ADVFN Morning London Market Report: Monday 12 April 2021

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London open: Stocks fall despite England reopening


London stocks fell in early trade on Monday even as England’s economy began to open up, with non-essential shops, pubs, hairdressers and gyms all open after months in lockdown.

At 0905 BST, the FTSE 100 was down 0.5% at 6,878.60.

Spreadex analyst Connor Campbell said: “The spirit that drove the Dow Jones to 33,800 for the first-time last Friday was nowhere to be seen on Monday morning.

“Falling commodity stocks put an end to the FTSE’s 13-month peak. A 0.9% decline from Brent Crude, and a sharper 1.4% slide from copper, sent the index’s weighty oil and mining stocks lower, and left the FTSE itself down close to 50 points.

“By contrast – and almost certainly contributing to the FTSE’s losses – the pound rose 0.1% against the dollar and 0.3% against the euro. This as sterling tries to reset after a rough set of sessions last week.

“The lacklustre showing in the UK comes despite the second big step in the country’s re-opening efforts, and news that business optimism has hit a record high in the UK as firms anticipate a post-covid comeback.”

In equity markets, miners were under the cosh, with Anglo AmericanBHPAntofagasta and Glencore all weaker.

Elsewhere, shopping centre owner Hammerson lost ground after confirming it was in talks with Canadian private equity firm Brookfield on a possible sale of its retail parks. Brookfield is prepared to pay around £350m for seven retail parks, the Sunday Times reported.

AstraZeneca nudged lower after it said a trial of its Farxiga drug for treating hospitalised Covid-19 patients did not produce statistically significant results.

EasyJet flew lower after HSBC cut its stance on shares of the budget airline to ‘hold’.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Carnival Plc +0.90% +15.60 1,752.00
2 Severn Trent Plc +0.62% +15.00 2,421.00
3 Crh Plc +0.54% +19.00 3,547.00
4 Imperial Brands Plc +0.52% +8.00 1,550.00
5 Admiral Group Plc +0.48% +15.00 3,165.00
6 Whitbread Plc +0.32% +11.00 3,477.00
7 Centrica Plc +0.31% +0.18 57.60
8 Ferguson Plc +0.28% +26.00 9,336.00
9 Halma Plc +0.27% +7.00 2,566.00
10 Schroders Plc +0.25% +9.00 3,635.00


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Pearson Plc -2.53% -20.40 785.40
2 Anglo American Plc -2.53% -78.00 3,005.00
3 Rightmove Plc -2.49% -15.40 603.00
4 Easyjet Plc -2.43% -23.60 949.20
5 Bhp Group Plc -2.26% -48.50 2,101.50
6 Associated British Foods Plc -2.25% -56.00 2,428.00
7 Evraz Plc -2.24% -13.40 585.80
8 Antofagasta Plc -2.11% -36.50 1,693.50
9 Standard Chartered Plc -1.75% -8.70 488.80
10 Kingfisher Plc -1.72% -5.90 338.00


Europe open: Shares open lower on weaker Asian markets

European shares retreated from record highs in the opening session of the week on the back of weaker Asian markets.

The pan-European STOXX 600 index had slipped 0.26% by 0740 GMT. The UK’s FTSE 100 was off 0.5% despite non-essential shops such as hairdressers and gyms reopening for the first time since a national lockdown was imposed in January.

Britain’s blue-chip index was hit by falling commodity stocks, with a 0.9% decline in the Brent crude oil price and a 1.4% slide in copper. The export-heavy FTSE was also hit by a stronger pound, which rose against the dollar and euro.

Investors were also keeping their powder dry ahead of the next corporate earnings season.

In equity news, shares in budget airlines easyJet and Ryanair fell after HSBC downgraded their stocks to ‘hold’ from ‘buy’.

Italian diagnostics group DiaSorin jumped 7% after it said it will acquire US based Luminex Corp for $1.8bn in an all-cash deal.


