London close: Stocks finish firmer on sterling weakness

Market Close Report
15:02, 7th April 2021

(Sharecast News) - London stocks closed well above the waterline on Wednesday, with sentiment underpinned by recovery hopes and an encouraging reading on the services sector.
The FTSE 100 ended the session up 0.91% at 6,885.32, and the FTSE 250 was 0.76% firmer at 22,160.57.

Sterling was in the red, however, last trading 0.57% weaker against the dollar at $1.3745, and losing 0.63% on the euro to change hands at €1.1568.

"Much like on Tuesday, pronounced losses for the pound helped the FTSE top the table of the session's highflyers," said Spreadex financial analyst Connor Campbell.

"It appears that while the UK blue chip index, and its mid-cap sibling, enjoy the optimism surrounding the country's post-Covid comeback, sterling has been saddled with concerns over the vaccine programme."

Campbell said the latest Oxford vaccine update from the MHRA only compounded fears that arose from SAGE's warning on Tuesday that the UK's vaccine rollout could seriously slow down in the coming weeks.

"The regulator has stated that under-30s should be offered an alternative to the AstraZeneca jab where possible, due to concerns over the link between the vaccine and blood clots.

"This is better than an outright ban on use of the vaccine for that demographic but could still impact the UK's intended easing roadmap," he said.

"Softening the blow of this somewhat was news that the first wave of the Moderna vaccine had finally hit UK shores."

On the data front, a survey showed the UK services sector returned to growth in March as new orders rose ahead of lockdown easing.

The IHS Markit/CIPS services PMI business activity index increased to 56.3 from 49.5 in February.

That was a touch below the flash reading of 56.8 but above the 50.0 level that separates contraction from expansion for the first time since October 2020.

The composite PMI - which measures activity in the services and manufacturing sectors - printed at 56.4 in March, up from 49.6 in February.

It was above the 50.0 mark for the first time this year.

"UK service providers were back in expansion mode in March as confidence in the roadmap for easing lockdown restrictions provided a strong uplift to new orders," said Tim Moore, economics director at IHS Markit.

"Total business activity increased at the fastest rate since August 2020 and this return to growth ended a four-month sequence of decline."

In equity markets, Shell edged up 1.39% 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 2.86% 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.

Reopening stocks were also on the rise, with shopping centre owner Hammerson up 6.75% and cruise operator Carnival 5.39% higher.

"The prospect of an impending loosening of Covid restrictions has helped boost high-street and services sectors stocks such as Hammerson, Mitchells & Butlers and Restaurant Group, with optimism over the impending economic boost helping to drive stocks higher," said IG analyst Joshua Mahony.

"Questions remain over whether such loosening will ultimately drive us Covid cases, but until we see a change of the current trajectory, markets are increasingly confident that the UK vaccination effort will help enable a substantial economic recovery in the coming months."

On the downside, Flutter Entertainment lost 1.33% as it confirmed that Fox Corporation has filed a suit against it related to its option to buy an 18.6% stake in US sports betting group FanDuel.

Traders also pointed to a placing of around 2.3m Flutter shares at £153 each, which was linked to Fastball Holdings, with Goldman Sachs acting as bookrunner.

Market Movers

FTSE 100 (UKX) 6,885.32 0.91%
FTSE 250 (MCX) 22,160.57 0.76%
techMARK (TASX) 4,307.85 0.33%

FTSE 100 - Risers

Just Eat Takeaway.Com N.V. (CDI) (JET) 7,165.00p 5.06%
Smith (DS) (SMDS) 424.40p 2.93%
Informa (INF) 586.60p 2.80%
Pershing Square Holdings Ltd NPV (PSH) 2,715.00p 2.64%
Persimmon (PSN) 3,175.00p 2.62%
BT Group (BT.A) 156.40p 2.46%
Smurfit Kappa Group (CDI) (SKG) 3,587.00p 2.46%
M&G (MNG) 219.50p 2.43%
Land Securities Group (LAND) 717.80p 2.37%
Bunzl (BNZL) 2,380.00p 2.37%

FTSE 100 - Fallers

Flutter Entertainment (CDI) (FLTR) 15,555.00p -1.33%
London Stock Exchange Group (LSEG) 7,278.00p -1.25%
Renishaw (RSW) 6,445.00p -1.23%
AstraZeneca (AZN) 7,099.00p -1.17%
Scottish Mortgage Inv Trust (SMT) 1,190.00p -0.92%
Spirax-Sarco Engineering (SPX) 11,665.00p -0.64%
Weir Group (WEIR) 1,830.00p -0.57%
Avast (AVST) 462.00p -0.56%
SSE (SSE) 1,512.50p -0.56%
Ashtead Group (AHT) 4,455.00p -0.54%

FTSE 250 - Risers

Hammerson (HMSO) 37.95p 6.75%
SSP Group (SSPG) 344.70p 6.52%
Provident Financial (PFG) 238.60p 6.33%
Bytes Technology Group (BYIT) 429.20p 5.79%
Carnival (CCL) 1,799.00p 5.39%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,165.00p 5.06%
Babcock International Group (BAB) 239.90p 5.04%
Rank Group (RNK) 207.00p 4.86%
Ferrexpo (FXPO) 384.20p 4.46%
Mitchells & Butlers (MAB) 329.40p 3.65%

FTSE 250 - Fallers

Tullow Oil (TLW) 48.01p -4.02%
PureTech Health (PRTC) 412.50p -2.50%
National Express Group (NEX) 320.40p -2.38%
Dr. Martens (DOCS) 455.60p -2.15%
Mitie Group (MTO) 63.90p -2.14%
Cineworld Group (CINE) 103.35p -2.13%
The Renewables Infrastructure Group Limited (TRIG) 120.60p -1.79%
Biffa (BIFF) 274.00p -1.62%
Future (FUTR) 2,026.00p -1.55%
Greencoat UK Wind (UKW) 129.00p -1.53%

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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