July 3, 2020 / 7:32 AM / a month ago

UK stocks slide on COVID-19 concerns, FTSE 100 erases weekly gains

(Reuters) - UK stocks ended lower on Friday, with the FTSE 100 index wiping out gains for the week as a record surge in U.S. COVID-19 cases made investors question the chance of a swift global economic recovery.

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

The blue-chip FTSE 100 .FTSE slid 1.3%, with BP Plc (BP.L) and Royal Dutch Shell Plc (RDSa.L) among the biggest drags, as the new infections raised the spectre of further lockdowns and hit oil prices.

The domestically-focussed FTSE 250 .FTMC fell 0.4% on the day, but still held onto a weekly gain.

“Stocks enjoyed a big rally yesterday on the back of the optimism about a possible COVID-19 vaccine but all of the gains the FTSE 100 made yesterday have been lost today on renewed health fears,” said David Madden, market analyst at CMC Markets UK.

British stocks had opened higher on Friday as data showed China’s services sector expanded at its fastest pace in over a decade last month.

At home, data showed a historic slump across British businesses levelled off last month as some of the economy reopened from the coronavirus lockdown.

UK stock markets have rebounded sharply from a virus-driven crash in March, helped by historic stimulus and, more recently, data that had raised hopes that the worst of the pandemic’s economic damage might be over.

But analysts have warned of another sell-off in financial markets as business sentiment remains fragile. Data on Friday showed about 46% of UK manufacturers are expecting to lay off workers over the next six months.

Retailer Next (NXT.L) fell 4.6% after Goldman Sachs downgraded the stock to “sell”, while AB Foods (ABF.L) slipped 1.8% after the U.S. bank cut its rating on the stock to “neutral”.

Land Securities (LAND.L) rose 0.5% after it said like-for-like sales at its shopping centres was at 80% of the level achieved last year in the two weeks since non-essential retail reopened in England.

Reporting by Shreyashi Sanyal and Sagarika Jaisinghani in Bengaluru; editing by Uttaresh.V and Andrew Heavens

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