The FTSE 100 fell in afternoon trading after a choppy morning session, while US stocks were mixed amid rising coronavirus cases and some worrying economic data.
London’s main stock index was last down 0.8 per cent at 5,745 points, having also fallen yesterday.
European stocks were also firmly in the red, with the continent-wide Stoxx 600 down 0.8 per cent. It was heading for its worst close since June.
It followed a dire day for markets yesterday when US indices tumbled between 1.6 and 2.3 per cent. The falls marked the worst sell-off in a month as investors worried about Covid and stimulus.
“With just a week before the US election, investors find it very hard to believe that any accord on further fiscal stimulus could be reached beforehand,” said Charalambos Pissouros, senior market analyst at JFD Group.
“This, combined with the fast spreading of the coronavirus, keeps sentiment subdued.”
HSBC helps limit FTSE 100 losses
HSBC shares rose four per cent – making it the biggest riser on the FTSE 100 today – after it beat profit expectations in the third quarter.
The bank posted a quarterly pre-tax profit of $3.1bn (£2.4bn). That was a 36 per cent drop year-on-year but was much higher than predictions of $2.1bn.
HSBC said it would consider paying a “conservative” dividend following its better-than-expected performance. That helped it surge, and gave support to Barclays and Natwest shares.
Nonetheless, residual worries about coronavirus kept a lid on market gains. The CBI released a survey that showed UK retail sales dropped in October after new restrictions were put in place. The survey outlined the challenges to the economy.
Chris Beauchamp, chief market analyst at IG, said he thought today’s selling was “more measured” than yesterday. He said yesterday had “the air of a disorderly rush for the exit”.
“But with so much news still to come the desire to stand aside will be strong for many,” he said. He added that left “markets at risk of further short-term volatility”.
US stocks mixed while Europe falls again
The Dax followed the FTSE 100 lower, falling 0.7 per cent. France’s CAC 40 was down 1.5 per cent.
On Wall Street, the S&P 500 was down 0.1 per cent while the Dow Jones industrial average fell 0.4 per cent. The Nasdaq was up 0.5 per cent, however.
Sentiment was subdued after a survey showed that US consumer confidence unexpectedly fell in October.
Economists have warned that new coronavirus restrictions risk will hit countries’ economic recovery.
Daniela Ordonez, Europe economist at Oxford Economics, said there is now “a material risk of a new GDP fall in Q4 in several countries”.
She said those that “rely heavily on social services or those that will reintroduce the hardest restrictions” are likely to be the worst off.