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(Alliance News) - Stock prices in London remained in the red at midday on Friday as widened US Treasury yields increased fears of higher interest rates, while a sharp spike in new Covid-19 infections on the continent was another cause for concern.
Millions across France were preparing to enter a new month-long, limited lockdown from Saturday after the country recorded its highest new caseload in nearly four months. Non-essential businesses will close in Paris and other areas hit by the new restrictions, mainly in northern France, although schools will stay open.
The 10-year US Treasury yield stood at 1.69% on Friday at midday, narrowing from 1.72% at the same time on Thursday, but the yield had jumped above 1.75% at its high on Thursday, reaching its widest point since January 2020. This was after the US Federal Reserve expressed its willingness to allow an overshoot in inflation.
The FTSE 100 index was down 51.06 points, or 0.8%, at 6,728.71. The mid-cap FTSE 250 index was down 98.95 points, or 0.5%, at 21,469.61. The AIM All-Share index was 0.5% lower at 1,193.16.
The Cboe UK 100 index was down 0.7% at 671.32. The Cboe 250 was down 0.5% at 19,154.66, and the Cboe Small Companies down 0.3% at 13,914.54.
In mainland Europe, the CAC 40 in Paris was down 0.4%, while the DAX 30 in Frankfurt 0.5% lower.
In the FTSE 100, National Grid was the best performer, up 2.0%, after HSBC upgraded the UK power lines operator to Buy from Hold.
National Grid on Thursday had said it agreed to buy Britain's largest electricity distributor, Western Power Distribution, from PPL Corp for GBP7.8 billion and sell its Rhode Island utility, Narragansett Electric, to PPL for USD3.8 billion.
National Grid also said it will launch a process later this year to sell a majority stake in National Grid Gas, as it looks to boost its electricity assets to about 70% from around 60% of its overall portfolio.
NatWest was up 1.2% at 192.75 pence after the UK government cut its stake in the high street bank to 59.8% from 61.7%.
NatWest said it agreed with the Treasury to make an off-market purchase of 590.7 million shares from UK Government Investments at Thursday's closing market price of 190.50 pence per share, worth GBP1.12 billion.
The UK government now holds 6.92 billion NatWest shares. NatWest said it plans to cancel 390.7 million of the UK government shares and hold the remaining 200 million in treasury.
The company, formerly known as Royal Bank of Scotland, said the off-market purchase of shares also required it to contribute GBP500 million to its main pension scheme, under an agreement announced back in 2018.
Oil majors BP, Royal Dutch Shell 'A' and 'B' were among the worst performers among London large-caps, with shares down 2.5%, 2.0% and 1.8%, respectively, tracking spot oil prices lower.
Brent oil was quoted at USD63.35 a barrel on Friday at midday, down sharply from USD65.14 late Thursday.
London Stock Exchange Group was 1.7% lower at 7,244.00p. Thomson Reuters, Blackstone and members of Refinitiv's management team have sold GBP745 million worth of LSEG shares.
JPMorgan Securities placed 10.4 million shares at 7,150 pence each, in a deal worth GBP745 million. The stock exchange operator will not receive any proceeds from the sale, as they were existing shares.
The placing shares were sold by Thomson Reuters, members of Refinitiv management, and York Holdings II and York Holdings III. These are entities owned indirectly by BCP York Holdings, which itself is owned by a consortium of investment funds affiliated with Blackstone.
Following completion of the placing, the sellers will own in aggregate around a 30% economic interest and a 22% voting interest in LSEG.
Scottish Mortgage Trust was 1.2% lower, tracking a fall in Tesla and Amazon.com, in which it owns shares. The trust has a 5.1% stake in Elon Musk's Tesla and a 5.9% holding in Jeff Bezos's Amazon. Shares in Tesla and Amazon were up 0.8% and 0.6%, respectively, in pre-market trade in New York on Friday, having fallen by 6.9% and 3.4% on Thursday.
In addition, Scottish Mortgage said its joint portfolio manager, James Anderson, is stepping down from the trust's investment manager, Baillie Gifford & Co.
Baillie Gifford noted Anderson joined Baillie Gifford in 1983. He has been the portfolio manager of Scottish Mortgage since 2000 and, since 2015, joint portfolio manager with fellow partner Tom Slater.
In the FTSE 250, Sanne Group was up 5.2% after fund administrator reported a leap in profit in 2020 thanks to increased demand for asset management services.
Pretax profit more than doubled to GBP20.5 million, from GBP9.6 million in 2019. Revenue increased 7.7% to GBP169.7 million from GBP157.5 million.
London-based Sanne proposed a final dividend of 9.9p per share, bringing the total payout for 2020 to 14.7p per share and up from the 14.1p per share paid out for 2019.
Apax Global Alpha was the worst performer, down 8.0% at 192.75p after Jefferies placed 32.7 million shares in the private equity and derived investments firm at 180p each.
The shares were owned by Future Fund Board of Guardians, and following the placing, Future Fund no longer holds any shares in Apax Global Alpha. Future Fund is Australia's sovereign wealth fund, managing six public asset funds. The Board of Guardians is responsible for deciding how to invest each fund.
The pound was quoted at USD1.3912 on Friday at midday, down from USD1.3949 at the London equity market close on Thursday, after the UK government on Thursday confirmed a vaccine supply shortfall from India which will hit the inoculation drive in April.
The state-run National Health Service warned in a letter to local vaccination centres that doses will be "significantly constrained" from March 29 for four weeks.
The next phase of the inoculation campaign, covering people in their 40s, will have to be suspended until May, the letter said.
The problem is linked to a delay in getting new jabs from the Serum Institute of India by UK-based drugmaker AstraZeneca - the same company whose supply issues have caused anger in the EU.
AstraZeneca's jab, developed with Oxford University, provides the bulk of Britain's vaccination campaign and a large portion of its supply has been produced by the Serum Institute of India, the world's biggest vaccine maker.
Shares in AstraZeneca were flat.
UK Prime Minister Boris Johnson has insisted the vaccination programme and route out of lockdown remain on track despite a shortfall in the expected supply of jabs.
On the continent, meanwhile, EU's leading states are to restart their roll-out of the AstraZeneca Covid-19 vaccine after Europe's medicines regulator concluded it was "safe and effective". Germany, France, Italy and Spain said they would resume using the jab.
Analysts at Oanda Markets said: "European stocks are heading lower on Friday, paring some of their weekly gains. Rising concerns over resurging Covid in Europe is hitting sentiment, with investors taking risk off the table ahead of the weekend. France imposed more regional curbs in an attempt to stem the spread of the virus, which has only been made worse by the suspension of the AstraZeneca vaccine."
The euro was priced at USD1.1887, falling from USD1.1935. Against the yen, the dollar was trading at JPY108.90, marginally lower from JPY108.95.
Gold was priced at USD1,741.05 an ounce Friday at midday, up from USD1,735.34 late Thursday.
US stock market futures were pointed to a higher open following a sharp sell-off in tech stocks on Thursday.
The Dow Jones Industrial Average was called up 0.1%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.6%.
Nike will be in focus after the sportswear maker late on Thursday said its third-quarter performance in Europe and North America was hurt by Covid-19, though soaring sales in China helped lift revenue. The stock is 2.7% lower in pre-market trade.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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