London stocks dip as pandemic damage grows

(Reuters) – The UK’s FTSE 100 retreated on Wednesday as data showed inflation fell to its lowest since August 2016 in the latest economic blow from the coronavirus outbreak, with investors also digesting another mixed bag of quarterly earnings reports.

FILE PHOTO: A red London bus passes the Stock Exchange in London, Britain, February 9, 2011. REUTERS/Luke MacGregor/File Photo

The blue-chip FTSE 100 .FTSE was down 0.2%, with the banking index .FTNMX8350 tumbling 1.2% on increased bets of negative interest rates.

The mid-cap FTSE 250 .FTMC lost 0.3%, snapping a three-day winning streak as a report also questioned positive data from an early-stage trial of a potential coronavirus vaccine. [MKTS/GLOB]

“The market is in no-man’s land,” said Graham Secker, chief European equity strategist at Morgan Stanley.

“With not a whole lot of negative news, the market will not necessarily go down a lot, but at the same time it’s not obvious what the new catalyst is to make it go materially higher other than medical advancement on the coronavirus.”

The FTSE 100 has now recovered about 22% from its March lows as governments and central banks launched historic stimulus measures to aid businesses and families impacted by a near standstill in activity due to the pandemic.

Britain’s justice minister said on Wednesday the government will look at how it can help employees of engine maker Rolls-Royce (RR.L) after it said would cut at least 9,000 jobs and could shut some factories. Its shares fell 3.2% in morning trading.

UK homebuilder Vistry Group Plc (VTYV.L) shed 3.2% on forecasting more job cuts as it consolidates the operations of Bovis Homes and construction company Galliford Try’s (GFRD.L) residential units.

But Playtech Plc (PTEC.L) surged 3.3% after posting a jump in first-quarter profit as its financial trading division benefited from increased market volatility and trading volumes.

Retailer Marks & Spencer Group Plc (MKS.L) rose 4.5% as it said it would accelerate its latest turnaround programme after reporting a 21% fall in annual profit.

Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Shounak Dasgupta

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