London stocks took a tumble today as health experts warned of a deadly second wave of the COVID-19 pandemic in the UK amid a surge in cases worldwide.
It comes as overnight California reversed most reopening measures post-covid.
The state ordered a shutdown of bars, cinemas and restaurants after seeing a sharp spike in cases.
The infection rate across the US continued to be grim, with Dallas Federal Reserve head Robert Kaplan warning about his worries over new infections. The Fed might have to intervene to do more if the situation does not improve - positive for markets - but would be quick to scale back its stimulus if the economy begins to revive - bad news for shares.
Before the U-turn in share prices in the US, the Nasdaq had raced to a new record high, showing there is still a strong appetite for good news out there, although the mood at these high levels is skittish. the FTSE-100 fell 49.06 at the opening to 6126.01 with similar percentage gains in France and Germany.
The mood had been boosted by news that Pfizer and BioNTech of Germany had been fast tracked by the US regulators to work on covid cures. That came on top of Friday's upbeat news that Gilead's Remdesivir antiviral medicine appeared to cut the fatality rate by 62%.
UK GDP numbers for May showed a crash of 24% on the year, slowing slightly from 25.3% before. The improvement did not impress some analysts, with the EY Item club citing its "disappointment" considering the easing of lockdowns during the month. However, the Item experts said June should have shown a more significant improvement after retailers were allowed to reopen mid-month.
Ocado shares had been expected to have a good session after strong half-year sales figures, with Goldman and Numis both praising the numbers before the markets opened. However, they traded down 2% amid some disappointment at the lack of forecasts due to the uncertain retail environment. Ocado shares have been on a tear, up nearly 80% since 26 February,
Chinese economic numbers this morning came out strongly, showing trade data for June rebounding, but much of that is likely to have been the one-off impact of mass ordering by the West of PPE equipment.
Markets across the world will be watching for quarterly profits from JPMorgan, Wells Fargo and Citigroup at lunchtime, with loan defaults expected to be high. The Fed has suggested total bad debt provisions could be $700 billion. Dividends have to be capped at current rates after a ruling from the central bank, but some may opt for a cut.
Figures overnight from the British Retail Consortium showed retail sales rose 3.4% in June - marking their fastest rate of growth since May 2018. However, most of that was from online. "Retail is not out of the woods yet," said its chief Helen Dickinson. Many stores remain closed and shopper numbers to high streets are still low.
However, the overall growth rate should bode well for Asos, which reports earnings tomorrow against the backdrop of Boohoo's crisis over working conditions in Leicester. Quiz shares may rebound today after it, too, was caught by The Times allegedly using a supplier paying just £3 an hour to staff in Leicester. Factories in the city appear to be staffed with more undercover reporters than genuine workers these days.
Brexit is firmly back in business's sights as details begin to emerge of where the government expects the nation to be come January 1. Businesses trading with Europe are likely to face a "bureaucracy burden" of about £7 billion a year, according to the latest predictions, with an extra 215 million customs declaration to fill in. While the impact of the steady trickle of information has not so far had a major impact on any one stock, concerns about Britain's EU exit has hampered the stock market's overall performance when compared with other nations.
Ocado shares may move today after Sky News reported that chairman Stuart Rose was to stand down. Headhunters are looking for a replacement to work with chief executive and co-founder Tim Steiner.