Europe: FTSE 100 retreats after eight-day rally as recovery concerns weigh

[BENGALURU] London's FTSE 100 slipped on Thursday after rallying more than 7 per cent this week as slower-than-expected domestic economic growth in September underscored concerns about a faltering recovery from the coronavirus-driven recession.

The blue-chip FTSE 100 index closed down 0.7 per cent, with engineering company Rolls-Royce Holdings Plc tumbling 8.6 per cent as it raised 2 billion pounds from a rights issue after shareholders signed up for 94 per cent of the new shares and the rest were sold via a rump placing.

Bank and energy stocks were among the biggest draggers after having surged more than 14 per cent and 17 per cent respectively this week.

After rising as much as 0.5 per cent in afternoon trade, the domestically focused mid-cap FTSE 250 ended 0.2 per cent lower as official data showed Britain's economy grew by a slower than expected 1.1 per cent in September from August - even before the latest Covid-19 lockdown.

"It's going to continue to be a stuttered recovery until a vaccine is widely available and the next couple of months are going to be extremely challenging in managing the virus," said Craig Erlam, senior market analyst at Oanda.

UK markets, however, have sharply rebounded this month from a 5 per cent fall in October as a slew of stimulus measures and positive vaccine data supported hopes for a sooner-than-expected economic rebound.

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Britain recorded 33,470 new coronavirus cases on Thursday, with a Imperial College study saying English infections doubled in October ahead of the reintroduction of a national lockdown.

On the Brexit front, Britain has been working hard throughout the trade negotiations with the European Union to secure a deal, a spokesman for Prime Minister Boris Johnson said after the Irish prime minister commented that London needed to"knuckle down".

Luxury brand Burberry Group Plc reversed course to end 2.3 per cent lower even after its sales returned to growth in October.

Insurer Legal & General Group Plc fell 1.9 per cent after it kept its final dividend payment for 2020 flat.

Specialty chemicals maker Croda International slipped 2.8 per cent after Barclays downgraded the stock to"underweight".

REUTERS