London stocks slip as investors await details on post-lockdown curbs

London stocks fell on Thursday as a resurgence in coronavirus cases fuelled concerns about a swift economic recovery, while investors maintained a cautious stance awaiting details on post-lockdown restrictions in England.

The blue-chip FTSE 100 index slipped 0.5%, dragged down by energy, banking and aero stocks, while the domestically focussed mid-cap FTSE 250 lost 0.7%.

Health secretary Matt Hancock will tell parliament later in the day which of three tiers, ranging from the lowest at tier 1 to the highest at 3, each English local authority will fall under when the national lockdown ends next week.

The United Kingdom recorded 18,213 new coronavirus infections on Wednesday and 696 deaths, its highest daily death toll since May 5.

“There is a tug of war between the short-term uncertainty, what is going to be a tough winter from an economic standpoint and the potential for a much stronger and sustained recovery, if we get mass vaccination and the pandemic is brought under control at some point next year,” said Emmanuel Cau, head of European equity strategy at Barclays (LON:BARC).

“The risk of on-off lockdown is still high and in the short term, we will likely see more challenges before getting back to normality.”

While positive vaccine-related headlines have helped British stocks gain this month, they have still underperformed global peers due to uncertainty over Brexit negotiations, as the end-of-year deadline for a trade deal looms.

Britain and the European Union can clinch a Brexit trade deal and the shape of one is clear, but London will not sign up to an accord at any cost, Finance Minister Rishi Sunak said.

In company news, Amigo Holdings Plc rose 1.3% even after the subprime lender reported a 36.5% slump in first-half revenue and flagged “material uncertainty” about its future operations.

Bodycote Plc (LON:BOY) slipped 5.3% after reporting a fall in group revenue and saying it would carry out another restructuring, as it expects weakness in the civil aerospace market.

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