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London open
London stocks were steady in early trade on Tuesday following solid gains in the previous session.
At 0905 GMT, the FTSE 100 was up just 0.1% at 6,722.47. Sterling was playing its part in holding back the index, trading up 0.5% against the dollar at 1.3892. A stronger pound tends to dent the top-flight index as around 70% of its constituents derive most of their earnings from overseas.
Spreadex analyst Connor Campbell said: “It’s no surprise that the markets have paused this Tuesday, catching their breath after sprinting to the close on Monday.
“Looking to inject the markets with a bit of energy later on, the Dow Jones is set to counter Europe’s sluggish start with a 180 point rise when the bell rings on Wall Street. Still celebrating Joe Biden’s stimulus package, that’d leave the Dow within touching distance of 32,000, and back in the running for an record peak of its own.”
In equity markets, M&G was the top performer as the investment manager’s full-year operating profit came in ahead of consensus expectations.
Avast gained after saying it had agreed to sell its Family Safety Mobile Business to Smith Micro for $66m.
Domino’s Pizza rallied after it unveiled a £45m share buyback and a rise in annual profit as it announced plans to open another 200 stores. The pizza chain also said it was selling its Swedish unit for €2m (£1.8m) in cash as it looks to focus solely on its UK and Ireland operations.
Ultra Electronics pushed higher after the defence contractor reported a jump in full-year profit and revenue as it won a number of new contracts.
On the downside, miners slumped, with BHP, Rio, Glencore, Anglo American and Antofagasta all weaker as metals prices fell.
Education publisher Pearson was knocked lower by a downgrade to ‘hold’ at Societe Generale, while exploration and development firm Cairn Energy lost ground after saying it swung to a full-year operating loss in 2020.
Asset manager Standard Life Aberdeen was trading a little lower as it declared a dividend but reported lower annual profits and revenues.
ITV was also in the red as it posted a decline in full-year profit and revenue as it took a hit from the Covid-19 pandemic, although the broadcaster’s adjusted group earnings before interest, tax and amortisation came in ahead of analysts’ expectations.
Top 10 FTSE 100 Risers
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| 76.4% of retail CFD accounts lose money. | |
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Kingfisher Plc | +3.97% | +10.90 | 285.20 |
| 2 |  |
Fresnillo Plc | +3.67% | +33.00 | 933.20 |
| 3 |  |
Scottish Mortgage Investment Trust Plc | +3.13% | +33.00 | 1,089.00 |
| 4 |  |
Bunzl Plc | +2.70% | +58.00 | 2,208.00 |
| 5 |  |
Sse Plc | +2.64% | +34.50 | 1,343.00 |
| 6 |  |
Bt Group Plc | +2.62% | +3.60 | 140.90 |
| 7 |  |
Sainsbury (j) Plc | +2.43% | +5.50 | 231.70 |
| 8 |  |
Ashtead Group Plc | +2.35% | +95.00 | 4,131.00 |
| 9 |  |
Carnival Plc | +2.29% | +38.00 | 1,694.50 |
| 10 |  |
Rightmove Plc | +2.14% | +12.00 | 571.60 |
Top 10 FTSE 100 Fallers
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| 76.4% of retail CFD accounts lose money. | |
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Pearson Plc | -4.10% | -33.20 | 775.60 |
| 2 |  |
Itv Plc | -2.39% | -2.90 | 118.60 |
| 3 |  |
Micro Focus International Plc | -1.91% | -9.30 | 478.20 |
| 4 |  |
Bhp Group Plc | -1.62% | -36.50 | 2,218.50 |
| 5 |  |
Barclays Plc | -1.53% | -2.72 | 175.20 |
| 6 |  |
Hiscox Ltd | -1.09% | -10.00 | 907.60 |
| 7 |  |
Glencore Plc | -1.08% | -3.15 | 289.00 |
| 8 |  |
Rio Tinto Plc | -1.04% | -63.00 | 5,977.00 |
| 9 |  |
Anglo American Plc | -0.99% | -30.00 | 2,988.50 |
| 10 |  |
Wpp Plc | -0.98% | -9.00 | 913.20 |
Europe open: Shares flat as miners fall on softer commodities
European shares were flat at the opening on Tuesday as mining stocks fell on weaker commodity prices.
