London stocks retreat after rallying on recovery optimism


UK shares dipped from three-month highs on Thursday following strong gains earlier in the week on bets of a rebound in post-coronavirus economic activity, while miners tracked a fall in commodity prices.

The blue-chip index .FTSE edged down about 0.1%, with basic materials and financial stocks among the biggest drags. Gains for AstraZeneca (AZN.L) and industrials stocks capped further declines.

The mid-cap FTSE 250 .FTMC also fell 0.1% and was set to snap a three-day winning streak, with real estate stocks .FTUB8600, life insurers .FTNMX8570 and banks .FTNMX8350 among the biggest decliners.

Elsewhere in Europe, investors awaited a central bank meeting where policymakers are expected to provide more aid for some of the worst-hit euro zone economies. [.EU]

“Market participants have taken some cash off the table given the strong run and ahead of the ECB meet today,” said David Madden, markets analyst at CMC Markets.

Earlier this week, UK stock markets joined a global rally as latest economic data improved from the worst readings during the COVID-19 pandemic, with the FTSE 100 now only 17% below its January record high. [MKTS/GLOB]

Figures on Thursday showed British car sales edged up in May from 1946-lows, but still remained almost 90% below their level a year earlier as coronavirus-induced curbs limited sales.

“The bet is for a V-shaped rebound for (stimulus)-infused markets, which is not necessarily dependent on a corresponding recovery for the economy,” Mizuho Bank analysts wrote in a note.

Luxury carmaker Aston Martin (AML.L) shed 2.7% after announcing plans to shed up to 500 jobs as it seeks to bring its cost base into line with reduced sports car production levels.

Car dealership firm Lookers (LOOK.L) recouped early losses to soar 9.2% after setting out plans to close 12 sites and lay off 1,500 employees amid the coronavirus crisis.