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(Alliance News) - Stocks in London ended lower on Tuesday with investors monitoring the deadly coronavirus crisis in India, while earnings season got well underway with a raft of household names updating the market.
The first emergency medical supplies arrived in India on Tuesday as part of a global campaign to staunch a catastrophic wave in the latest pandemic hotspot, with the US also pledging to export millions of AstraZeneca vaccine doses.
Crates of ventilators and oxygen concentrators from the UK were unloaded at a Delhi airport early Tuesday, the first emergency medical supplies to arrive in the country where infection and death rates are growing exponentially.
The explosion in infections in India - 350,000 new cases were recorded there on Tuesday alone - has driven a surge in global cases to 147.7 million and the virus has now killed more than 3.1 million people worldwide.
The FTSE 100 index closed down 18.15 points, or 0.3%, at 6,944.97. The FTSE 250 ended down 144.26 points, or 0.6%, at 22,433.08. The AIM All-Share closed marginally lower at 1,275.22.
The Cboe UK 100 ended down 0.5% at 689.70, the Cboe UK 250 closed down 0.7% at 20,063.70, and the Cboe Small Companies ended up 0.2% at 14,516.90.
In Paris the CAC 40 ended down 0.2%, while the DAX 30 in Frankfurt ended down 0.3%.
"It's been a pretty lacklustre day for markets in Europe today, with the FTSE 100 and DAX both drifting back on the back of a weaker Asia session, as concerns over events in India act as a drag on global recovery prospects," said CMC Markets analyst Michael Hewson.
"There may also be some anxiety over recent sharp rises in commodity prices, which are now starting to bleed into the agriculture sector, as both corn and wheat prices surge to multi year highs, largely over supply concerns due to unseasonably dry weather in North and South Dakota," Hewson added.
In the FTSE 100, HSBC Holdings ended the best performer, up 4.2%, after the Asia-focused bank demonstrated a "good start" to 2021 with quarterly profit sharply higher - boosted by credit releases - but left shareholders wanting more from its strategic review.
The bank said it expects to update shareholders on the progress of its new strategic plan in August, in the release of its interim results, but is confident its new direction and focus will lead to revenue growth.
HSBC said it is not planning quarterly dividends in 2021 but said it may consider an interim dividend. The bank paid a USD0.15 per share dividend for 2020, declared as an interim payout with its full year results in February.
Pretax profit in the three months to March 31 improved 79% to USD5.78 billion from USD3.23 billion the year before. In the first quarter, HSBC's expected credit losses came out as a net release of USD400 million compared to the mammoth USD3.0 billion charge seen a year before.
Entain closed up 1.4% after the Ladbrokes, Coral and Partypoker owner made an improved offer of GBP1.95 billion for the wagering and media division of Australian firm Tabcorp.
Tabcorp knocked back offers in the region of GBP1.68 billion for the division earlier this year, with the board saying they did not adequately value the business. In an announcement to the Australian Stock Exchange, the company said a revised offer had been made, and the board has not yet formed a view on the merits of the proposal.
Entain, which also runs Bwin and Sportingbet, said in February that it was in "early stage" discussions with Tabcorp.
At the other end of the large-caps, Aveva Group ended the worst performer, down 5.4%. The industrial software company said it expects to report broadly unchanged revenue for its recently ended financial year, demonstrating a recovery from the weak first half.
In a separate statement, the Cambridge, UK-based firm said Chief Executive Craig Hayman has decided to return to the US for personal reasons and will leave after the annual general meeting in July. His employment will cease at the end of January 2022.
Bunzl closed 4.4% lower after Morgan Stanley downgraded the distribution firm to Underweight from Equal Weight.
Whitbread ended down 3.3% after the Premier Inn owner posted a GBP1 billion annual loss due to stringent lockdown restrictions, but the prospect of 'staycations' this summer offers some hope.
Revenue for the financial year that ended February 25 plummeted 72% to GBP589.4 million from GBP2.07 billion the year before, sending Whitbread to a pretax loss of GBP1.01 billion from a profit of GBP280.0 million.
No payout was recommended for the recently-ended year, after a total dividend of 32.7p paid for the 2020 financial year.
