(Alliance News) - Stocks in London ended mostly lower on Tuesday, giving back some of the stellar gains obtained in the wake of positive coronavirus vaccine developments.
Global hopes of vanquishing the coronavirus pandemic were high after US biotech firm Moderna said its vaccine candidate was nearly 95% effective in a trial, a week after similar results announced by pharma giant Pfizer and its German partner BioNTech.
In London, the FTSE 100 index ended down 55.96 points, or 0.9%, at 6,365.33. The FTSE 250 closed down 91.88 points, or 0.5%, at 19,516.17. The AIM All-Share closed up 5.17 points, or 0.5%, at 1,012.28.
The Cboe UK 100 index ended down 1.1% at 633.58. The Cboe 250 closed down 0.3% at 16,896.80. The Cboe Small Companies finished up 1.5% at 11,088.61.
The CAC 40 index in Paris closed up 0.2% and Frankfurt's DAX 30 finished flat.
"Stock markets are set to finish the session in the red as traders book their profits from yesterday's impressive gains. Dealers haven't forgotten that Moderna's possible vaccine for Covid-19 has an effective rate of 94.5%, but for the time being they are happy to square up their positions. In the space of one week, there have been two very encouraging stories with respect to coronavirus drugs, so there is a growing feeling that the pharma sector is closing in on the virus, but there is always the possibility of setbacks," said CMC Markets analyst David Madden.
On the London Stock Exchange, Intermediate Capital Group ended the best blue-chip performer, up 7.9%. The asset management company raised its payout and reported profit growth of nearly a third during a strong first-half.
Assets under management at September 30 were EUR46.10 billion, a 1.8% improvement from EUR45.30 billion at the end of March and a 12% leap year-on-year. Intermediate Capital noted it raised EUR2.6 billion of new money during the period. Pretax profit in the six months to September 30 jumped 29% annually to GBP197.8 million from GBP153.4 million. In the fund management arm alone, pretax profit was 5.6% higher year-on-year at GBP89.8 million from GBP85.0 million.
Intermediate Capital raised its interim payout by 13% to 17.0 pence per share from 15.0p.
Imperial Brands closed 7.3% higher after the tobacco firm reported sharply higher profit in its recently ended financial year, amid higher revenue and a prior year Premium Cigar division impairment.
Revenue in the financial year to September 30 rose 3.1% to GBP32.56 billion, and pretax profit increased 28% to GBP2.17 billion from GBP1.69 billion. The company reported a GBP147 million impairment of goodwill and equity investments in its Premium Cigar division in financial 2019, with no such impairment in financial 2020.
The Premium Cigars business was sold back in October, with proceeds used to reduce debt. Adjusted pretax profit was GBP3.14 billion, down 6.0% from GBP3.34 billion the year before. Net revenue was GBP7.99 billion, down 0.1% at actual currency from an adjusted GBP8.00 billion in financial 2019, but up 0.8% at constant currency.
Imperial's dividend was chopped by a third to 137.7 pence from 206.6p, in line with a rebasing set out in May.
Homeserve closed up 2.4%. The home emergency cover provider said it now sees full-year earnings ahead of prior expectations, following a better-than-expected first half and despite posting a significant drop in profit.
For the six months ended September 30, Homeserve reported pretax profit of GBP10.1 million, a 49% drop from GBP19.7 million recorded the year prior. This was despite a 17% year-on-year rise in revenue to GBP536.7 million from GBP457.7 million, as demand for home remodellings surged during the Covid-19 lockdown. Revenue growth was aided as well by growth in Homeserve's North American business and the inclusion of income from recently purchased Home Experts business Elocal.
Homeserve said the fall in profit was due to the absence of exceptional gains recorded in the prior period of GBP7.4 million and higher acquisition-related amortisation of GBP23.0 million compared to GBP16.3 million a year ago. Adjusted pretax profit was up 16% to GBP33.1 million.
An interim dividend of 6.2p was declared, up from 5.8p the year prior.
At the other end of the large caps, Vodafone ended down 3.5%. The telecommunications firm announced the 2021 financial year guidance for its soon-to-be listed Vantage Towers arm.
Vodafone Vantage Towers is a mobile tower owner focused on Europe. London-listed Vodafone expects Vantage Towers to float early in calendar 2021 on the Frankfurt Stock Exchange.
Vodafone said Vantage Towers plans to have a payout ratio of 60% of its recurring cash flow.
"Vantage Towers is well positioned to benefit in each of its markets from the compelling structural growth drivers of increasing data usage, 5G roll-out and coverage obligations. The company is a commercially driven business with a clear strategy to increase tenancies and deliver growth by leveraging its comprehensive capabilities."
The pound was quoted at USD1.3254 at the London equities close, up sharply from USD1.3186 at the close Monday.
On the political front, UK Prime Minister Boris Johnson warned that it is "far from certain" that Britain will manage to get a post-Brexit trade deal with Brussels in time for the end of the year.
The PM briefed the Cabinet - meeting by conference call - on the latest negotiations, telling ministers that time was now "very short".
Talks have been continuing this week in Brussels between the EU's chief negotiator Michel Barnier and his UK counterpart David Frost.
However, with hopes of a breakthrough this week receding, it is unclear whether the two sides will be prepared to carry on talking into next week if there is still no agreement.
The current Brexit transition period ends at the end of the year when Britain will finally leave the single market and the customs union and any deal would have to be ratified by both the UK and European parliaments before then.
In London, officials sought to downplay reports that Frost had advised Johnson that he could expect to get a deal early next week. The PM told the Cabinet that while he remained "keen" to get an agreement he would not compromise on the UK's "core principles".
The euro stood at USD1.1866 at the European equities close, up from USD1.1840 late Monday. Against the yen, the dollar was trading at JPY104.22, down from JPY104.57 late Monday.
Stocks in New York were lower at the London equities close, retreating from fresh record highs reached on Monday amid disappointing US retail sales figures.
The DJIA was down 0.7%, the S&P 500 index down 0.4% and the Nasdaq Composite down 0.1%.
The recent rally has been propelled by optimism over coronavirus vaccines that has eased worries about skyrocketing Covid-19 cases which are leading to new restrictions on economic activity.
US retail sales grew marginally in October, figures from the Census Bureau showed, bu missed market forecasts.
US retail and food service sales edged up just 0.3% month-on-month in October to reach USD553.3 billion, representing a slower rate of growth than the 1.6% recorded for September. Market consensus, according to FXStreet, had pencilled in 0.5% month-on-month rise for October.
Elsewhere, Tesla rose 7.2% after S&P Dow Jones Indices said the electric car company had officially qualified to join the prestigious S&P 500.
Brent oil was quoted at USD43.40 a barrel at the London close, sharply lower from USD44.40 at the close Monday.
Gold was quoted at USD1,887.43 an ounce at the London equities close, lower against USD1,889.70 late Monday.
The economic events calendar on Wednesday has UK and eurozone inflation readings at 0700 BST and 1000 GMT respectively.
The UK corporate calendar on Wednesday has interim results from energy company SSE and property company British Land.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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