(Alliance News) - Stock prices in London opened lower on Monday on renewed tensions between the US and China sparking demand for safe-haven assets as trade fears return.
The large-cap FTSE 100 index was down 42.46 points, or 0.7%, at 5,720.60 early Monday. The mid-cap FTSE 250 index was up 271.78 points, or 1.7%, at 15,876.52. The AIM All-Share index was down 0.1% at 796.59.
The Cboe UK 100 index was down 0.8% at 9,669.15. The Cboe 250 was down 0.9% at 13,786.25 and the Cboe Small Companies was flat at 8,998.68.
In mainland Europe, the CAC 40 in Paris was down 3.3%, while the DAX 30 in Frankfurt was down 2.7% early Monday. Financial markets on the continent reopened on Monday after being closed on Friday for Labour Day.
Claims by US President Donald Trump and Secretary of State Mike Pompeo that the disease started in a lab in Wuhan, and that those responsible would be held to account, overshadowed a further slowing of infections and deaths from Covid-19.
Trump, increasingly critical of China's management of the first outbreak in the city of Wuhan in December, claims to have proof it started in a Chinese laboratory. Scientists believe the virus jumped from animals to humans, after emerging in China, possibly from a market in Wuhan selling exotic animals for meat. China denies the US claims, and the US director of National Intelligence office has said analysts are still examining the exact origin of the outbreak.
"The old adage 'Sell in May and come back on St Legers Day' isn't looking like such bad advice so far. After a steep sell-off in stocks on Friday, renewed tensions between US and China is dragging on risk sentiment again at the start of the week, dragging on stocks and boosting safe-haven flows," commented City Index analyst Fiona Cincotta.
In the FTSE 100, gold miners Polymetal International and Fresnillo were up 0.9% and 0.3%n respectively, tracking spot gold prices higher, as demand for the safe-haven asset increased.
The precious metal was quoted at USD1,704.28 an ounce Monday morning, up from USD1,685.70 at the London close Friday.
In the FTSE 250, AG Barr was up 3.5% after Liberum raised the soft drinks maker to Buy from Hold.
At the other end of the midcaps, Tate & Lyle was down 3.7% after the sweeteners and food ingredients maker said lockdowns across core US and European markets have resulted in significant changes in demand.
Primary Products volume in April was greatly hurt by the first full month of lockdown in the US. Bulk sweetener volume was 26% lower, while industrial starch volume was 9% lower. Commodities also were also affected as ethanol prices decreased sharply.
However, the company said it expects to report annual results for the financial year ended March 31, before the worse effects of the health crisis, slightly ahead of expectations.
The Hang Seng index in Hong Kong is down 3.8% Monday. Financial markets in Japan are closed on Monday for the Nature Day holiday, while markets in Shanghai are closed for the continuation of the Labour Day holiday.
The pound was quoted at USD1.2464 Monday morning, down from USD1.2593 at the London equities close Friday.
UK Prime Minister Boris Johnson will describe the race to develop a coronavirus vaccine as the "most urgent shared endeavour of our lifetimes" as he calls on nations to "pull together" in response to the pandemic.
The PM is expected to tell an online pledging conference - co-hosted by the UK and eight other countries and organisations - that the sooner states share their expertise the faster scientists will succeed in defeating the disease.
Johnson is now not expected to set out a road map on how the UK will exit lockdown until Sunday - three days after the government must review the current restrictions.
The euro was quoted at USD1.0935, soft from USD1.0955. Against the yen, the dollar was quoted at JPY106.72, down from JPY107.16.
Brent oil was quoted at USD26.28 a barrel Monday morning, lower than USD26.68 late Friday.
The economic events calendar on Monday has a string manufacturing PMI readings from Europe.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Tate & Lyle (TATE)
Barr (A.G.) (BAG)
Fresnillo (FRES)