London markets slip as downturn in US sentiment hits European stocks

The London markets slumped into the red after a poor start to trading in the US weighed down on European sentiment.

Dr Anthony Fauci’s warning that there is doubt that a vaccine will be developed by the end of October took wind out of the bull’s sails in the US and prompted wide selling in Europe.

The FTSE 100 closed 90.09 points lower at 5,850.86 at the end of trading on Thursday.

Connor Campbell, financial analyst at Spreadex, said: “In a sharp turnaround from this morning, every major Western index turned negative on Thursday.

“After having its best day since mid-July last night, surging 450 points on a combination of relatively unfounded vaccine and stimulus speculation, the Dow Jones suffered a setback en route to its record highs.

“With the US open souring the tone of trading, and little of their own to celebrate, the FTSE and Dax swung into the red.”

The Dow Jones, the S&P and Nasdaq all slumped as traders turned their backs on US tech stocks, which had been particularly buoyant in recent months.

In Europe, the FTSE and Dax were the worst hit by negativity in the US, as the CAC was buoyed by the unveiling of a 100 billion euro stimulus plan in France.

The German Dax decreased by 1.4%, while the French Cac moved 0.44% lower.

Meanwhile, sterling slipped lower against a rise in the dollar and a dip in sentiment after the UK services PMI figure for August came in below the initial flash reading.

The pound fell by 0.84% versus the US dollar at 1.327 and was down 0.23% against the euro at 1.121.

In company news, energy giant SSE saw shares dip after Britain’s energy regulator fined it more than £2 million for a 2016 blunder which is likely to have pushed up wholesale electricity costs.

Ofgem said it would send a “strong message” to energy producers that they must share timely information with others on the market.

Shares in SSE closed 30p lower at 1,230p as a result.

Elsewhere, Revolution Bars shares lifted after the chain said it smashed expectations last month after the Government’s pledge to give diners half-price meals made people flock to its sites.

It closed 0.5p higher at 15p after it said sales on Eat Out to Help Out days were 188.4% of the equivalent days last year.

Jet2 airline owner Dart Group nudged 11p higher to 688.5p after it said bookings to date for summer 2021 are “encouraging”.

The price of oil recovered to move into the green after traders shrugged off early demand concerns.

The price of a barrel of Brent crude oil increased by 0.87% to 43.93 US dollars.

The biggest risers on the FTSE 100 were Melrose up 12.65p at 113.15p; IAG up 12.9p at 215.8p; ITV up 2.92p at 62p; Compass up 45p at 1,272p and British Land up 8.2p at 358.8p.

The biggest fallers were Scottish Mortgages down 61.5p at 907.5p; Ocado down 152p at 2,372p; BHP down 101.2p; Intermediate Capital Group down 76p at 1,263p and Evraz down 15.5p at 319p.