Marshalls Share News (MSLH)

(Alliance News) - The mood in Europe was cautious ahead of the European Central Bank's latest decision on Thursday, with the FTSE 100 the laggard of the bunch as it was weighed down by its banking stocks.

The FTSE 100 index was down 21.96 points, or 0.3%, at 6,703.64 early Thursday. The mid-cap FTSE 250 index was up 77.75 points, or 0.4%, at 21,484.42. The AIM All-Share index was up 1.1% at 1,195.74.

The Cboe UK 100 index was down 0.4% at 667.41. The Cboe 250 was up 0.4% at 19,116.06, and the Cboe Small Companies up 0.3% at 13,761.05.

In mainland Europe, the CAC 40 in Paris was up 0.1% while the DAX 30 in Frankfurt slipped 0.1% on Thursday.

"It's a windy morning in London but a calmer morning in markets. For that, we have the US CPI data to thank," said Kit Juckes at Societe Generale.

The annual inflation rate for February was 1.7%, according to the US Bureau of Labor Statistics on Wednesday, accelerating from 1.4% the month before but exactly in line with market forecasts. Excluding food and energy, however, inflation softened to 1.3% year-on-year, having been expected to remain steady on the 1.4% reported for January

"The softer CPI data helped calm the US bond market and yields have settled into a range. That allows the markets to switch their focus somewhat, and what they see is an improving, albeit uneven, global economic outlook," said Juckes. "Unprecented monetary and fiscal easing is working its magic and vaccines are beginning to work theirs in a small number of places so far but hopefully, in far more before long."

US President Joe Biden is preparing to sign his bumper USD1.9 trillion stimulus package into law on Friday after it cleared Congress.

The American Rescue Plan passed the House of Representatives in a 220-211 vote, with zero support from Republicans, who accuse Biden of abandoning his Inauguration Day pledge to unify a divided nation.

The mammoth package dishes out USD1,400 to most Americans, helps the unemployed, expands public healthcare and ramps up funds for Covid-19 vaccinations. It also extends eviction and foreclosure moratoriums, pours billions of dollars into state and local governments, assists hard-hit small businesses and provides USD130 billion in extra aid for schools.

The stimulus plan's passage through Congress lifted sentiment, with Wall Street ending Wednesday mostly higher and on track for further gains on Thursday. The Dow Jones was called up 0.3%, the S&P 500 up 0.8% and the tech-heavy Nasdaq Composite up 1.9%.

However, the FTSE 100 was failing to move higher.

"European bourses are on the front foot, except for the FTSE, which once again lags its peers. The heavyweight banking sector is under pressure as falling yields act as a drag, overshadowing the miners, who are tracing commodity prices higher. A cautious tone is dominating as attention turns to the ECB," said Sophie Griffiths, market analyst at Oanda.

The banking fallers in London were led by HSBC Holdings as the stock went ex-dividend, meaning new buyers no longer qualify for the latest payout. Shares were down 5.0% at midday.

Standard Chartered was 3.0% lower and Barclays down 1.7%.

Miners were in the green, with Anglo American up 2.1%, Rio Tinto up 1.9% and Antofagasta up 1.2%.

Elsewhere in London, mid-cap stock Marshalls rallied 8.2% on a strong start to 2021.

The FTSE 250-listed hard landscaping products company reported a decline in 2020 revenue to GBP469.5 million from GBP541.8 million a year earlier, with pretax profit plummeting to GBP4.7 million from GBP69.9 million in 2019.

However, Marshalls said trading has started strongly in 2021, with sales at the end of February up 7% and orders up 12% compared to the same period in 2020.

Spirent Communications shares jumped 7.6% as it reported growth in 2020 and a special payout.

Spirent's 2020 order intake was USD539.4 million, up 1% from USD532.0 million in 2019, and revenue for the year was USD522.4 million, up 4% from USD503.6 million. The company's 2020 reported pretax profit was USD95.8 million, an increase of 7% from USD89.6 million in 2019.

Spirent declared a total 2020 dividend of 6.04 US cents per share, which was up 12% from 5.39 US cents in 2019. As a result of its revenue and profit growth, it intends to pay a special dividend of 7.50 US cents.

Helios Towers slid 7.1% despite posting revenue growth and a narrowed loss after the market close on Wednesday.

For 2020, revenue was USD414.0 million, up 7.0% from USD387.8 million in 2019, while the company posted a 2020 pretax loss of USD20.9 million, narrowed from USD74.8 million in 2019.

Looking ahead, the company said 2021 is shaping up be "another exciting year of growth" as it looks to close its Senegal acquisition and expanding operations in the country, as well as continuing to progress inorganic growth strategy in new and existing markets. It is targeting USD110 million to USD140 million of capital expenditure for its existing markets in 2021.

Helios early Thursday priced it USD250 million convertible bond offering. They will be issued at 100% of their principal amount, with a 2.875% coupon.

In focus this afternoon is the European Central Bank's latest interest rate decision.

The ECB Governing Council announces its latest policy decision at 1245 GMT on Thursday. This will be followed by a press conference with President Christine Lagarde at 1330 GMT.

The euro traded at USD1.1963 at midday, up from USD1.1900 late Wednesday ahead of the decision.

"The euro appears to have regained its mojo, rising for a third straight session and targeting USD1.20 ahead of the ECB monetary policy announcement," said Oanda's Griffiths.

No policy change is expected this month, but markets will be looking out for comments from Lagarde over rising bond yields and inflation expectations.

Elsewhere in Thursday's economic calendar are US initial jobless claims at 1330 GMT.

The dollar was weak after Wednesday's disappointing inflation data.

Sterling was quoted at USD1.3961 midday Thursday, higher than USD1.3902 late Wednesday. The dollar nudged down to JPY108.47 in London from JPY108.65 at the London equities close on Wednesday.

Gold was quoted at USD1,732.84 an ounce early Thursday, higher than USD1,719.15 on Wednesday due to a weaker dollar. Brent oil was trading at USD68.52 a barrel, up from USD67.85 late Wednesday.

By Lucy Heming; lucyheming@alliancenews.com

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