ADVFN Morning London Market Report: Monday 11 January 2021

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London open: Stocks fall amid prospect of tighter restrictions

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London stocks fell in early trade on Monday amid reports that Covid-19 restrictions in England were set to get even tougher.

At 0840 GMT, the FTSE 100 was down 0.5% at 6,841.21, while sterling was 0.5% weaker versus the dollar at 1.3497.

Investors were digesting reports over the weekend that the government is considering tightening restrictions even further, with masks in certain outdoor settings, curfews and even a ban on people leaving the house more than once a week said to have been discussed.

Spreadex analyst Connor Campbell said: “Without the artificial buzz of the New Year, or a seismic event like a pair of Senate races, the markets were forced to contend with the day-to-day realities of trading in 2021.

“For the FTSE, that means the prospect of even tighter restrictions in the UK, as experts believe the current level of lockdown isn’t having the desired effect. Practically, any further measures the government could implement should have minimal impact on the blue chip index’s individual components. Symbolically, however, the shift towards harsher constraints may undermine the FTSE’s recent growth.”

Campbell said things could get worse this afternoon if Europe takes its cues from the US. He noted the Dow is heading for a 0.5% drop, one that would knock it below its 31,000 milestone. ”

Part of that will be a natural reaction to its recent record-breaking gains; and part of it will come from anxiety over the tinderbox political situation domestically.

“The Democrats are moving to try and impeach Donald Trump before Joe Biden’s inauguration on January 20th. And while that won’t have too much of an effect on actual governance – something Trump hasn’t been interested in since November anyway – it is indicative of an unstable, and potentially violent, few months in America.”

In equity marketsSmith & Nephew lost ground after the medical technology company said it expects to report a 7% decline in fourth-quarter underlying revenue and a 12% drop in full-year revenues, as more medical procedures are postponed due to rising numbers of coronavirus infections.

Ladbrokes owner Entain was in the red after its chief executive quit, with the company a takeover target for MGM Resorts International.

Travel and leisure stocks also took a hit amid the prospect of tighter restrictions, with TUICineworld and Mitchells & Butlers all lower.

On the upside, JD Sports rallied after saying it was confident headline pre-tax profit for the year to 30 January 2020 will be “significantly” ahead of current market expectations of around £295m as demand has remained robust throughout the second half.

Signature Aviation surged after Gatwick Airport co-owner Global Infrastructure Partners has swooped to buy the company for $4.63bn (£3.43bn), beating a rival offer from private equity outfit Blackstone Group and Microsoft founder Bill Gates.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Itv Plc +2.50% +2.75 112.75
2 Standard Life Aberdeen Plc +0.92% +2.80 307.60
3 Morrison (wm) Supermarkets Plc +0.88% +1.60 184.20
4 Astrazeneca Plc +0.75% +56.00 7,527.00
5 Direct Line Insurance Group Plc +0.71% +2.40 338.90
6 Marks And Spencer Group Plc +0.69% +0.95 138.85
7 Segro Plc +0.64% +6.20 969.40
8 London Stock Exchange Group Plc +0.61% +56.00 9,262.00
9 Ocado Group Plc +0.52% +13.00 2,494.00
10 Melrose Industries Plc +0.51% +0.95 187.00

 

Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Tui Ag -6.18% -23.50 356.50
2 Smith & Nephew Plc -2.96% -48.00 1,571.50
3 International Consolidated Airlines Group S.a. -2.07% -3.25 153.50
4 Easyjet Plc -1.86% -14.60 772.00
5 Compass Group Plc -1.80% -26.50 1,447.00
6 Sainsbury (j) Plc -1.73% -4.20 238.60
7 Carnival Plc -1.70% -22.50 1,300.50
8 Fresnillo Plc -1.66% -20.00 1,184.50
9 British Land Company Plc -1.63% -7.60 457.50
10 Rolls-royce Holdings Plc -1.58% -1.70 105.60

 

Monday newspaper round-up: Small firms, Post Office, M&G

Small businesses and manufacturers are bracing themselves for a fight for survival this year, according to fresh survey data, as they negotiate the twin threats of Covid-19 and weaker post-Brexit trade with the EU. More than 250,000 small firms expect to fold without further government financial support, according to a quarterly poll by the Federation of Small Businesses (FSB). – Guardian

A surge in online shopping helped to push up the Post Office’s income over Christmas, as web-based retailers escaped the Covid-19 restrictions that bedevilled the high street. In the four weeks to 27 December, the Post Office recorded 51.3m customer transactions, just 0.5% below the same period of 2019, with sales up 17% to £66.3m. – Guardian

Fund manager M&G has blamed City rules as it refuses to hand investors back money from its suspended £2.1bn property fund, almost a fifth of which is now held in cash and earning no returns. The M&G Property Portfolio fund has blocked investor withdrawals since December 2019, when a raft of real estate funds were gated as plummeting retail property valuations prompted a wave of redemption requests. – Telegraph

The private equity owner of TGI Fridays in Britain plans to put the bar and restaurant chain up for sale this year as it winds down its portfolio after succumbing to an attack by a corporate raider. Electra Private Equity, a London-listed investment vehicle, is also aiming to sell off its other assets before the year is out and return the proceeds to shareholders. – The Times

MPs have opened an investigation into the insolvency profession after criticism from businesses about their objectivity standards, The Times has learnt. A focus is likely to be on the relationship between insolvency practitioners and the lending banks that have the power to appoint them. – The Times

 

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