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(Alliance News) - Stock prices continued to slide at midday in London on Monday following last week's strong gains, as investors look ahead to an announcement by the UK government over virus restrictions.
The FTSE 100 index was down 45.39 points, or 0.6%, at 7,090.16. The mid-cap FTSE 250 index was down 66.62 points, or 0.3%, at 22,579.39. The AIM All-Share index was flat at 1,249.43.
The Cboe UK 100 index was down 0.7% at 705.80 points. The Cboe 250 was down 0.3% at 20,250.73, and the Cboe Small Companies down 0.2% at 15,355.10.
In Paris, the CAC 40 was down 0.5%, while Frankfurt's DAX 30 was down 0.2%.
US index futures were pointed mostly lower, after the S&P 500 and Nasdaq Composite set record highs last week, as market participants look ahead to the US job report for June on Friday.
The Dow Jones Industrial Average was called down 0.2% and the S&P 500 down 0.1%, but the Nasdaq Composite up 0.3%.
Analysts at ActivTrades said: "Most benchmarks are still trading sideways, albeit still near record highs, as investors remain hesitant to drive prices higher amid lingering uncertainty about inflation and the next policy moves by the Fed and other central banks.
"Even if some traders doubt the 'transitory' effect of inflation, expecting prices to keep on rising over time, the fact central banks keep on providing considerable support to markets remains a solid bullish market driver and justifies the 'risk-on' approach. However, many already have their eyes towards upcoming macro data, with this week’s US jobs report due on Friday while the earning season looms around the corner."
In the FTSE 100, AstraZeneca was the best performer, up 1.1%, after the Anglo-Swedish drugmaker said its Forxiga drug has been approved in the EU for the treatment of chronic kidney disease.
Last month, the drug was approved in the US under the name Farxiga, and it is currently under review in other countries, including Japan, the Cambridge, England-based company said.
The EU's decision was based on phase 3 trial results which showed Forxiga reduced the risk of death and had a strong safety and tolerability profile.
Peer GlaxoSmithKline was up 0.2%. Glaxo has hired two investment banks to advise on plans to list its consumer unit next year and defend against the influence of activist investor, Elliott Investment Management, Bloomberg reported late Friday.
Bloomberg said that the pharmaceutical firm has hired Goldman Sachs and Citigroup to assist with its planned spinoff.
On Wednesday last week, GlaxoSmithKline confirmed plans to separate its Consumer Healthcare arm, which includes products such as Aquafresh toothpaste and Nicorette gum. Glaxo said it aims to list the division on the London Stock Exchange by mid-2022, but will continue to hold up to 20% of the business to sell at a later time.
The separation and an accompanying 30% dividend reduction are designed to enhance GSK's focus on its drugs for cancer, HIV and other diseases.
At the other end of the large-caps, Burberry was the worst performer, down 7.5%. The UK fashion house said Marco Gobbetti will step down as CEO and leave the company at the end of 2021, as Italian fashion firm Salvatore Ferragamo said it has hired Gobbetti as CEO and general manager.
Burberry explained that Gobbetti - who it said has led a transformation of the British luxury brand and business - will be stepping down to take up "another opportunity that will enable him to return to Italy and be closer to his family".
Ferragamo said Gobbetti will take up his position as soon as he is released from his contractual obligations at Burberry. It noted that he is "an Italian manager with a long and relevant professional career in the luxury and fashion sector".
Gobbetti was appointed as CEO of Burberry in 2016 and, alongside Chief Creative Officer Riccardo Tisci, was tasked with turning the business around after investors lost confidence in previous CEO Christopher Bailey. Gobbetti took over from Bailey in November 2017.
The UK luxury retailer, famed for its trench coats, will now begin the search for a successor.
Ferragamo shares were down 1.6% in Milan. The company sells high-end shoes, leather goods, apparel, silk products and other accessories, along with women's and men's fragrances.
St James's Place and M&G were down 1.9% and 1.1%, respectively, after HSBC downgraded the investment managers to Hold from Buy.
In the FTSE 250, HgCapital Trust was the best performer, up 3.4%. The trust noted that its manager, technology-focused private equity firm Hg, has agreed to sell its investment in Allocate to patient safety services provider RLDatix.
Allocate is a workforce management software-as-a-service provider, mainly used by healthcare and government organisations. Hg first acquired in Allocate at the end of 2014 for GBP109.6 million, taking it private from its listing on the London Stock Exchange.
The financial details of the sale to RLDatix were not disclosed, however HgCapital Trust said it values its own investment in Allocate at GBP53.5 million.
Dr Martens was up 2.4%, after HSBC upgraded the boot maker to Buy from Hold.
At the other end of the midcaps, Ultra Electronics was down 4.4%. The defence contractor late Friday said it has terminated talks regarding a possible combination with Cobham Ltd.
Earlier on Friday, former FTSE 250 member Cobham, which is controlled by Advent International Corp, said it is mulling a potential takeover offer for Ultra, with a view to create a "global defence electronics champion".
The London-based firm confirmed that it was at the very early stages of exploratory discussions around a possible combination of some or all of its Intelligence & Communications Strategic business unit and entities within Cobham's CAES group.
These discussions have now been terminated by Ultra, the company said in its statement Friday.
The pound was quoted at USD1.3906 at midday on Monday, down from USD1.3910 at the London equities close Friday, easing from an intraday high of USD1.3940 in early trade, amid hopes that the target date for full economic reopening in England remains on track.
UK Health Secretary Sajid Javid on Monday is expected to make his first Commons statement since rejoining the Cabinet as lockdown-sceptic MPs hope he breaks from the approach of his predecessor and pushes for a swift lifting of restrictions.
The former UK chancellor of the exchequer, who assumed the role following Matt Hancock's resignation over the weekend, said on Sunday that his "most immediate priority" would be "to see that we can return to normal as soon and as quickly as possible".
Hancock became unpopular with some Tory MPs who believed that he was an obstacle to the easing of coronavirus restrictions.
Aside from prime minister, Javid has now held the three largest positions within the UK cabinet of chancellor, home secretary and health secretary.
"The pound reacted positively following his appointment and given some of his previous comments, Sajid Javid could be more comfortable easing Covid restrictions than his predecessor," said analysts at OFX.
The euro was priced at USD1.1935, down from USD1.1945. Against the yen, the dollar was trading at JPY110.63, down from JPY110.75.
Brent oil was quoted at USD76.04 a barrel Monday at midday, up from USD75.81 late Friday. Gold stood at USD1,777.38 an ounce, slightly lower from USD1,781.20.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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