ADVFN Morning London Market Report: Wednesday 7 April 2021

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London open: Stocks rise on recovery hopes; services data eyed


London stocks rose in early trade on Wednesday amid recovery hopes, as investors eyed the latest reading on the UK services sector.

At 0840 BST, the FTSE 100 was up 0.8% at 6,877.26.

Spreadex analyst Connor Campbell said: “Despite the third wave in Europe, concerns over the AstraZeneca vaccine, and reported worries about an incoming slowdown in the UK’s vaccination programme, yesterday’s IMF growth upgrades have helped keep the markets feeling fresh.

“As it did on Tuesday, the FTSE 100 led the way after the bell, adding another 0.8%. Touching 6,875, the index is at a near three-month high – and if it can add another 40 or so points in the coming days, it will hit its best levels in over 13-months.”

On the data front, market participants were awaiting the release of Markit’s services PMI for March at 0930 BST.

In corporate news, oil giant Shell was in the black even as it said extreme weather in Texas in February was expected to hit first-quarter adjusted earnings by up to $200m.

Hilton Food Group rallied after it said annual profit rose 20% and announced a higher dividend as the food packaging group benefited from households eating at home during the pandemic.

On the downside, Flutter Entertainment was the worst performer on the FTSE 100 after a share placing and as it confirmed it is in a legal dispute with Fox related to its option to buy an 18.6% stake in US sports betting group FanDuel.

Traders also noted that about 2.3m shares were placed at £153 each. The placing was linked to Fastball Holdings, with Goldman Sachs acting as bookrunner.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Carnival Plc +4.71% +80.40 1,787.40
2 Taylor Wimpey Plc +2.84% +5.20 188.05
3 Persimmon Plc +2.75% +85.00 3,177.00
4 Bp Plc +2.67% +8.00 307.85
5 Land Securities Group Plc +2.48% +17.40 718.60
6 Micro Focus International Plc +2.36% +12.80 556.00
7 Informa Plc +2.35% +13.40 584.00
8 Compass Group Plc +2.27% +35.00 1,579.50
9 Barclays Plc +2.03% +3.76 189.34
10 Tui Ag +1.98% +7.80 400.80


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Flutter Entertainment Plc -2.38% -375.00 15,370.00
2 Hikma Pharmaceuticals Plc -0.67% -16.00 2,371.00
3 Schroders Plc -0.59% -21.00 3,551.00
4 Spirax-sarco Engineering Plc -0.55% -65.00 11,675.00
5 Astrazeneca Plc -0.36% -26.00 7,157.00
6 Sse Plc -0.36% -5.50 1,515.50
7 Evraz Plc -0.28% -1.60 575.60
8 Admiral Group Plc -0.19% -6.00 3,116.00
9 Croda International Plc -0.16% -10.00 6,402.00
10 Ashtead Group Plc -0.11% -5.00 4,474.00


Europe open: Stoxx maintains record level on recovery hopes, US spending

European stocks edged into record territory at the open on Wednesday as investors continued to trade on hopes of a swift economic recovery and a massive US spending programme and growth upgrades from the IMF overnight.

The pan-European STOXX 600 index was up 0.1% at 0748 GMT after closing at an all-time high of 435.26 points on Tuesday.

All regional bourses were slightly higher with the UK’s FTSE 100 outperforming, rising 0.73% driven by a weaker pound, benefiting the exporter-dominated index.

Investors were also cheered by the roll-out of Moderna‘s Covid-19 vaccine in Britain, where almost half the population has been vaccinated, although fears of blood clots in children from the AstraZeneca jab and reports of a slowdown in supply had tempered the mood.

Eyes were also on final readings of UK and euro zone March services sector activity later in the day.

Shares in Flutter Entertainment fell on the back of a share placing reports Fox Corp has filed a suit against the company related to its option to buy an 18.6% stake in US sports betting group FanDuel.

