London open: Stocks edge higher despite profit-taking in Barclays

Sharecast
Sharecast
Opening Market Report
07:35, 30th April 2021

(Sharecast News) - Shares prices are continuing to grind higher at the end of the month against a backdrop of buoyant investor sentiment globally following the fresh record highs set on Wall Street the night before.
Risk appetite was also boosted by figures showing the biggest jump in UK house prices since 2004 and by US technology giant Amazon's better-than-expected quarterly update overnight.

As of 0842 BST, the FTSE 100 was up by 16.6 points to 6,978.29, while the second-tier index was adding 48.51 points or 0.22% to 22,441.45.

In parallel, futures on the S&P 500 were off by 8.5 points at 4,195.0.

Nationwide reported earlier that UK house prices jumped at a month-on-month pace of 2.1% in April to reach £238,831 - the biggest increase since February 2004.

That pushed the year-on-year rate of increase from 5.7% to 7.1% (consensus: 5.1%) and according to Nationwide's chief economist, Richard Gardner, double-digit gains were possible in coming months.

However, a sharp drop in activity at the end of 2021 was a possibility should unemployment rise as many economists anticipated.

Dampening the mood on the other hand were mixed readings on China's manufacturing sector for April.

The 'official' Chinese factory Purchasing Managers Index fell from 51.9 from March to 51.1 in April (consensus: 51.8), amid supply bottlenecks that forced firms to draw down their inventories to meet demand from the US.

Preliminary readings for first quarter gross domestic growth in German and Spain undershot forecasts, partially offset by a big beat in France.

A report for euro area level GDP was due out at 1000 BST.

In the US, investors were waiting on data releases including a reading on personal incomes and spending for March at 1330 BST.

It will be followed by reports on factory activity in the Chicago area (1445 BST) and consumer confidence (1600 BST), with both reports referencing the months of April.

Some profit-taking in Barclays shares on cautious outlook

UK bank Barclays on Friday said first quarter profits had more than doubled, but cautioned that its outlook remained uncertain due to the Coviud-19 pandemic. The lender posted a better-than-expected pre-tax profit before tax for the three months to March 31 of ended March 31 of £2.4bn, up from £923m pounds a year (consensus: £1.76bn). Unlike sector peers Lloyds and NatWest, Barclays did not release any cash set aside to cover potential bad loans from the pandemic. To take note of, Richard Hunter at Interactive Investor pointed out how Barclays shares had already run up 71% over the 12 months preceding Friday's results.

AstraZeneca said it expected performance to improve as the drugs company reported "robust" revenue growth for the first quarter. Revenue increased 15% to $7.3bn in the three months to the end of March, or by 11% excluding currency movements. At constant currency and excluding the Covid-19 vaccine revenue rose 7% to $7.05bn. The company reiterated its full-year guidance and predicted a "performance acceleration" in the second half.

Smurfit Kappa said corrugated volumes grew around 7% in its first quarter on Friday, in both Europe and the Americas. Containerboard prices had increased in the first quarter and again at the start of the second quarter, as a result of strong demand and higher recovered fibre and other costs, with the company saying its was "progressively recovering" those costs through its corrugated box system. However, it said the industry was also experiencing supply disruptions and shortages of packaging papers globally.

Hikma Pharmaceuticals said it made a good start to 2021 and that annual revenue from generic treatments would be at the top of guidance. The drugs company said its injectables business was performing well with product launches and general demand in the US partly offsetting reduced demand for Covid-19 related products and the gradual return of elective surgeries.

Smurfit Kappa reported first quarter corrugated volume growth of around 7% in both Europe and the Americas in its first quarter on Friday. The packaging giant said containerboard prices had increased in the quarter, and again at the start of the second quarter, as a result of strong demand and higher recovered fibre and other costs.

Valve and instrumentation maker Rotork said first quarter performance continued to improve in line with expectations despite the impact of the Covid-19 pandemic. Revenue was up mid-single digits year-on-year on an organic constant currency basis, in part reflecting the weighting of first half 2020 sales to the second quarter.

Market Movers

FTSE 100 (UKX) 6,982.51 0.30%
FTSE 250 (MCX) 22,438.65 0.20%
techMARK (TASX) 4,352.37 0.66%

FTSE 100 - Risers

AstraZeneca (AZN) 7,622.00p 3.03%
Smurfit Kappa Group (CDI) (SKG) 3,671.00p 3.00%
Imperial Brands (IMB) 1,505.00p 2.38%
British American Tobacco (BATS) 2,686.00p 2.28%
Johnson Matthey (JMAT) 3,284.00p 1.77%
BAE Systems (BA.) 506.60p 1.75%
BP (BP.) 307.15p 1.71%
Hikma Pharmaceuticals (HIK) 2,399.00p 1.44%
M&G (MNG) 214.70p 1.32%
Severn Trent (SVT) 2,449.00p 1.24%

FTSE 100 - Fallers

Barclays (BARC) 178.16p -5.60%
Flutter Entertainment (CDI) (FLTR) 15,140.00p -1.27%
Aveva Group (AVV) 3,504.00p -1.07%
Anglo American (AAL) 3,114.00p -0.88%
Polymetal International (POLY) 1,507.50p -0.82%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,405.00p -0.78%
London Stock Exchange Group (LSEG) 7,416.00p -0.70%
Rio Tinto (RIO) 6,115.00p -0.67%
JD Sports Fashion (JD.) 921.20p -0.50%
BHP Group (BHP) 2,198.00p -0.48%

FTSE 250 - Risers

Diversified Gas & Oil (DGOC) 123.00p 3.89%
National Express Group (NEX) 302.80p 2.30%
Meggitt (MGGT) 463.40p 2.30%
FirstGroup (FGP) 76.45p 2.21%
LXI Reit (LXI) 136.80p 1.94%
Tullow Oil (TLW) 57.20p 1.82%
Computacenter (CCC) 2,706.00p 1.81%
Rathbone Brothers (RAT) 1,708.00p 1.55%
Oxford Biomedica (OXB) 1,074.00p 1.51%
Convatec Group (CTEC) 218.40p 1.49%

FTSE 250 - Fallers

Rotork (ROR) 347.20p -2.53%
TBC Bank Group (TBCG) 1,010.00p -1.94%
CMC Markets (CMCX) 470.00p -1.47%
Plus500 Ltd (DI) (PLUS) 1,381.00p -1.46%
Carnival (CCL) 1,676.00p -1.41%
Dixons Carphone (DC.) 141.00p -1.40%
WH Smith (SMWH) 1,789.50p -1.38%
888 Holdings (888) 425.80p -1.34%
Baillie Gifford US Growth Trust (USA) 332.50p -1.34%
Avon Rubber (AVON) 3,224.00p -1.16%

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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