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London markets were full of gloom on Wednesday, as investors weighed up grim COVID-19 headlines and as U.S. markets fell ahead of a Federal Reserve decision.
The FTSE 100 index UKX, -1.32% fell 1.8% to 6,534.62, with the pound GBPUSD, -0.25% also under pressure, down 0.5% against the dollar to $1.36820. That is as Wall Street stocks DJIA, -1.03% also dropped, as investors braced for big technology earnings from Apple AAPL, -0.08% and Facebook FB, -2.12%, and electric-car maker Tesla TSLA, +0.59%.
U.S. markets are also waiting on a decision from the Fed, followed by a press conference with Chair Jerome Powell.
U.K. investors were weighing up some downbeat headlines for COVID-19, with the country the first in Europe to reach 100,000 deaths from the disease. The government on Wednesday is expected to announce restrictions for travelers entering the country from high risk areas, such as South America, southern Africa and Portugal, as it battles against the threat of new variants.
Investors are struggling to “judge whether restrictions might be tightened in the short term and when in the medium term they might start to be eased,” said AJ Bell’s investment director Russ Mould, in a note to clients.
Read: Boris Johnson ‘deeply sorry for every life lost’ as U.K. passes 100,000 COVID-19 deaths
Among stocks on the move, the mining sector was under pressure, with heavily weighted shares of Rio Tinto RIO, -2.52% RIO, -2.37% down 3.5%, BHP Group BHP, -1.99% BHP, -2.35% off 3.3%, and shares of Anglo American AAL, -4.88% down 6%. Major oil companies were also falling, with shares of Royal Dutch Shell RDSA, -1.26% RDS.A, -0.57% and BP BP, -1.65% BP, -0.52% down over 3% each.
Among smaller companies, shares of Scapa Group SCPA, +25.42% surged 25%, after the adhesive and bonding specialist received a 210-pence cash bid worth £402.9 million from U.S.-based product engineering company Schweitzer-Mauduit International SWM, -4.15%.
“The bid may provide succor to bulls of U.K. equities more generally, as well as Scapa’s shareholders. Schweitzer-Mauduit is the latest trade or financial buyer to launch a bid for a publicly owned company, to suggest that there could be some value to be had from the U.K. stock market,” said Mould.
Other gainers in London included those that have been the most shorted, echoing some moves across the Atlantic with videogames retailer GameStop GME, +155.00% and movie-theater chain AMC Entertainment AMC, +220.77%. Shares of movie-theater chain Cineworld CINE, +9.24% and education-software publisher Pearson PSON, +11.29%, both heavy shorts according to ShortTracker, jumped 6% and 12%, respectively, the top gainers for the FTSE 100.
Read: GameStop inspired? Some of Europe’s most heavily shorted stocks are soaring
