Monday 12 October 2020 6:49 pm

FTSE 100 closes lower amid new restrictions but US stocks rise

The FTSE 100 closed lower after Prime Minister Boris Johnson introduced a new three-tier Covid alert system but US stocks rose as investors hoped for more stimulus.

London’s blue-chip index ended the day 0.3 per cent lower at 6,001 points. The mid-cap FTSE 250 rose 0.5 per cent, however.

Read more: Government set to unveil new UK coronavirus restrictions

Wall Street shares rose sharply, however. The tech-heavy Nasdaq was up 2.8 per cent while the S&P 500 climbed 1.8 per cent.

In Europe, Germany’s Dax and France’s CAC 40 both finished 0.7 per cent higher. The continent-wide Stoxx 600 rose 0.8 per cent.

Energy shares weigh on FTSE 100

Oil majors weighed on the FTSE 100, with energy prices falling in response to expected lower demand amid rising coronavirus cases.

Brent crude oil fell 2.9 per cent to $41.50 per barrel. WTI crude slid 3.2 per cent to $39.20 a barrel.

Shell’s A shares fell 2.6 per cent, while its B shares fell 2.3 per cent. BP slipped two per cent.

“The FTSE 100 is underperforming because of the fall in oil and mining stocks. BP, Royal Dutch Shell, Rio Tinto and Glencore are offside,” said David Madden, market analyst at CMC Markets.

Tech stocks boost Wall Street

The Nasdaq surged after the open in New York, quickly gaining as optimism over the possibility of a stimulus package grew. 

Apple’s share price rose over six per cent ahead of a special event on Tuesday. Most analysts believe it will be used to unveil the new iPhone with 5G capabilities.

Over the weekend, the Trump administration called on Congress to pass a stripped-down coronavirus relief bill as negotiations on a broader package ran into resistance.

Read more: Boris Johnson tries to court Biden as Number 10 falls off Trump train

Growing expectations of a Democratic victory in next month’s presidential election as well as bets of fresh federal aid have sent Wall Street’s main indices to one-month highs.

Rupert Thompson, chief investment officer at Kingswood, said: “A decisive victory, particularly if it includes the Democrats gaining control of the Senate, would… mean it would be easier for Biden to implement his plans for a sizeable fiscal stimulus package early next year.”