ADVFN Morning London Market Report: Monday 8 February 2021

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London open: Stocks edge higher on US stimulus optimism

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London stocks rose in early trade on Monday amid optimism over US stimulus, although gains were unspectacular.

At 0850 GMT, the FTSE 100 was up 0.4% at 6,513.69.

Spreadex analyst Connor Campbell said: “At the start of a slightly quieter week when it comes to data, the European markets continued to ignore the rampant spread of the various Covid variants, instead clinging onto their hopes that Biden will force through his fat stimulus package in the coming weeks.”

Campbell said the FTSE is being pinned back by concerns over the efficacy of the AstraZeneca/Oxford vaccine, “both in over-65s – a claim that has been challenged due to small sample sizes – and against the South African variant”.

It emerged over the weekend that South Africa has suspended use of the vaccine after a study showed it offered minimal protection against the strain.

In corporate news, miners were the standout gainers, with Anglo AmericanBHP and Glencore all higher.

Energy producer Drax gained after saying it was buying Canadian firm Pinnacle Renewable Energy for 11.30 Canadian dollars a share, valuing it at £226m.

Rolls-Royce was under pressure on news it is temporarily closing its jet engine factories for two weeks this summer as it moves to save cash amid the coronavirus pandemic.

Experian was in the red after the credit-checking firm said it is carrying out a forensic investigation following media reports of a data breach involving its Serasa business in Brazil, but that there is no evidence its technology systems have been compromised.

Online supermarket Ocado lost ground following a report the UK government is considering a tax raid on companies that have profited from the pandemic.

In broker note action, JD Sports was boosted by an upgrade to ‘outperform’ at RBC Capital Markets, while Marks & Spencer was hit by a downgrade to ‘sector perform’.

Housebuilder Barratt Developments was weaker after a downgrade to ‘hold’ at Jefferies, while rival Taylor Wimpey was lifted by an upgrade to ‘buy’.

Weir surged and Flutter Entertainment rallied after upgrades to’verweight’ at Morgan Stanley.

Lloyds was higher after an upgrade to ‘neutral’ at Goldman Sachs, and budget airline easyJet was knocked lower by a downgrade to ‘sell’ at Stifel.

Just Group was trading up after an initiation at ‘buy’ at Peel Hunt.

Smurfit and DS Smith were lower after downgrades at Bank of America Merrill Lynch, while Mondi was lifted by an upgrade to ‘buy’.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Anglo American Plc +3.44% +85.50 2,569.50
2 Evraz Plc +3.14% +15.80 519.00
3 Bhp Group Plc +2.49% +51.00 2,095.50
4 Bunzl Plc +2.39% +56.00 2,398.00
5 Mondi Plc +2.02% +35.50 1,789.00
6 Lloyds Banking Group Plc +2.00% +0.74 37.74
7 Rio Tinto Plc +1.96% +110.00 5,730.00
8 Smiths Group Plc +1.88% +28.00 1,514.00
9 Johnson Matthey Plc +1.63% +47.00 2,929.00
10 Bp Plc +1.61% +4.05 256.10

 

Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Marks And Spencer Group Plc -3.65% -5.05 133.30
2 Easyjet Plc -2.66% -22.00 806.00
3 Pearson Plc -2.29% -16.60 707.00
4 Fresnillo Plc -2.28% -23.50 1,006.50
5 Land Securities Group Plc -2.20% -13.80 614.80
6 Rolls-royce Holdings Plc -1.79% -1.68 92.22
7 Informa Plc -1.64% -8.60 515.20
8 Admiral Group Plc -1.63% -48.00 2,902.00
9 Smurfit Kappa Group Plc -1.60% -58.00 3,564.00
10 Barratt Developments Plc -1.55% -11.00 699.00

 

Europe open: Shares rise on Dialog Semi deal, US stimulus hopes

European shares started the week higher, boosted by a €4.9bn offer for Dialog Semiconductor and continuing optimism over the US Covid stimulus package successfully navigating Congress.

The pan-European STOXX 600 index rose 0.37%, with all major Continental bourses higher. Italy’s FTSE MIB outperformed with a 1.1% rise as Mario Draghi secured initial support from two key parties in his efforts to form a unity government.

Investors were also monitoring the $1.9trln Covid-19 US aid package, which was expected to be passed by lawmakers as soon as this month.

They had also appeared to shrugged off the spread of various covid variants and concerns over the efficacy of AstraZeneca‘s vaccine against a South African strain of the virus.

In equity news, shares in German computer chip maker Dialog Semiconductor soared 16% after it agreed a takeover by Japan’s Renesas Electronics Corp.

Italian banks were higher on hopes of political stability, with UniCredit and Banco BPM up more than 4%.

Rolls-Royce was under pressure on news it is temporarily closing its jet engine factories for two weeks this summer as it moves to save cash amid the coronavirus pandemic.

Experian was in the red after the credit-checking firm said it is carrying out a forensic investigation following media reports of a data breach involving its Serasa business in Brazil, but that there is no evidence its technology systems have been compromised.

(Michele Maatouk contributed to this report)

 

Monday newspaper round-up: Debt levels, UK takeovers, HSBC, Dr Martens

The government has sought to defend its record over Brexit after freight industry leaders claimed exports to the EU had nosedived since the transition period ended on 31 December. When Boris Johnson announced on Christmas Eve that he had secured a last-minute Brexit deal he insisted there would be “no non-tariff barriers” to trade with the EU. – Guardian

Britain’s economy is facing a lengthy recovery from the third coronavirus lockdown amid soaring levels of business debt after almost a year of economic turmoil caused by the pandemic. Figures from the accountancy firm EY show British businesses took on debt at more than twice the normal average growth rate since the crisis began and are on course to have borrowed £61bn in total by the end of 2021. – Guardian

The UK has had its busiest start to the year for takeovers since the 2008 financial crisis despite the Covid lockdown. The value of takeover deals involving a UK company hit $38.8bn (£28.2bn) from Jan 1 to Feb 5, according to Dealogic – a high not seen since the 2008 crash. – Telegraph

HSBC has come under fire from an international coalition of senior politicians over its decision to freeze the bank account of a prominent pro-democracy activist in Hong Kong. A group of more than 50 politicians including Sir Iain Duncan Smith, the former Tory leader, has written to Mark Tucker, chairman of HSBC, demanding that he unfreeze the accounts of Ted Hui and his family. – The Times

America’s largest money manager and Singapore’s sovereign wealth fund have emerged as leading shareholders in Dr Martens after its £3.7 billion float last month. GIC Private, which manages more than $100 billion of Singapore’s foreign exchange reserves, has acquired a stake of just over 4 per cent in the British boot company, according to a filing at the end of last week. The position, which ranks the fund as among Dr Martens’ top five shareholders, was worth £206 million at the close on Friday. – The Times

 

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