July 8, 2020 / 7:27 AM / a month ago

London shares fall for second day as virus concerns dull rebound hopes

FILE PHOTO: A broker looks at financial information on computer screens on the IG Index trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson

(Reuters) - London shares slid for the second straight session on Wednesday as another jump in global COVID-19 cases overshadowed hopes of an economic rebound, even as stimulus poured in to help steer the economy away from an unemployment crisis.

The blue-chip FTSE 100 .FTSE slipped 0.6% and the mid-cap FTSE 250 .FTMC fell 0.9%, with banks .FTNMX8350 and transport .FTNMX2770 indexes leading declines.

Finance Minister Rishi Sunak promised an additional 30 billion pounds ($38 billion) on Wednesday, funnelling money to employers, homebuyers and hospitality firms to drive a recovery.

The move was initially well-received by investors but concerns over surging coronavirus cases governed sentiment to the day’s close. However, housebuilders .FTNMX3720 rose 0.5%, from the announcement of stamp duty cuts.

“The tax cut should provide a much-needed shot in the arm for the property industry, which saw a complete shutdown during lockdown and is now plagued with worries about falling house prices,” Laura Suter, personal finance analyst at AJ Bell, said.

FirstGroup (FGP.L) tumbled 23.1% to its lowest in more than three months after the bus and rail operator warned its future was in doubt after a collapse in passenger numbers led to a 153 million pounds ($192 million) loss in the year to March.

A raft of stimulus helped the FTSE 100 rebound about 9% in the second quarter after a coronavirus-driven crash in March, but the export-laden index has struggled to build on those gains in July given forecasts of a slower-than-expected post-pandemic rebound and simmering U.S.-China tensions.

HSBC (HSBA.L) fell 3.4% after a report said U.S. President Donald Trump’s top advisers were considering proposals to undermine the Hong Kong currency’s peg to the U.S. dollar. The proposal could limit the ability of Hong Kong banks to buy dollars.

Economic data on Wednesday showed the collapse in Britain’s labour market eased only slightly in June.

Reporting by Shreyashi Sanyal and Shashank Nayar in Bengaluru; Additional reporting by Sagarika Jaisinghani; editing by Uttaresh.V and Barbara Lewis

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