London close: Stocks slightly weaker as sterling surges

(Sharecast News) - London stocks finished just below the waterline on Monday as a stronger pound offset the positive sentiment around the lifting of Covid-19 restrictions.

The FTSE 100 ended the session down 0.09% at 7,123.68, and the FTSE 250 was 0.34% weaker at 22,697.19.

Sterling was well into the green, meanwhile, last trading 1.11% stronger against the dollar at $1.4139, and advancing 1.06% on the euro to €1.1623.

It was the first time the pound was above $1.41 since February, underpinned by the prospect of restrictions easing, dollar weakness after Friday's weak payrolls report, and the receding threat of a second Scottish referendum.

"Sterling traders seem unperturbed by the prospect of the UK economy moving into another period of political uncertainty, as the elections put the SNP's independence plan back on the agenda," said IG chief market analyst Chris Beauchamp.

"An attritional battle through the courts to decide on the legality of a referendum seems likely, taking some of the shine off the prospects for the UK economy.

"Nonetheless, with the dollar now finding it harder to rally in the wake of the non-farms report it looks like sterling can still make headway for the time being."

In equity markets, miners were in the black as with iron ore and copper prices reached new heights earlier, with Rio Tinto up 1.88%, BHP rising 1.63%, Anglo American ahead 0.8%, Glencore growing 2.63%, and Antofagasta 0.51% higher.

Greggs surged 10.49% after it said annual profit could be similar to 2019, and was likely to "materially beat" board expectations after like-for-like sales returned to growth following the relaxation of Covid-19 restrictions.

Polymer maker Victrex was 7.28% firmer after it posted a decline in interim profit as the medical division was a drag on revenue, but declared a dividend.

Berkeley Group rose 3.09% after JPMorgan upgraded shares of the housebuilder to 'overweight' from 'neutral' and lifted the price target to 5,400p from 5,100p as it argued that concerns were overplayed.

Lloyds Banking Group was up 2.78% following a report over the weekend that it was in advanced talks to buy Embark Group, a privately owned provider of savings and retirement products, for £400m.

On the downside, airlines were under the cosh, with British Airways owner IAG down 1.77%, easyJet descending 2.28% and Wizz Air 2.52% lower amid disappointment that popular destinations such as Spain, France, Italy and Greece were not on the government's green list.

"The industry's hope is that additional meaningful destinations make it onto the list in time for the peak season in July and August," said broker Liberum.

"However, the extremely cautious approach so far does not bode well."

Analyst Gerald Khoo also pointed to the fact that the list "contains an almost comical number of small territories and islands with few or no direct flights from the UK".

"This includes two with no airports and three more that had no regular scheduled commercial airline service at all pre-pandemic," he said.

Elsewhere, Provident Financial slumped 2.48% as it said it was pulling out of doorstep lending after more than 100 years as the subprime lender plunged to a £113.5m annual loss.

Majority-state-owned bank NatWest Group, meanwhile, was 1.47% weaker amid reports the government was preparing to sell as much as £1bn of shares in a possible placing.

Sky News reported that several institutional investors had been approached about a potential placing of shares in the company, whose retail holdings include NatWest, the Royal Bank of Scotland and Ulster Bank.

The placing would see the state's stake reduced to 55%, the lowest holding since it bailed out the then-RBS Group in 2008.

Market Movers

FTSE 100 (UKX) 7,123.68 -0.08%
FTSE 250 (MCX) 22,697.19 -0.34%
techMARK (TASX) 4,336.66 -1.01%

FTSE 100 - Risers

Berkeley Group Holdings (The) (BKG) 4,897.00p 3.09%
Lloyds Banking Group (LLOY) 47.85p 2.78%
Rolls-Royce Holdings (RR.) 109.68p 2.75%
Glencore (GLEN) 331.25p 2.63%
Barclays (BARC) 185.46p 2.16%
Sainsbury (J) (SBRY) 256.10p 1.95%
M&G (MNG) 221.60p 1.89%
Rio Tinto (RIO) 6,658.00p 1.88%
Kingfisher (KGF) 370.30p 1.87%
British Land Company (BLND) 544.80p 1.68%

FTSE 100 - Fallers

Scottish Mortgage Inv Trust (SMT) 1,139.50p -6.21%
Flutter Entertainment (CDI) (FLTR) 14,040.00p -4.00%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,874.00p -3.33%
Intertek Group (ITRK) 5,974.00p -3.33%
Whitbread (WTB) 3,200.00p -3.16%
Rightmove (RMV) 588.20p -3.10%
Experian (EXPN) 2,722.00p -3.10%
Renishaw (RSW) 6,030.00p -3.05%
Rentokil Initial (RTO) 475.60p -2.98%
Aveva Group (AVV) 3,251.00p -2.90%

FTSE 250 - Risers

Greggs (GRG) 2,591.00p 10.49%
Safestore Holdings (SAFE) 941.00p 8.16%
Victrex plc (VCT) 2,548.00p 7.28%
Aston Martin Lagonda Global Holdings (AML) 1,937.00p 4.34%
Cineworld Group (CINE) 96.30p 4.09%
Big Yellow Group (BYG) 1,284.00p 3.98%
Ferrexpo (FXPO) 495.60p 3.38%
Restaurant Group (RTN) 130.20p 3.01%
Capita (CPI) 43.26p 2.95%
Great Portland Estates (GPOR) 737.50p 2.86%

FTSE 250 - Fallers

Baillie Gifford US Growth Trust (USA) 287.00p -6.67%
Allianz Technology Trust (ATT) 264.00p -6.55%
Edinburgh Worldwide Inv Trust (EWI) 315.50p -4.83%
Fidelity China Special Situations (FCSS) 398.50p -4.44%
Airtel Africa (AAF) 78.00p -4.06%
Playtech (PTEC) 476.00p -3.80%
Polar Capital Technology Trust (PCT) 2,178.00p -3.63%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,874.00p -3.33%
Monks Inv Trust (MNKS) 1,324.00p -3.07%
JPMorgan Emerging Markets Inv Trust (JMG) 130.80p -2.97%