ADVFN Morning London Market Report: Thursday 11 February 2021

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London open: Stocks edge higher as investors eye jobless claims


London stocks edged higher in early trade on Thursday as investors awaited fresh catalysts.

At 0920 GMT, the FTSE 100 was up 0.3% at 6,543.54.

Milan Cutkovic, market analyst at Axi, said: “With major Asian markets shut for a public holiday and the earnings season slowly coming to an end, investors are waiting for the next big catalyst to propel stocks to new highs.

“The economic calendar for the coming days is looking light and market participants will likely shift their focus back to the stimulus negotiations in Washington DC as well as the global vaccination efforts.

“While investors have accepted that the negotiations around the $1.9 trillion coronavirus relief plan could take a couple of weeks, their patience could soon run thin amid a lack of other major catalysts.

“US President Biden held his first official phone call with Chinese President Xi Jinping yesterday. With US-China relations at their lowest point in decades, many challenges lie ahead.”

There are no major UK macro releases due, but investors will eye the latest initial jobless claims in the US at 1330 GMT.

On the corporate front, pharmaceuticals giant AstraZeneca rallied as it posted a spike in final revenues, fuelled by strong demand for its oncology drugs, and predicted further strong growth for the current year.

Relx – formerly Reed Elsevier – also rallied after well-received full-year results, along with Coca-Cola HBC.

Elsewhere, product testing and certification company Intertek was boosted by an upgrade to”overweight’ at Morgan Stanley.

Royal Mail surged after saying it expects full-year group adjusted profit to be “well in excess” of £500m after a strong rise in parcel revenues in Christmas period.

Polypipe gained after the piping manufacturer said it raised around £96.3m in a placing to help fund the £210m acquisition of magnetic filters maker ADEY.

On the downside, banks lost ground, with NatWestBarclays and Lloyds all weaker.

SSP shares slumped after the Upper Crust and Ritazza owner said it is considering debt and equity funding options following a report about a possible £500m equity raise.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Coca-cola Hbc Ag +4.87% +110.00 2,370.00
2 Intertek Group Plc +3.04% +170.00 5,760.00
3 Kingfisher Plc +2.26% +6.20 280.00
4 Experian Plc +2.05% +52.00 2,585.00
5 Halma Plc +1.87% +46.00 2,511.00
6 Diageo Plc +1.66% +49.50 3,030.00
7 Antofagasta Plc +1.63% +25.00 1,560.00
8 Bunzl Plc +1.62% +37.00 2,321.00
9 Astrazeneca Plc +1.61% +117.00 7,364.00
10 Ocado Group Plc +1.59% +40.00 2,551.00


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Land Securities Group Plc -1.81% -11.30 612.70
2 British Land Company Plc -1.52% -7.10 461.00
3 Carnival Plc -1.29% -17.00 1,305.50
4 Royal Dutch Shell Plc -1.26% -17.20 1,346.00
5 Easyjet Plc -1.26% -9.60 753.40
6 Royal Dutch Shell Plc -1.24% -16.20 1,289.80
7 Barclays Plc -1.23% -1.82 145.86
8 Hiscox Ltd -1.23% -11.80 946.60
9 Whitbread Plc -1.22% -39.00 3,145.00
10 Rolls-royce Holdings Plc -1.21% -1.12 91.68


Europe open: Shares edge higher as investors eye US jobless data

European shares opened slightly higher on Thursday as investors eyed US jobless data later in the day for any sign of an economic recovery from the Covid-19 pandemic.

The benchmark Stoxx 600 index was up 0.37% in early trade, with most regional bourses following suit. US futures indicated a cautious start.

In equity news, shares in Anglo-Swedish drugs maker AstraZeneca rose 1.92% as the company posted a spike in final revenues, fuelled by strong demand for its oncology drugs, and predicted further strong growth for the current year.

The company, which last year developed a Covid-19 vaccine in conjunction with Oxford University, said total revenues rose 9% to $26.6bn in the year to December 31, 2020. Product sales rose 10% to $25.9bn.