The pan-European STOXX 600 was unmoved in early trade, with regional bourses mixed. US futures indicated a positive opening on Wall Street.
“It’s not a surprise that the markets have paused this Tuesday, catching their breath after sprinting to the close on Monday,” said Spreadex analyst Connor Campbell.
“Looking to inject the markets with a bit of energy later on, the Dow Jones is set to counter Europe’s sluggish start with a 180 point rise when the bell rings on Wall Street. Still celebrating Joe Biden’s stimulus package, that’d leave the Dow within touching distance of 32,000, and back in the running for an record peak of its own.”
Heavyweight miners Rio Tinto and BHP Group were down by more than 2%.
Shares in UK insurer and asset manager M&G rose more than 5% as the company reported a better-than-expected 31% fall in 2020 operating profit to £788m pounds in its first full year as a standalone company.
German automotive parts maker Continental AG fell 5.1% after it reported a 12.7% drop in group sales, thanks in part to falling revenue in the automotive, rubber and powertrain divisions.
US close: Stocks mixed amid elevated bond yields, stimulus headlines
Wall Street stocks turned in a mixed performance on Monday after the US Senate passed Joe Biden’s $1.9trn Covid relief bill over the weekend.
At the close, the Dow Jones Industrial Average was up 0.97% at 31,802.44, while the S&P 500 was 0.54% weaker at 3,821.35 and the Nasdaq Composite saw out the session 2.41% lower at 12,609.16.
The Dow Jones closed 306.14 points higher on Monday, extending gains recorded on Friday thanks to some solid non-farm payrolls data.
Optimism surrounding the passing of Biden’s stimulus package was initially offset by higher bond yields prior to the open, with the yield on the 10-year Treasury note hovering at just above 1.60% at the close of trading.
The Democrat-led House of Representatives was pegged to ink the bill later in the week, with the President expected to sign it into law before unemployment aid programs expire on 14 March.
Despite a continued rotation out of tech stocks amid the elevated bond yields, positive stimulus headlines did make an impact on major indices, bolstering Dow Jones stocks reliant on a strong economic recovery, with several retailers, energy companies and banks closing higher.
On the macro front, wholesale inventories rose 1.3% in January, according to the Commerce Department, indicating that inventory investment could potentially contribute to economic growth throughout the first quarter. The percentage of wholesale inventories going into the calculation of gross domestic product also increased 1.3%.
Tuesday newspaper round-up: Consumer spending, property prices, City of London
The prospects for a consumer spending boom after lockdown have been downplayed by a senior Treasury official, amid warnings that wealthier families have saved more than low-paid workers during the pandemic. Charlie Bean, a former Bank of England deputy governor who sits on the government’s budget responsibility committee, said it would take several years for households to spend £180bn in extra savings accumulated mainly by retirees and higher-paid workers during the crisis.- Guardian
Property prices in Yorkshire and the north-west could rise by almost 30% over the next five years, more than double the rate of growth in London, a leading property firm has predicted. Researchers at Savills had expected house prices to remain flat in 2021 across the UK, but measures to support the market including last week’s budget announcements, combined with the easing of lockdown measures, have led them to revisit their forecasts. – Guardian
The City of London has given the green light to more than 2m sq ft of new office space already this year, paving the way for a building boom despite the impact of Covid-19 on the Square Mile. Many large financial companies have signalled a move away from five-day weeks in the office, with several big names planning to move to smaller premises. None the less, in the first two months of 2021 the City of London Corporation’s planning committee has approved the creation of nearly 80pc of the total office space that it approved last year (2.6m sq ft). – Telegraph
Major banks that reserved spots at international schools in Frankfurt have not taken them up after a post-Brexit exodus from the City failed to materialise. Senior staff at three international schools in Frankfurt told Financial News they had not experienced a Brexit-related influx despite a surge of enquiries leading up to Brexit as lenders prepared to move London bankers to the continent. – Telegraph
New investors have poured £272 million into Starling, paving the way for a flotation of the digital bank created four years ago. The bank also made its valuation public for the first time, saying that it had been priced at £1.1 billion by investors, putting it into the sought-after category of so-called unicorns – startup or early stage businesses worth more than $1 billion. – The Times
