thanks to the new found dominance of the British variant.

"And Britain should perhaps prepare itself for similar news. After all, yesterday Boris Johnson warned that we would feel the effects of the European third wave 'in due course'."

Tensions between China and the West were also in focus after the UK, the EU, the US and Canada all imposed sanctions on senior Chinese officials involved in the mass internment of Uighur Muslims in Xinjiang province. In retaliation, China slapped sanctions on several EU officials for "harming" the country's sovereignty.

On home shores, figures released earlier by the Office for National Statistics showed the unemployment rate unexpectedly ticked lower in the three months to January. The unemployment rate fell to 5% from 5.1% the month before, versus expectations of 5.2% as the government's furlough scheme continues to protect jobs during the pandemic.

Still, the rate remains 1.1 percentage points higher than a year ago and 0.1 percentage points higher than the previous quarter.

The data showed the number of job vacancies in December 2020 to February 2021 was 26.8% lower than a year ago. This is an improvement on summer 2020, when vacancies were down nearly 60% year-on-year. However, the rate of improvement has slowed in the past few months.

"Further restrictions and national lockdowns recently have had an impact on vacancies in some industries more than others, most notably the accommodation and food services industry," the ONS said.

Ruth Gregory, senior UK economist at Capital Economics, said: "We still expect the unemployment rate to rise further to a peak of 6.0% by early 2022, but that would be a much better result than most feared only a few months ago."

In equity markets, travel and leisure stocks slumped as the foreign travel ban was extended until July, with anyone attempting to leave England facing a £5,000 fine as of next week. British Airways owner IAG, engine maker Rolls-Royce, Upper Crust and Ritazza owner SSP, Carnival, easyJet, Tui and WH Smith were all sharply lower.

Cineworld fell after saying its US Regal theatres chain will reopen from Covid lockdown in April for the first time in six months, with a UK restart slated for May as it announced a screening deal with Warner Bros.

Energy shares were also on the back foot, with BP, Shell and Tullow Oil all lower as oil prices slid.

Elsewhere, B&Q owner Kingfisher was knocked lower by a downgrade to 'neutral' at Goldman Sachs.

AstraZeneca lost ground after a US health agency questioned the company's efficacy data on its Covid-19 vaccine, with concerns raised that recently released results from clinical trials may include outdated information.

On the upside, Crest Nicholson rallied after the housebuilder lifted its full-year profit expectations as it hailed a "resilient" UK housing market. The company said it now expects full-year adjusted pre-tax profit of around £85m, ahead of consensus expectations of £74.3m. Other housebuilders followed suit, with Barratt, Taylor Wimpey, Bellway and Redrow all higher.

Market Movers

FTSE 100 (UKX) 6,705.67 -0.30% FTSE 250 (MCX) 21,387.11 -0.32% techMARK (TASX) 4,211.73 0.00%

FTSE 100 - Risers

Severn Trent (SVT) 2,292.00p 2.60% United Utilities Group (UU.) 908.40p 2.48% Bunzl (BNZL) 2,354.00p 2.48% Reckitt Benckiser Group (RB.) 6,644.00p 2.40% SEGRO (SGRO) 928.60p 2.38% BT Group (BT.A) 148.95p 2.23% SSE (SSE) 1,458.00p 2.21% Imperial Brands (IMB) 1,504.00p 2.04% Rightmove (RMV) 598.60p 1.98% Vodafone Group (VOD) 135.06p 1.81%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 107.15p -4.24% International Consolidated Airlines Group SA (CDI) (IAG) 187.70p -4.21% BP (BP.) 296.50p -3.50% JD Sports Fashion (JD.) 810.20p -3.29% Informa (INF) 571.60p -3.02% Royal Dutch Shell 'A' (RDSA) 1,446.00p -2.61% Weir Group (WEIR) 1,735.00p -2.61% Antofagasta (ANTO) 1,677.50p -2.56% Royal Dutch Shell 'B' (RDSB) 1,376.60p -2.55% Associated British Foods (ABF) 2,344.00p -2.17%

FTSE 250 - Risers

Crest Nicholson Holdings (CRST) 390.80p 4.16% Hammerson (HMSO) 32.62p 3.89% Telecom Plus (TEP) 1,232.00p 3.53% Helios Towers (HTWS) 164.60p 3.52% Bellway (BWY) 3,484.00p 2.59% Dr. Martens (DOCS) 486.40p 2.40% Pennon Group (PNN) 996.00p 2.22% Biffa (BIFF) 267.00p 2.10% Direct Line Insurance Group (DLG) 312.50p 1.79% Vectura Group (VEC) 114.00p 1.79%

FTSE 250 - Fallers

Tullow Oil (TLW) 48.03p -10.22% SSP Group (SSPG) 318.20p -6.41% TUI AG Reg Shs (DI) (TUI) 355.90p -5.85% Cineworld Group (CINE) 105.70p -5.03% easyJet (EZJ) 900.00p -4.38% Carnival (CCL) 1,595.00p -3.92% Frasers Group (FRAS) 479.60p -3.69% Capita (CPI) 45.12p -3.51% Wood Group (John) (WG.) 271.30p -3.28% Aston Martin Lagonda Global Holdings (AML) 1,992.50p -3.28%
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