Flutter – the majority owner of FanDuel – wants to buy the stake at an $11.2bn valuation, which is the value that was set when it bought a 37.2% stake from Fastball in December, but Flutter wants fair market value.

Oil giant Shell rose despite reporting that the extreme weather in Texas last February was expected to hit first-quarter adjusted earnings by up to $200m.


US close: Stocks end session lower

Wall Street stocks closed slightly lower on Tuesday, breaking a three-day winning streak for the S&P 500.

At the close, the Dow Jones Industrial Average was down 0.29% at 33,430.24, while the S&P 500 was 0.10% weaker at 4,073.94 and the Nasdaq Composite ended the day 0.05% softer at 13,698.38.

The Dow closed 96.95 points lower on Tuesday, cutting into gains recorded in the previous session.

Initially, market participants continued to cheer Friday’s stellar jobs report and a surge in the gauge of services industry activity as a result of a rebounding US economy amid the nation’s accelerated Covid-19 vaccine rollout.

Also in focus throughout the session, the yield on the benchmark 10-year Treasury note slipped off recent highs to around 1.66%, easing fears around inflation, while Joe Biden’s $2.0trn infrastructure proposal and his intention to up the corporate tax to 28% to fund it also continued to draw an amount of investor attention.

On the macro front, the number of job openings edged up to 7.4m on the last business day of February, according to the Bureau of Labor Statistics, with hires also edging up to 5.7m and total separations little changed at 5.5m.

In the corporate space, the fallout from the Archegos scandal has led Credit Suisse to warn that it will take a charge of $4.7bn and turn in a first-quarter pre-tax loss of roughly $960.0m.

Tesla was in the green after posting record first-quarter deliveries yesterday, while GameStop posted early losses on news that it will sell as many as 3.5m shares to assemble a $1.0bn war chest to fund its e-commerce strategy.

Stocks tied to an economic reopening continued off on their recent upward trajectory, with the likes of United AirlinesDeltaCarnivalNorwegian Cruise Line and Royal Caribbean all trading higher.


Wednesday newspaper round-up: Gambling firms, hospitality sector, M&G

Gambling firms have profited during the pandemic but are leaving the NHS to “pick up the pieces” of addiction and should be hit with a compulsory levy to fund treatment, the head of mental health in England has said. Claire Murdoch – national mental health director for NHS England – denounced the voluntary system that lets the industry dictate how much it contributes to helping addicts. – Guardian

The government has been accused of “unreasonably targeting” the hospitality sector through the proposed introduction of Covid status checks for customers entering pubs, bars and restaurants, as three nationwide pub and bar chains and the UK’s largest nightclub operator voiced their opposition to the plans. “This feels like a measure which is unreasonably targeting our sector, they are not proposing this to go into a supermarket,” said Alex Reilley, founder of Loungers, a bar and restaurant operator which has 170 sites in the UK. – Guardian

A Japanese motor sport enthusiast has vowed to make Caterham Cars match-fit for the electric era after buying the British manufacturer famed for its stripped-down, high-performance road and racing machines. Kazuho Takahashi’s business VT Holdings snapped up Caterham – best known for its “Seven” range of cars – from its Malaysian previous owners as the UK prepares for a ban on sales of new cars with petrol engines from 2030. – Telegraph

The boss of M&G accepted a bonus of almost £1.5 million last year, as well as a car and chauffeur costing £250,000, as the investment group prevented thousands of customers from withdrawing money from its main property fund. John Foley, 64, chief executive of the FTSE 100 company, took a bonus of £1.46 million last year, lifting his pay by £600,000 to £3.88 million. His basic salary rose by 8.4 per cent to £980,000 and he received long-term incentives worth £995,000, up 64 per cent. – The Times

The crisis engulfing Sanjeev Gupta’s GFG Alliance metals empire has spread to alleged sharp practices on the internet. It said yesterday that it had launched an internal investigation into allegations that its companies were using web domain names uncannily similar to those of rivals. – The Times


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