US close: Tech plays among the gainers on Wall Street

Wall Street trading finished on a positive note on Thursday, as a sharper-than-expected increase in weekly jobless claims had little impact on major indices.

At the close, the Dow Jones Industrial Average was up 0.17% at 33,503.57, while the S&P 500 added 0.42% to 4,097.17 and the Nasdaq Composite gained 1.03% to 13,829.31.

The Dow Jones closed 57.31 points higher on Thursday, adding to the gains recorded on Wednesday, as investors digested minutes from the Federal Open Market Committee’s latest meeting.

The FOMC meeting minutes, which outlined plans to maintain the pace of asset purchases for some time as the central bank helps to support stable prices and maximum employment, remained in focus on Thursday, as did President Joe Biden’s $2.0trn infrastructure plan that includes a corporate tax rate hike to 28%.

Biden, who indicated on Wednesday that he was willing to negotiate on the proposed increase, views the hike as a key source of revenue for the White House’s infrastructure plan.

However, Republicans were claiming to be concerned about tax increases as the US begins to emerge from the Covid-19 pandemic.

On the macro front, initial jobless claims rose more than expected in the week ended 3 March despite signs of healing elsewhere in the jobs market.

According to the Labor Department, first-time claims came to 744,000, well above expectations for a print of 694,000 and an increase of 16,000 on the prior week’s upwardly revised reading of 728,000.

While the four-week moving average also edged higher, hitting 723,750 last week, continuing claims did provide some positive news, with the weekly total dropping by 16,000 to 3.73m – the lowest level for continuing claims since 21 March 2020.

In the corporate space, tech plays were in the green, with Amazon up 0.61%, Apple ahead 1.92%, Netflix 1.39% firmer, and Google owner Alphabet 0.7% higher.

Reopening plays, meanwhile, were below the waterline, with Royal Caribbean Cruises down 1.37%, Delta Air Lines descending 0.78%, and American Airlines 1.17% lower.


Monday newspaper round-up: Business optimism, David Cameron, Bonmarche

Optimism among business leaders is at a record high based on hopes that Britons will commence a multibillion-pound summer spending frenzy after being freed from lockdown. On the day that non-essential shops and other businesses in England reopened for the first time since January, three separate studies suggest that the bounceback in the economy could be broader and faster than previously expected. Small, medium and larger FTSE companies all reported improved sentiment, with only exporters – affected by Brexit as well as coronavirus – suffering a downturn in fortunes. – Guardian

David Cameron has broken his 30-day silence over lobbying ministers on behalf of the scandal-hit company Greensill Capital, accepting he should have acted differently and used only “the most formal channels”. Cameron, who was first contacted by the Financial Times in early March, said he had reflected on his conduct and that “important lessons” would be learned. The first formal request for comment was submitted to his office on 12 March and Cameron had since ignored all requests from national media. – Guardian

Hundreds of jobs are at risk at Bonmarché as administrators try to decide how many stores will reopen when Covid restrictions are lifted on Monday. The over-50s fashion chain, which was previously part of Philip Day’s stable of brands, went bust in October. Administrators at RSM have been reviewing the options for the estate during lockdown. Some or all of the remaining 148 stores may never reopen. – Telegraph

Senior staff are preparing to stage an exodus at Asda after receiving final payouts from a share scheme run by the grocer’s American owner. Industry sources and headhunters said that they had been contacted by several Asda executives looking to leave, with one saying that the level of inquiries was much higher than normal for the sector. – The Times

A small business that made educational kits to help youngsters to learn about technology secured £1.3 million in a funding round last June, almost £700,000 of which came from taxpayers via the government’s Future Fund. Nine months on, Tech Will Save Us, whose toys were gifted to children of key workers last year by the Duke and Duchess of Cambridge, is bust. The taxpayer stands to lose nearly £1.1 million once HM Revenue & Customs debts are factored in, while crowdfunding investors will lose £844,000. – The Times


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