MARKET REPORT: Trump’s Covid-19 diagnosis gives markets the jitters

President Trump’s Covid-19 diagnosis sent jitters through the global markets as investors worried that the US presidential election was about to get even more uncertain.

As London-based traders woke up to the news that Trump and his wife Melania had both tested positive for the virus, the FTSE 100 dipped 1.2 per cent in early trading.

But as investors digested the news, optimism picked up – and by the end of the day the FTSE was up 0.39 per cent, or 22.67 points, at 5902.12.

As London-based traders woke up to the news that US President Donald Trump and his wife Melania had both tested positive for the virus, the FTSE 100 dipped 1.2 per cent in early trading

US markets were just about holding their ground, despite the additional hurdle of disappointing jobs data.

Just 661,000 jobs were added in the US last month, undershooting the 850,000 analysts had predicted and well down from the 1.48 million added in August.

David Madden, an analyst at CMC Markets, said: ‘It is a little concerning that there was a big drop off in the number of new jobs created between August and September, as it suggests the labour market is cooling.’ 

The Dow Jones was down 0.1 per cent, the Nasdaq down 1.5 per cent, and the S&P down 0.5 per cent during early trading yesterday.

Trevor Greetham of Royal London Asset Management said: ‘The news that President Trump has tested positive for coronavirus has rattled financial markets, adding an extra layer of uncertainty to an already uncertain situation.

Stock Watch – Draper Esprit 

Investment firm Draper Esprit was on the rise after raising £110million from savers.

It sold 19.8m new shares for 555p each, and plans to use the money to invest in more technology companies.

Draper Esprit has previously backed businesses such as snack firm Graze and digital bank Revolut.

 Investors were so keen to snap up the shares that the 555p price they paid was more than the company’s shares were trading at before the deal. 

Shares were up 8.7 per cent , or 48p, at 600p.

‘It is extremely hard to delay the Presidential election but campaigning may be impacted and public sympathy could narrow Joe Biden’s lead in the polls.’

Back in the UK, the FTSE 250 managed to cling onto a 0.07 per cent, or 12.35 point, gain to end the day at 17,395.81 – despite a horror show from gold miner Centamin. 

The miner plunged 22.2 per cent, or 44.55p, to 156.55p, after forecasting a fall in annual production at its key Sukari mine in Egypt.

Centamin has delayed some open-pit mining operations at Sukari after detecting movement using its radar system.

Asset manager Liontrust was the mid-cap index’s biggest riser, after selling its Asia Income Team to Jacob Rees-Mogg’s firm Somerset Capital for up to £2million. 

After reviewing fund managers’ performance, Liontrust also said it was closing its European Income and Macro Thematic investment teams.

Darius McDermott, managing director at Chelsea Financial Services, called the decision a ‘sensible tidying up of a couple of underperforming funds’. Shares jumped 5.7 per cent, or 75p, to 1395p.

But elsewhere on the index Cineworld had little to celebrate, as its debt rating was downgraded to ‘junk’ by Moody’s.

Debt ratings are used by investors to assess the riskiness of lending to a particular company, and the cinema chain’s prospects are looking increasingly gloomy as social distancing continues.

‘If the 200 remaining cinemas that are currently closed in the US were not to be open before the end of October 2020, or attendance levels remained significantly low or there are further delays in the 2020 scheduled significant movie releases to 2021, then Cineworld could easily run short of liquidity,’ said Gunjan Dixit of Moody’s.

Shares in Cineworld fell 2.5 per cent, or 1.02p, to 39.47p

Media company Future isn’t ready to give up on the film industry though, as it has acquired digital TV and film publisher Cinemablend. Future’s shares were flat at 1952p.

On the FTSE 100, Rolls-Royce slipped 2.7 per cent, or 3.2p, to 113.6p as analysts at UBS cut their target for the stock’s price from 265p to 149p. 

The struggling engine maker is hoping to bag a £5billion rescue package involving a £1billion loan guarantee extension, £2billion from shareholders and another £2billion from banks and bondholders.

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