July 7, 2020 / 7:32 AM / a month ago

London stocks slip from near two-week highs as COVID-19 fears weigh

(Reuters) - UK shares slipped from near two-week highs on Tuesday as a surge in U.S. coronavirus cases turned investors away from riskier trades, while Halfords tumbled after a bleak profit expectation.

FILE PHOTO: Construction work near the River Thames on the Greenwich Peninsula is seen next to the O2 and Canary Wharf financial district in London, Britain February 12, 2018. Picture taken through glass from the Emirates Air Line cable car. REUTERS/Russell Boyce

The motor and cycling products retailer plunged 14.1% and posted its worst day in more than three months as it expects a profit scenario ranging from zero to a pretax loss of 10 million pounds ($12.5 million). [nL8N2EE11I]

“The outlook is very uncertain overall, the priority is going to be keeping costs down, and customers safe, as has become a bit of a mantra across the retail sector more generally,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

The export-laden FTSE 100 fell 1.5% wiping out most of Monday’s gains, while British mid-caps dropped 1%, with banks leading declines.

“Investors are getting back to the reality of rising coronavirus cases, which is causing some caution and fear to be back following yesterday’s rally,” said David Madden, analyst at CMC Markets in London.

Aggressive global stimulus has partly powered a rebound in UK stock markets since a coronavirus-driven crash in March, but the pace of gains has slowed in the past two months with economic figures still on shaky ground.

Data on Tuesday showed British house prices fell for a fourth month in a row in June, the longest run of monthly declines since 2010.

Newspaper publisher Reach tumbled 14.2%, logging its worst day since late March as it said it would cut about 550 jobs — 12% of its workforce — after the COVID-19 pandemic hit circulation and advertising.

Premier Inn owner Whitbread fell 5.5% on reporting an 80% plunge in first-quarter sales as the COVID-19 lockdown shuttered most of its hotels in Britain and Germany.

Online trading platform Plus500 rose 3.3% after saying revenue in the first half nearly quadrupled.

Reporting by Shreyashi Sanyal, Shashank Nayar and Sagarika Jaisinghani in Bengaluru; editing by Uttaresh.V and Ken Ferris

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