London shares started the day’s trading higher but a dip in the share value of grocery groups, fashion chains, banks and property firms capped the FTSE’s progress.
A mixture of service sector companies is lifting the index but the rally feels like a house of cards. Although many analysts point to the early reopening in Texas and Florida as the main culprits of the current record rise in cases in those two states, which no doubt they are, the excitement of some citizens after being cooped up indoors for a few months is something that is being faced in every region that is reopening, including the UK. Pictures of busy UK beaches during the current heatwave are fanning concerns over a second wave and some cautiousness.
But for all the enthusiastic sun-bathers there are also the more cautious consumers. As UK pubs and bars start wiping off the dust ahead of the reopening next weekend owners worry that the consumer will remain fearful and come only in small numbers, not only because of health precautions but also the hassle that will be involved including leaving contact details and records of customer visits.
Owners like pub and hotel group Marston’s, which dipped more than 6% in early trade, are bracing themselves for a smaller number of visitors and potentially for the closure of some of the least popular pubs. Major pub group JD Wetherspoon’s share price is holding up better as it is the only chain that has committed to opening all of its venues in July.
The cost of the pandemic to retail businesses is continuing to show every day. UK shopping centre owner Intu is heading into administration after it failed to agree on a debt deal; shares are trading down 48% this morning.
So far, services and support companies are holding up best, notably Rentokil, Smiths Group and Smurfit Kappa.