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(Alliance News) - It was a slow start to the week in London as investors digested mixed economic data from China and airline stocks reacted to tighter UK travel rules.
The FTSE 100 index was down 3.98 points, or 0.1%, at 6,731.73 early Monday. The mid-cap FTSE 250 index was up 38.73 points, or 0.2%, at 20,654.32 and the AIM All-Share index was down 0.1% at 1,172.48.
The Cboe UK 100 index was slightly lower at 669.85. The Cboe 250 was 0.2% higher at 17,903.45, and the Cboe Small Companies flat at 12,288.74.
In mainland Europe, the CAC 40 in Paris was down 0.4% while the DAX 30 in Frankfurt was 0.3% lower early Monday.
Stocks in Europe started the week on the back foot after mixed growth data out of China overnight.
Figures showed China's economy grew at the slowest pace in more than four decades last year despite a rebound after the country's coronavirus outbreak. The 2.3% expansion is the lowest figure since the Chinese economy embarked on major reforms in the 1970s. The figure was a marked slowdown from 2019 growth of 6.1% – itself already the lowest in decades – with the country hit by weak domestic demand and trade tensions.
However, it was better than that forecast by an AFP poll of analysts from 13 financial institutions, who predicted a 2.0% expansion.
Naeem Aslam, chief market analyst at AvaTrade, commented: "What is more important for investors and traders is the fact that consumers in China remained very much reluctant in spending. And this represents a real threat not only for China but also for the global economy as China is the second-biggest economy in the world. The evidence of the reluctance among consumers can be seen by looking at the retail sales number."
According to the latest data, industrial production grew 2.8% on-year for 2020, slowing further from previous years. Retail sales, whose recovery has lagged behind that of industrial activity, shrank 3.9% for the full year with consumers wary of spending as the coronavirus pandemic lingered.
In China, the Shanghai Composite closed up 0.8% on Monday, while the Hang Seng index in Hong Kong was up 1.0%.
The Japanese Nikkei 225 index closed down 1.0%. Against the yen, the dollar edged down to JPY103.77 versus JPY103.79.
The S&P/ASX 200 in Sydney closed down 0.8%.
Sterling was quoted at USD1.3536 early Monday, lower than USD1.3597 at the London equities close on Friday. The euro traded at USD1.2070 early Monday, falling from USD1.2098 late Friday.
Safe-haven gold was quoted at USD1,834.20 an ounce amid Monday's caution, higher than USD1,832.20 on Friday. Brent oil was trading at USD54.66 a barrel, soft against USD54.87 late Friday.
Airline shares in London were lower after the UK said it would close all travel corridors from Monday to "protect against the risk of as yet unidentified new strains" of coronavirus.
Prime Minister Boris Johnson told a Downing Street press conference on Friday that anyone flying into the country from overseas will have to show proof of a negative Covid test before setting off. The new policy means arrivals from every destination will need to self-isolate for 10 days, or receive a negative result from a coronavirus test taken at least five days after they enter the UK.
British Airways parent International Consolidated Airlines fell 2.3% in opening dealings, making the stock the worst performer in the FTSE 100 early Monday, while easyJet lost 3.4% in the FTSE 250.
Towards the top of the FTSE 100 was Land Securities, rising 1.6% after Bank of America raised the stock to Buy from Neutral.
In the FTSE 250, Dixons Carphone rose 4.4% after RBC raised the electronics and mobile phones retailer to Outperform from Sector Perform.
Genus said strong recent trading has continued, and it expects to beat previous profit estimates - helping shares advance 3.2% in early trade.
The animal genetics company said adjusted pretax profit is now expected to be within a range of GBP47.0 million and GBP49.0 million for its first half, being the six months to December 31, which would be up on GBP36.6 million a year ago. Revenue for the period is expected to come in between GBP285.0 million and GBP287.0 million, also up from GBP270.7 million year-on-year.
"High growth in volumes, revenue and adjusted operating profit were achieved across the groups' operations by both PIC and ABS. Business trends are consistent with those previously announced at the time of the [November] AGM, including further strong growth achieved in particular by PIC in China and by ABS in Brazil, Russia, India and China," said Genus.
PIC focuses on pork and ABS on beef and dairy.
Based on the strong first-half performance, Genus anticipates beating its previous profit growth expectations for the financial year ending June 30, though growth in the second half is likely to be lower than that seen in the first six months of the year.
Elsewhere in London, Devro rose 3.6% as it also lifted guidance. Devro said trading in the final months of 2020 was better than expected, and it now expects to deliver a full-year profit at the upper end of market forecasts.
The maker of collagen products for the food industry said the trading was driven by higher volumes and margins, and noted that company-compiled consensus for operating profit ranges between GBP38.0 million and GBP40.5 million.
By Lucy Heming; lucyheming@alliancenews.com
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