(Correcting the performance of global stock indices in 2020.)
(Alliance News) - The FTSE 100 index edged down in Thursday's shortened New Year's Eve session, ending a dramatic year during which London's key stock measure failed to keep up with global peers.
The pound was quoted at USD1.3656 at the London equities close Thursday, up compared to USD1.3593 at the close on Wednesday and up 3.1% since the start of 2020. However, the pound is still around 20% weaker since the 2016 Brexit vote.
The FTSE 100 closed down 95.30 points, or 1.5%, at 6,460.52, ending the week 0.5% lower. For the year, the blue-chip index lost 15%, its worst annual performance since 2008.
The mid-cap FTSE 250 ended down 226.81 points, or 1.1%, at 20,488.30, losing 0.3% since the start of the week. The AIM All-Share closed up 3.78 points, or 0.3%, at 1,157.04, marking a 2.4% surge since the week began.
For the year, the mid-cap index was down 7.3%, while the AIM All-share gained 20%.
The Cboe UK 100 ended down 1.3% at 644.25, the Cboe UK 250 closed down 1.1% at 17,976.58, and the Cboe Small Companies ended down 0.3% at 11,715.99.
"The FTSE 100 looks set to close out the year on the back foot, with the value and cyclical nature of the UK markets ensuring significant underperformance compared with their US counterparts," said IG Senior Market analyst Joshua Mahony.
By contrast, the US's S&P 500 index climbed almost 70% from its 2020 nadir, adding 15% for the year as a whole. The Nikkei 225 in Japan added 66% since its March low and rose 18% during all of 2020. The German DAX added just 2.5% in 2020, but recovered 63% from depths of the March lockdown period. By contrast, the FTSE 100 improved only 29% from its worst level on March 23.
Travel and housing sectors were at the forefront of losses in London, the IG analyst noted, with the extended period of economic restrictions due to the Covid-19 pandemic adding to uncertainty over how the UK economy will fare after its exit from the EU.
"The government's Brexit deal does allay many of the fears over a potential breakdown at the border, yet questions remain over how hard the services sector will suffer from a deal which pays little attention to an area which makes up a whopping 80% of the UK economy," added Mahony.
UK Prime Minister Boris Johnson said the UK's destiny "now resides firmly in our hands" as his EU trade deal, reach on Christmas Eve, cleared Parliament and entered into law. The EU (Future Relationship) Act received the backing of the Commons and Lords, as the government rushed approval through both Houses in a single day.
The legislation was granted royal assent at 12.25am on Thursday morning, becoming law.
The act paves the way for the deal to take effect at 11pm London time on Thursday when the current Brexit transition period – during which the UK has continued to follow EU rules – ends.
In European equities on Thursday, the CAC 40 in Paris was down 0.1% in late trade. French financial markets will close just after 2pm local time. Markets in Germany were shut entirely on Thursday, as they were in Japan and Italy.
The euro stood at USD1.2273 at the London equities close Thursday, soft against USD1.2287 at the normal LSE closing time on Wednesday. Against the yen, the dollar was trading at JPY103.06, soft versus JPY103.30 late Wednesday.
AstraZeneca closed down 0.7% Thursday, with the stock ending down 4.0% for the year as a whole.
The coronavirus vaccine developed by AstraZeneca and Oxford University, which was approved Wednesday in Britain, is unlikely to get a green light in the EU in the next month, according to the European Medicines Agency statement on Thursday.
The regulator, charged with overseeing vaccines' authorisation in the EU before they can be marketed, approved the Pfizer Inc-BioNTech vaccine on December 21.
It is expected to rule on Moderna's vaccine on January 6. But an EU ruling on the AstraZeneca-Oxford jab will take more time.
Elsewhere on the LSE, Countrywide shares closed up 13%. For the year, its shares are up by a third.
On Thursday, the company said it has agreed to a raised takeover offer from peer Connells.
Countrywide shareholders will receive 395 pence in cash for each share. The new agreed price is up from 325p offered at the start of December, with that offer itself representing a 30% increase from an earlier offer from Connells. The price represents a 172% premium over Countryside's unaffected price.
Connells said it has received written confirmations of support for the acquisition from Countrywide shareholders in respect of 16.8 million shares, representing 51% of Countrywide's equity.
The acquisition will be implemented by way of a court-sanctioned scheme of arrangement between Countrywide and Countrywide shareholders and is expected to complete in the first quarter of 2021.
"Following a thorough evaluation of options and extensive consultation with the company's major shareholders, we have been encouraged by their recognition of the need to put in place a sustainable capital structure and a willingness to support the company, which is a great business that has been constrained by too much debt," said Countrywide Acting Non-Executive Chair David Watson.
Taking a closer look at the London-listed companies' performance, information technology provider BATM Advanced Communications was the best performer on the London Main Market in 2020, as its stock almost tripled, while exhibitions & conferences firm Hyve Group suffered the most, with its shares tumbling by 61% in 2020.
BATM shares have been in favour since the start of the pandemic. In March it announced a collaboration with Novamed to develop a Covid-19 home testing kit. The antibody test was launched in May. BATM reported record revenue for the first half of 2020.
Hyve Group, by contrast, lost the most ground in 2020 during the three months prior to the first national lockdown began in March. The shares took a hit amid the dispute between the company and its shareholders regarding board composition. Some shareholders felt that some directors were on the boards of too many companies, meaning that they did not have the time to fully carry out their duties at the company.
As the year progressed, the company was hurt by the coronavirus outbreak, with annual profit hit by event cancellations and travel restrictions.
Among large caps, Ocado Group, Fresnillo, Flutter Entertainment and Antofagasta were the biggest gainers, up 81%, 76%, 61% and 54%, respectively, for 2020.
Stocks in New York were slightly lower Thursday, with the Dow Jones, S&P 500 and Nasdaq Composite down 0.1% to 0.2% in morning trade. Equity markets in the US will be open for the full day on Thursday, but the bond market will close early at 1400 New York time or 1900 London time.
Brent oil was quoted at USD51.10 a barrel at the London equities close Thursday, slightly lower from USD51.30 late Wednesday. Gold was quoted at US1,894.00 an ounce, higher against USD1,885.33 at the close on Wednesday.
There are no events scheduled in the UK corporate calendar for next week, though things will pick up later as London-listed retailers such as Next, Wm Morrison Supermarkets and Marks & Spencer report their trading fortunes over the Christmas period.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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