US stocks tumbled and the FTSE 100 was lower after US President Donald Trump tested positive for coronavirus just a month before the presidential election.
Wall Street’s S&P 500 index was 0.6 per cent lower in early trading, having recovered some ground after a sharp fall at the open.
The Dow Jones was down 0.5 per cent and the tech-heavy Nasdaq had shed 0.9 per cent.
London’s FTSE 100 index was down 0.3 per cent in afternoon trading to 5,859 points. It had recovered slightly after falling as much as one per cent in the morning session.
On Friday morning Trump tweeted: “Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!”
The positive test for Trump and his wife Melania has rocked an already chaotic election.
Craig Erlam, senior market analyst at currency firm Oanda, said: “It’s a bit of a cliche but the markets do hate uncertainty and today is evident of that.
“We don’t even know what impact this will have on Trump’s health, let alone the implications for the election next month or his ability to campaign in the interim.”
France’s CAC 40 fell 0.5 per cent and the German Dax was down 0.8. The continent-wide Stoxx 600 was 0.2 per cent lower.
FTSE 100 set for disappointing week
The FTSE 100’s fall meant Britain’s main stock index was set to finish the week flat. It had fallen for the two previous weeks.
The FTSE 250 of mid-cap stocks was down 0.4 per cent. Rising coronavirus cases, as well as global events, have weighed down both indices.
Jet-engine maker Rolls Royce lead the fall on the FTSE 100, sliding 7.7 per cent. It was hit after more countries were added to the UK’s travel quarantine list.
British Airways-owner IAG dropped 2.7 per cent. On the FTSE 250, Easyjet, Tui and cruise group Carnival fell more than 2.5 per cent.
Richard Hunter, head of markets at Interactive Investor, said: “The FTSE 100 remains fettered by investor insouciance and bleak prospects for the UK economy as a whole.”
“Further countries being added to the UK quarantine list alongside targeted local lockdowns have done little to lighten the mood.”
US investors focus on Trump and job figures
The mood on Wall Street was grim after worse than expected jobs figures added to worries over Trump’s positive coronavirus test.
More than 660,000 Americans found work last month, the Bureau of Labor Statistics (BLS) said. However, the jobs growth undershot the 850,000 increase predicted by economists in a Reuters poll. And it was the smallest increase since the jobs recovery started in May.
Seema Shah, chief strategist at Principal Global Investors, said: “Economic scarring is likely to become more apparent in the fourth quarter as more companies finally start to throw in the towel, reporting closures and job cuts.”
Shah said that “the struggles will become more widespread and evident” as there is “still no sign of an additional fiscal stimulus package”.
The fall in stocks has helped so-called safe haven assets. The dollar was up 0.1 per cent against a basket of other currencies. Gold was roughly flat at $1,905 an ounce, after recovering from an earlier fall.
Richard Kelly, head of global strategy at TD securities, said: “Looking forward, we expect the dollar to remain highly sensitive to risky asset prices, but shifts in polling will also exert a strong influence as 3 November approaches.”
Jakob Ekholdt Christensen, chief analyst at Danske Bank, said: “The big question is how ill [Trump] will become and to what extent it will affect his campaigning efforts for the US presidential election.
“Another question is whether other members of his administration have been infected. The uncertainty is hurting risk sentiment.”