London close: Stocks close weaker as Yellen speaks

Sharecast
Market Close Report
15:05, 19th January 2021

(Sharecast News) - London stocks closed in negative territory on Tuesday, as investors awaited a testimony on stimulus by incoming US Treasury Secretary Janet Yellen.
The FTSE 100 ended the session down 0.11% at 6,712.95, and the FTSE 250 was 0.18% weaker at 20,602.89.

Sterling was in a mixed state, last gaining 0.26% on the dollar to $1.3622, but falling 0.11% against the euro to €1.1238.

"Traders spent much of the day waiting to hear from Janet Yellen, the future US Treasury Secretary, so volatility has been low," said CMC Markets analyst David Madden.

"Last week, president-elect Joe Biden announced plans for a $1.9trn stimulus package, and it is understood that Yellen will tell politicians that a robust fiscal response is needed to ensure the US' economic recovery continues.

"Lately, there have been growing signs the rebound is running out of steam, most notably the negative US nonfarm payrolls report for December, so a large financial injection should improve the health of the country."

It was also confirmed during the day that Germany's lockdown would be extended until 14 February.

"This was not a surprise seeing as there was speculation about it recently," Madden said.

"Tough restrictions are in place in the UK, Portugal and France too.

"There are fears the economic recovery in Europe will be hampered by prolonged lockdowns."

In equity markets, Rolls-Royce gave up most of its earlier gains but still closed 0.59% higher, following an El Economista report that private equity firms Carlyle, CVC and KKR were among bidders for the engine maker's ITP Aero business.

HSBC was also on the rise, advancing 2.1% after chairman Mark Tucker said at the Asian Financial Forum on Monday that the bank hoped to resume paying dividends as soon as possible.

Investment platform AJ Bell was boosted 2.11% by an upgrade to 'hold' from 'sell' at Berenberg.

Airlines were also up, with British Airways parent IAG ascending 0.83% and budget carrier easyJet 3.15% higher, amid expectations that bookings would pick up in the summer thanks to vaccines.

On the downside, Entain slumped 11.92% after suitor MGM Resorts International walked away after its initial $11bn takeover offer.

"However, with the US gambling legislation environment improving, bookmakers will undoubtedly see a potential US expansion as a means to regain the ground lost after recent restrictions to fixed-odds betting terminals," said IG chief market analyst Joshua Mahony.

Electrical retailer AO World slumped 4.24% despite posting a 67% rise in UK third-quarter revenues, as it highlighted "significantly higher" costs due to the pandemic and said it had seen a slightly increased rate of cancellation of consumers' long-term contracts in mobile and warranties.

IG'sChris Beauchamp said investors were likely to be wondering what the next catalyst would be after the more-than-480% gain since the beginning of May.

"Today's statement was full of good news, but even this was not enough to please nervous stockholders, who have hit the 'sell' button to lock in profits after the huge rally in the share price," he said.

Drinks maker Britvic fell 4.19%, after Citi said that a worsening second-quarter outlook was likely to drive consensus downgrades.

Outside the FTSE 350, fashion brand Superdry tumbled 16.25% after it warned over its ability to continue as a going concern, reporting a widening of its interim losses and a slump in revenue as it took a hit from the pandemic and related store closures.

Market Movers

FTSE 100 (UKX) 6,712.95 -0.11%
FTSE 250 (MCX) 20,602.89 -0.18%
techMARK (TASX) 4,151.06 0.27%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,624.00p 3.47%
Hargreaves Lansdown (HL.) 1,600.50p 2.76%
HSBC Holdings (HSBA) 411.45p 2.10%
Pearson (PSON) 679.00p 1.86%
Scottish Mortgage Inv Trust (SMT) 1,241.00p 1.55%
Avast (AVST) 540.00p 1.50%
InterContinental Hotels Group (IHG) 4,858.00p 1.46%
DCC (DCC) 5,784.00p 1.08%
Diageo (DGE) 2,926.50p 1.00%
Prudential (PRU) 1,434.50p 0.95%

FTSE 100 - Fallers

Entain (ENT) 1,245.00p -11.92%
WPP (WPP) 789.80p -3.54%
Barclays (BARC) 146.86p -2.95%
Standard Chartered (STAN) 476.60p -2.91%
Flutter Entertainment (FLTR) 14,400.00p -2.64%
JD Sports Fashion (JD.) 819.40p -2.43%
Kingfisher (KGF) 262.40p -2.34%
NATWEST GROUP PLC ORD 100P (NWG) 157.30p -2.15%
Informa (INF) 523.60p -2.10%
Mondi (MNDI) 1,799.50p -1.94%

FTSE 250 - Risers

Indivior (INDV) 129.80p 8.89%
Network International Holdings (NETW) 348.80p 5.70%
Wetherspoon (J.D.) (JDW) 1,183.00p 4.14%
easyJet (EZJ) 845.20p 3.58%
BMO Commercial Property Trust Limited (BCPT) 78.00p 3.43%
Wizz Air Holdings (WIZZ) 4,450.00p 3.34%
Savills (SVS) 1,055.00p 2.82%
Greggs (GRG) 1,960.00p 2.78%
Grafton Group Ut (GFTU) 910.00p 2.77%
Baillie Gifford US Growth Trust (USA) 339.00p 2.72%

FTSE 250 - Fallers

Wood Group (John) (WG.) 327.70p -5.76%
Premier Foods (PFD) 102.80p -4.81%
AO World (AO.) 361.50p -4.24%
Britvic (BVIC) 755.00p -4.19%
WH Smith (SMWH) 1,555.00p -4.13%
4Imprint Group (FOUR) 2,205.00p -3.71%
Clarkson (CKN) 2,645.00p -3.31%
Vietnam Enterprise Investments (DI) (VEIL) 600.00p -3.23%
Airtel Africa (AAF) 76.50p -3.18%
Unite Group (UTG) 963.00p -3.12%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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