(Alliance News) - Stock prices in London were lower early on Monday amid investor trepidation ahead of a week with two major central bank decisions, a US election, and the start of a new lockdown in England on Thursday.
"European markets are pointing to a weaker start in a flight to safety as Covid cases surge, lockdowns tighten, and as investors brace themselves for what is expected to be a volatile week ahead with the US elections, BoE, FOMC and non-farm payrolls," Gain Capital's Fiona Cincotta said.
In London, the FTSE 100 index was up 1.84 points at 5,579.11, helped by a weaker pound. The more UK domestic-oriented FTSE 250 lost 141.93 points, or 0.8%, at 17,072.45. The AIM All-Share was 0.3% lower at 945.84 points.
The Cboe UK 100 was down 0.1% at 554.98. The Cboe 250 shed 1.2% at 14,348.33. The Cboe Small Companies was down 0.3% at 9,439.86.
The CAC 40 in Paris lost 0.2% and Frankfurt's DAX 30 inched up 0.1%.
The pound was quoted at USD1.2890 early Monday, down from USD1.2952 at the London equities close Friday.
On the London Stock Exchange, Primark-owner Associated British Foods and Ladbrokes Coral operator GVC Holdings were among those forecasting how the latest UK lockdown will hit business. Online grocer Ocado upped its annual earnings guidance, and insurer Hiscox posted a rise in gross written premiums, keeping its prediction for Covid-19 related claims steady.
AB Foods predicted a GBP375 million hit due to closures of its estate in the UK and beyond. The stock was down 2.7% in early dealings.
"As of today, all Primark stores in the Republic of Ireland, France, Belgium, Wales, Catalonia in Spain and Slovenia are temporarily closed, which represent 19% of our total retail selling space," AB Foods said.
With England braced for restrictions starting from Thursday, AB Foods added that 57% of its total selling space will be shuttered from November 5.
"Our estimated loss of sales for these stores, including the stores in England, for the announced periods of closure is GBP375 million. Trading hours are also restricted in a number of other markets. Uncertainty about further temporary store closures in the short-term remains," the company added.
The short update on Monday comes just a day before the company's annual results on Tuesday.
Elsewhere in the UK non-essential retail sector, Next was down 2.6% and JD Sports down 5.7%.
High street betting shop operator GVC lost 2.1% early Monday. It said expects a GBP43 million hit to group earnings before interest, tax, depreciation and amortisation.
"Further restrictions have now been imposed in England, in addition to those already in place across our wider UK Retail and European Retail operations," GVC said.
The estimated earnings before interest, tax, depreciation and amortisation impact if all retail outlets were required to be closed for a whole month would be GBP43 million, GBP34 million down to its UK retail unit and GBP9 million from its European arm.
Crucially for GVC, football fixtures in England are set to continue, despite the new restrictions.
Faring much better, Ocado raised Ebitda guidance, as its Marks & Spencer Group joint-venture grows in strength. Shares in the company rose 7.8%, the best performing FTSE 100 stock.
The online retailer expects annual Ebitda to be over GBP60 million, up from its previous forecast of GBP40 million.
"Trading at Ocado Retail Ltd, a joint venture between Ocado Group and Marks & Spencer Group, has remained strong through the fourth quarter of the current financial year. Ocado continues to see high demand as consumers migrate to online grocery in record numbers. Sales are in line with the trends reported in the third quarter although growth rates reflect the seasonality of the quarter," Ocado said.
The company also unveiled USD287 million worth of acquisitions. It reported the proposed acquisitions of Kindred Systems, a piece-picking robotics company, for USD262 million, and Haddington Dynamics, a robotic-arm designer and manufacturer for USD25 million.
Elsewhere among the blue-chips, British Airways owner International Consolidated Airlines Group lost 3.5% following the announcement of the new lockdown measures in the UK, which prevent overnight stays in the UK and abroad. Mid-cap airline easyJet was down 5.9%, and Ryanair lost 1.6%, in the wake of reporting a swing to an interim loss.
Revenue came in at EUR1.18 billion in the six months ended September 30, down 78% from EUR5.39 billion and the airline swung to a pretax loss of EUR432.3 million from a EUR1.26 billion profit.
Customer numbers were 80% lower at 17.1 million, demonstrating the hit Ryanair has taken from Covid-19 travel restrictions.
"The group expects to carry approximately 38 million passengers in financial 2021, although this guidance could be further revised downwards if EU governments continue to mismanage air travel and impose more uncoordinated travel restrictions or lock downs this winter. The group expects to record higher losses in H2 than in H1," Ryanair said, looking ahead.
Hiscox rose 2.7%. The insurer said its retail business has benefited from a shift to digital.
Group gross written premiums are 2% higher after the nine months to September 30 at USD3.26 billion from USD3.21 billion a year earlier.
"We are benefiting from the inexorable shift towards digital in our Retail businesses thanks to our on-going investment in technology, as well as the strongest pricing we have seen in the London Market and in reinsurance for more than five years," Chief Executive Officer Bronek Masojada said.
Hiscox said there was no change to its Covid-19 claims and potential exposure estimate, which is USD387 million net of reinsurance.
"This includes USD232 million reserved in the first half, including USD150 million for event cancellation and abandonment, with the balance across a variety of other lines. It also includes USD130 million for COVID-19 claims arising from business interruption across all divisions, with the majority coming from Hiscox UK, and USD25 million for event cancellation and abandonment, on the basis that current restrictions on travel and mass gatherings continue until the end of the year," Hiscox added.
Looking to 2021 however, Hiscox forecast it could face somewhere between an additional USD30 million and USD40 million in potential exposure related to events being cancelled due to the virus.
Against the dollar, the euro slipped to USD1.1634 early Monday from USD1.1649 at the European equities close Friday. Versus the Japanese yen, the dollar rose to JPY104.84 compared USD104.56.
In Asia, Japan's Nikkei 225 closed 1.4% higher on Monday. In China, the Shanghai Composite closed marginally higher and the Hang Seng index in Hong Kong ended up 1.5%.
Brent oil prices continued to hit by Covid-19 lockdowns. A barrel of the North Sea benchmark fetched USD36.54 early Monday, down from USD37.68 a barrel at the London market close Friday.
Gold was quoted at USD1,883.96, up from USD1,879.42.
Still to come in the economic calendar for Monday, there are manufacturing purchasing managers' index readings from Germany, the eurozone, the UK and the US at 0855 GMT, 0900 GMT, 0930 GMT and 1445 GMT respectively.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