Whitbread said dividends will not be paid during its current revolving credit facility covenant waiver period, which lasts until March 2023, as a condition agreed with lenders and pension trustees, or until the original covenant tests are passed.
BP closed down 0.4%. The UK oil major said it will start share buybacks after reducing net debt below USD35 billion, as it presses ahead with its net zero corporate ambitions.
BP reported a replacement cost profit for the first quarter of 2021 of USD3.33 billion, swinging from a loss of USD628 million a year ago, while underlying RC profit jumped to USD2.63 billion from USD791 million.
BP ended the period with net debt of USD33.31 billion, well down on the USD51.40 billion reported at the same date a year ago. BP's net debt stood at USD38.9 billion at the end of 2020. BP plans to buyback USD500 million of shares in the second quarter. It will provide an update on third-quarter buyback plans at the time of its second-quarter results, it said.
BP's dividend was held steady at 5.25 cents for the first quarter of 2021 with that paid out for the fourth quarter of 2020 - though half of the 10.50 cents dividend paid for the first quarter of 2020.
"Hitting its net debt target a year earlier is a good start and this is allowing the company to resume share buybacks in the second quarter. However, the outlook on cash is less positive for the second quarter and longer term it feels like something has got to give if BP is truly to complete its ambitious transformation into a zero-carbon business," said AJ Bell's Russ Mould.
"Investors may question whether BP is putting off difficult questions now rather than facing them full on and truly 'transforming while performing' as the company would have it," Mould added.
The pound was quoted at USD1.3915 at the London equities close, up from USD1.3885 at the close Monday.
Sterling was on the the front foot after a series of controversies at the heart of the UK government dented the currency last week.
First there was the Greensill Capital scandal, in which former prime minister David Cameron texted prominent UK government ministers, including Chancellor Rishi Sunak, on behalf of the financial firm that was employing him.
Pressed by Labour ministers to account for his involvement amid the Greensill lobbying scandal, Sunak stressed that he has "gone above and beyond in providing disclosure".
Then there was Bill Crothers, the senior civil servant who was found to have had a second job at Greensill. Finally, it was revealed that Prime Minister Boris Johnson had been texting with businessman James Dyson about UK tax laws.
"Sterling is showing tentative signs of stabilisation after political scandals led a decline late last week. Based on our financial fair value model, EUR/GBP currently trades 1.3% overvalued, suggesting some near-term support for sterling unless we see further allegations about the Conservative government. So far, it has been a rather challenging month for GBP, with the currency suffering first from concerns about the pace of the vaccination programme and now by a degree of political uncertainty," said analysts at ING.
The euro stood at USD1.2085 at the European equities close, rising from USD1.2075 late Monday. Against the yen, the dollar was trading at JPY108.50, up from JPY108.18 late Monday.
Stocks in New York were lower at the London equities close ahead of earnings results from tech giants Microsoft and Google parent Alphabet after the market close.
The DJIA was down 0.1%, the S&P 500 index down 0.2% and the Nasdaq Composite down 0.3%.
Among individual companies, Tesla fell 2.8% despite reporting record profits on a huge jump in revenue late Monday. Some analysts focused on the significant revenue tied to government credits to buy electric cars.
3M was the worst Dow performer, down 3.3%. The Post-It note maker reported strong sales in the first quarter of 2021, as well as a double-digit increase in earnings per share, but left its full-year guidance unchanged.
Brent oil was quoted at USD66.11 a barrel at the equities close, up sharply from USD65.50 at the close Monday, ahead of Wednesday's key output meeting of OPEC and other major crude producers.
Gold was quoted at USD1,780.50 an ounce at the London equities close, marginally higher against USD1,777.60 late Monday.
The economic events calendar on Wednesday has Australia inflation figures overnight, US trade data at 1330 BST and the Federal Reserve's interest rate decision at 1900 BST.
The UK corporate calendar on Wednesday has annual results from supermarket chain J Sainsbury. There are also first-quarter results from drugmaker GlaxoSmithKline, high street lender Lloyds Banking Group, ad agency WPP and from London Stock Exchange Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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