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(Alliance News) - Stocks in London were mixed at midday on Wednesday with the FTSE 100 surrendering earlier gains amid fears of tighter Covid-19 restrictions in the UK, while attention turns again to earnings from the big US banks.
The large-cap FTSE 100 index was down 10.73 points, or 0.2%, at 5,958.98. The mid-cap FTSE 250 index was up 53.87 points, or 0.3%, at 17,944.73. The AIM All-Share index was down 0.6% at 984.05.
The Cboe UK 100 index was down 0.1% at 592.02. The Cboe 250 was up 0.3% at 15,183.61, and the Cboe Small Companies down 0.2% at 9,445.27.
In mainland Europe, the CAC 40 index in Paris was down 0.3% and the DAX 30 in Frankfurt was down 0.2%.
On the London Stock Exchange, Just Eat Takeaway.com was the best blue-chip performer, up 5.5% after saying order growth accelerated in the third quarter.
The online food ordering platform said 46% more orders were placed in the third quarter than a year earlier, due to strong demand in online orders as a result of coronavirus social distancing measures in restaurants. Order growth accelerated from an increase of 32% in the first half of 2020, with orders in the third quarter up 47% in Germany on a year before, 98% in Canada and 43% in the UK.
The company said it continued to enhance its restaurant selection, driven by several new partnerships, including the roll-out of around 800 McDonald's restaurants and 300 Greggs locations in the UK.
Bunzl was up 5.0%, after the FTSE 100 distribution firm reported a rise in third-quarter sales due to strong demand for Covid-19 personal protection equipment.
For the three months ended September, revenue for the third quarter was up 4.0% at actual exchange rates and 8.8% at constant exchange rates. Underlying revenue increased strongly by 8.0% at constant exchange rates.
Bunzl attributed the performance to strong sales of Covid-19 related products, from a combination of smaller orders and the more exceptional larger orders. These included gloves, face coverings and hand sanitizer.
DCC was up 3.0% after Credit Suisse raised the Irish support-services firm to Outperform from Neutral.
In the FTSE 250, Kainos was the standout performer, up 28%. The IT services provider said it expects annual results to beat market consensus.
Kainos noted a "structural shift of digital adoption" was one of the keys to "very strong" trading since its current financial year kicked off on April 1. Digital Services clients have continued "to prioritise digital transformation programmes in the NHS and public sector", Kainos said, noting that it is a "trusted partner" of the UK government.
Further, one-off cost cuts have been implemented, including reduced recruitment and travel spend.
"We therefore expect results for the full year ending March 31, 2021 to be materially ahead of current consensus of revenue and significantly ahead of adjusted profit forecasts," Kainos predicted.
At the other end of London midcaps, Cineworld Group was the worst performer, down 7.5%. The UK-based cinema chain was suffering from a negative read-across after US rival AMC warned it could run out of cash by the end of the year or by early 2021 if moviegoers do not return to theatres in greater numbers. AMC owns Odeon in the UK, and its shares closed down 13% on Tuesday in New York.
On AIM, ASOS was down 8.4% after the online fashion retailer kept a lid on expectations for the new year and beyond, owing to economic uncertainty, particularly affecting its target market of young adults.
The fast-fashion retailer's annual profit multiplied and its revenue jumped almost 20%, as it shrugged off "performance issues" from last year.
ASOS said pretax profit in the year that ended August 31 multiplied to GBP142.1 million from GBP33.1 million. About GBP50 million in a "non-strategic" costs were not repeated in the most recent financial year, ASOS noted, as an efficiency drive "exceeded our initial expectations".
The company added it has made a "solid start" to the new year but is tempering expectations for now given the uncertainty caused by Covid-19 and the "economic prospects and lifestyles of 20-somethings" being set for disruption.
The pound was quoted at USD1.2955 on Wednesday at midday, down from USD1.2978 at the London equities close Tuesday, amid no-deal Brexit fears. Sterling recovered somewhat from an intraday low of USD1.2862 in early morning trade.
UK Prime Minister Boris Johnson will talk to EU chief Ursula von der Leyen on Wednesday, as both sides blame each other for blocking progress in post-Brexit trade talks ahead of a key EU summit.
The pair's call comes on the eve of Johnson's self-imposed deadline for signs of a breakthrough in the talks and was announced after European ministers warned that time was running out for a deal.
"The PM will speak with Ursula von der Leyen tomorrow afternoon. As you'll recall, they agreed to stay in touch on the progress in the negotiations when they spoke earlier this month," Downing Street said. An EU official confirmed the call.
The 27 EU leaders are to meet in Brussels on Thursday, the same day that Johnson has cited as the deadline for a deal breakthrough.
On the domestic front, Johnson faces greater pressure to impose stricter restrictions in the UK with a "circuit-breaker" lockdown tipped to save thousands of lives by the end of the year, scientists advising the government have calculated.
As the three-tier Covid alert level system comes into force across England, Johnson is facing calls to go further by introducing a fortnight of nationwide curbs to bring the coronavirus resurgence under control.
Downing Street is understood to be keeping the idea on the table, after Labour leader Keir Starmer said a two- to three-week national lockdown over the October half term was needed to prevent a "sleepwalk into a long and bleak winter".
A paper by members of the Scientific Advisory Group for Emergencies reportedly calculates that more than 7,000 lives could be saved if schools are closed and people are ordered to stay at home from October 24 for two weeks.
"With the pound on the slump, the big question is where now for the UK economy. The lack of any major progress in Brexit talks, coupled with a rise in unemployment, do little to inspire confidence going forward. With science experts calling for a 'circuit breaker' two-week nationwide lockdown to reset Covid cases, the weakness in the pound also reflects the growing fear of another period of lost growth if the recent lockdowns are anything to go by," said IG Group's Josh Mahony.
The euro was priced at USD1.1730 at midday Wednesday in London, lower from USD1.1741 late Tuesday. Against the yen, the dollar was trading at JPY105.45, soft from JPY105.53.
Wall Street looks set for a subdued open as US earnings season continues in earnest, with third-quarter earnings due from major banks Goldman Sachs, Bank of America and Wells Fargo before the market open in New York.
Ahead of their announcements, the Dow Jones Industrial Average and the S&P 500 were called flat, while the Nasdaq Composite was pointed up 0.1%.
In commodities, Brent oil was quoted at USD42.22 a barrel midday Wednesday in London, lower from USD42.30 late Tuesday. Gold was trading at USD1,896.02 an ounce, up from USD1,890.88.
The global economic calendar for Wednesday has US producer prices at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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