London close: Stocks finish weaker as investors take their profits

Sharecast
Market Close Report
15:28, 17th November 2020

(Sharecast News) - London stocks finished weaker on Tuesday, following another vaccine-inspired rally in the previous session, underperforming their European peers as sterling gained ground.
The FTSE 100 ended the session down 0.87% at 6,365.33, and the FTSE 250 was 0.47% weaker at 19,516.17.

Sterling was in positive territory, last rising 0.39% against the dollar to $1.3250, and gaining 0.25% on the euro to €1.1167.

"Stock markets are set to finish the session in the red as traders book their profits from yesterday's impressive gains," said CMC Markets analyst David Madden.

"Dealers haven't forgotten that Moderna's possible vaccine for Covid-19 has an effective rate of 94.5%, but for the time being they are happy to square up their positions.

"In the space of one week, there have been two very encouraging stories with respect to coronavirus drugs, so there is a growing feeling that the pharma sector is closing in on the virus, but there is always the possibility of setbacks."

Earlier, it was reported that the UK's Brexit negotiator David Frost told Prime Minister Boris Johnson to expect a trade deal with the EU "early next week".

According to the Sun, Frost said there was a "possible landing zone" that could be reached as early as next Tuesday.

"The rally has stalled across Europe, pausing for breath after the huge gains of the past week that have been driven by positive vaccine news," said IG.

"Overall the atmosphere is still positive but as the euphoria about possible routes out of the crisis begins to fade the focus will shift, to a degree at least, to the manufacture and distribution of the vaccines.

"Neither of these things is likely any time soon, leaving investors to worry how much further the second wave will spread and how bad things could actually get over the course of the winter."

In equity markets, stocks that gained in the vaccine-fuelled rally were lower, with caterer Compass Group down 1.8% and engine maker Rolls-Royce losing 0.29%.

Budget airline easyJet flew 1.93% lower after it swung to a massive £1.3bn annual loss, the first in its history, revealing the full extent of the havoc caused by the coronavirus pandemic as capacity almost halved.

"The problem for easyJet is that getting travel demand back to where it was is going to take time and whilst there are vaccines in the offing, investors may need to wait patiently," said Neil Wilson, chief market analyst at Markets.com.

"The guidance for flying only 20% of capacity in the first quarter underlines the sluggish pace of demand recovery in key markets affected by the coronavirus.

"And whilst there are vaccines coming, there are timing issues here."

Wilson said there also remained "great uncertainty" about the opening up of key passenger routes in the meantime, given the "capricious" quarantine and lockdown measures in place across Europe.

On the upside, Imperial Brands shares jumped 7.34% after it reported a rise in annual sales, driven by a demand for tobacco which offset a drop in its e-cigarette business, and forecast profit growth in 2021.

Intermediate Capital rallied 7.85% as it posted a sharp rise in first-half profits amid strong demand for its funds and a recovery in portfolio valuations across the period.

Homeserve was also on the front foot by 2.43% after saying it expects to deliver group profit before tax and appreciation for the 2021 financial year slightly ahead of current consensus estimates.

In broker note action, Upper Crust owner SSP was down 6.24% and WH Smith was 2.5% weaker, after downgrades at Morgan Stanley and RBC Capital Markets, respectively.

Market Movers

FTSE 100 (UKX) 6,365.33 -0.87%
FTSE 250 (MCX) 19,516.17 -0.47%
techMARK (TASX) 3,948.94 -1.19%

FTSE 100 - Risers

Intermediate Capital Group (ICP) 1,672.00p 7.85%
Imperial Brands (IMB) 1,506.00p 7.34%
Taylor Wimpey (TW.) 159.00p 5.79%
Barratt Developments (BDEV) 654.40p 3.19%
Homeserve (HSV) 1,267.00p 2.43%
Ocado Group (OCDO) 2,236.00p 2.15%
Hargreaves Lansdown (HL.) 1,608.00p 2.05%
Melrose Industries (MRO) 163.65p 1.77%
BAE Systems (BA.) 495.20p 1.73%
Sainsbury (J) (SBRY) 212.90p 1.67%

FTSE 100 - Fallers

Antofagasta (ANTO) 1,108.00p -4.32%
Vodafone Group (VOD) 122.54p -4.10%
London Stock Exchange Group (LSE) 7,926.00p -3.97%
Hikma Pharmaceuticals (HIK) 2,547.00p -3.67%
Experian (EXPN) 2,893.00p -3.41%
International Consolidated Airlines Group SA (CDI) (IAG) 153.45p -3.34%
HSBC Holdings (HSBA) 376.60p -3.14%
JD Sports Fashion (JD.) 787.00p -3.03%
AstraZeneca (AZN) 8,291.00p -2.95%
GlaxoSmithKline (GSK) 1,402.80p -2.73%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 75.90p 8.12%
Clarkson (CKN) 2,585.00p 7.09%
Network International Holdings (NETW) 280.20p 6.06%
TBC Bank Group (TBCG) 1,238.00p 5.81%
Watches of Switzerland Group (WOSG) 474.50p 5.44%
PureTech Health (PRTC) 294.00p 5.38%
Sabre Insurance Group (SBRE) 277.50p 5.11%
Royal Mail (RMG) 282.30p 4.56%
Avon Rubber (AVON) 4,260.00p 4.13%
Telecom Plus (TEP) 1,424.00p 4.10%

FTSE 250 - Fallers

SSP Group (SSPG) 345.80p -6.24%
Shaftesbury (SHB) 565.00p -6.07%
Syncona Limited NPV (SYNC) 263.00p -5.57%
Greencore Group (GNC) 121.90p -4.17%
ICG Enterprise Trust (ICGT) 890.00p -4.09%
Henderson Smaller Companies Inv Trust (HSL) 912.00p -4.00%
Capital & Counties Properties (CAPC) 145.50p -3.77%
Marshalls (MSLH) 762.50p -3.53%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 820.00p -3.53%
WH Smith (SMWH) 1,428.00p -3.50%

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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