Royal Mail shares rose 6.47% as the delivery firm said it expected full-year group adjusted profit to be “well in excess” of £500m after a strong rise in parcel revenues over Christmas period.

Coca-Cola Co shares rose 5.4% as the drinks giant forecast a return to organic revenue growth this year.

French electricals distributor Rexel soared as the company’s fourth quarter sales exceeded expectations.

Germany’s Commerzbank fell 2.9% as the lender said its loss deepened in the fourth quarter.


US close: Stocks end mixed as some tech plays lose favour

Wall Street stocks finished in a mixed state on Wednesday, amid a rotation out of technology stocks and some key inflation data.

At the close, the Dow Jones Industrial Average was up 0.2% at 31.437.80, while the S&P 500 slipped 0.04% to 3,909.88 and the Nasdaq Composite was 0.25% weaker at 13,972.53.

The Dow closed 61.97 points higher on Wednesday, slightly reversing Tuesday’s loss that narrowly put a stop to a multi-day winning streak for the index.

On the macro front, increased mortgage interest rates over four of the first six weeks of 2021 seemingly dented mortgage demand, with overall mortgage application volume falling 4.1% week-on-week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $548,250 increased to 2.96% from 2.92%, according to the Mortgage Bankers Association.

Elsewhere, the core consumer price index rose 0.3% on a monthly basis, matching expectations from economists, but increased 1.4% year-on-year in January, according to the Labor Department, as the broader CPI once again got a boost from higher gasoline prices.

Lastly, wholesale inventories in the US increased 0.3% month-on-month in December, according to the Census Bureau, after being unchanged in November and above a preliminary estimate of a 0.1% advance.

Despite solid earnings from several corporate giants, driving the market on Wednesday was a rotation out of tech stocks, with shares in Amazon down 0.56%, Apple off 0.46% and Microsoft losing 0.39%.

Corporate earnings on the day saw TwitterLyftYelpMattel and Cisco in focus, after they all posted better-than-expected earnings overnight.

Twitter was up 13.2% and Lyft added 4.79%, while Yelp lost 4.6%, Mattel slipped 2.07% and Cisco was 2.6% weaker by the close.

Coca-Cola was 0.18% weaker after it topped fourth-quarter earnings per share estimates by $0.05 despite posting a 5% drop in revenues.

Under Armour gained 6.96% after it came in ahead of quarterly revenue estimates on the back of an online sales boost.

General Motors was 2.1% lower even after it reported a 22% increase in quarterly revenue.


Thursday newspaper round-up: Bitcoin, KPMG, SSP

The governor of the Bank of England has called EU demands for City banks to comply with Brussels regulations unacceptable, in a combative speech backing the government’s hardline stance in the next round of Brexit talks. Andrew Bailey said the UK should refuse to allow Brussels to restrict how the UK industry develops and look instead to global financial regulators as the main rule makers. – Guardian

KPMG has confirmed that its chairman is stepping aside after the accounting giant launched an investigation into controversial comments he made to staff in a virtual meeting this week. Bill Michael, who took over as chairman in 2017, told staff on Monday to “stop moaning” about the pandemic and the impact of lockdown on people’s lives, adding that they should stop “playing the victim card”. – Guardian

Silicon Valley’s love affair with Bitcoin stepped up a gear on Wednesday after Twitter said it could follow Tesla’s lead with a major investment in the digital currency. Twitter’s finance chief Ned Segal said the firm is watching Tesla’s move closely and had long considered buying Bitcoin. – Telegraph

The airport and railway caterer behind Upper Crust and Camden Food Co is considering tapping its shareholders for up to £500 million amid continuing turmoil in the travel market. SSP Group, which raised £216 million of equity in March, said last night that it had made no decision about a fundraising but given the “significant uncertainty” around Covid it “continues to evaluate a range of funding options, both debt and equity, that would further strengthen its balance sheet”. – The Times

Robert Jenrick is facing growing opposition from high street businesses over government plans to allow town centres to be converted into housing without planning permission. Business organisations representing 27 different professions and traders including booksellers, butchers, cinema operators and cycle traders have written to the housing secretary urging him to reconsider the policy. – The Times


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