Natwest Share News (NWG)

(Alliance News) - Friday marked an upbeat end to a mixed week, with the internationally-exposed FTSE 100 closing the session in positive territory even as the pound surged above the USD1.40 mark for the first time since April 2018.

The FTSE 100 index closed up 6.87 points, or 0.1%, at 6,624.02 - finishing 0.5% higher since the week began.

The more domestically-focused FTSE 250 ended up 102.09 points, or 0.5%, at 21,035.96, closing flat for the week. The AIM All-Share closed up 8.30 points, or 0.7%, at 1,214.18 - down 0.5% for the week.

The Cboe UK 100 ended up 0.5% at 660.56, the Cboe UK 250 also closed up 0.5%, at 18,599.64, and the Cboe Small Companies ended 0.2% higher at 12,798.74.

In European equities on Friday, the CAC 40 in Paris and the DAX 30 in Frankfurt both ended up 0.8%.

"Yesterday's struggles appear to be a distant memory once again, as European markets make solid gains while on Wall Street a more muted, but still cautiously bullish, atmosphere prevails. Overall it looks like a day of gains for cyclical stocks, including energy, banks and raw materials, with safer sectors like utilities left out of the general move higher," said Chris Beauchamp, chief market analyst at IG.

Beauchamp noted news that Pfizer's Covid-19 vaccine can be stored at higher temperatures than previously thought.

Pfizer and BioNTech said Friday their Covid-19 vaccine can be stored in temperatures between minus 15 degrees Celsius and minus 25 degrees Celsius, compared to current guidelines to store them in an ultra-low temperature freezer.

"The data have been submitted to the US Food & Drug Administration to support a proposed update to the US emergency use authorisation prescribing information, which would allow for vaccine vials to be stored at these temperatures for a total of two weeks as an alternative or complement to storage in an ultra-low temperature freezer," the two pharma firms said.

Currently, the labels for the Pfizer and BioNTech's Covid-19 vaccine, including the EUA label in the US, state that the vaccine must be stored in an ultra-cold freezer at temperatures between minus 80 degrees Celsius and minus 60 degrees Celsius.

IG's Beauchamp said the Pfizer news has "bolstered the hope of a continued return to normality", given this will make it easier to store and distribute the vaccine.

Also lifting the mood at the end of the week were an encouraging set of global PMIs.

The IHS Markit/CIPS UK services purchasing managers' index jumped to 49.7 points in February, up from 39.5 in January, but under the 50.0 mark which separates expansion from contraction. Still, the latest reading was well above market expectations, cited by FXStreet, of 41.0 points and was the highest in four months.

The UK manufacturing PMI increased to 54.9 points in February, up slightly from 54.1 in January, beating market forecasts of 53.2. The UK composite PMI score rose to 49.8 points in February, up sharply from 41.2 in January and well above market consensus of 42.2.

The PMI data, as well as a dollar on the back foot amid Friday's brighter mood, helped the pound climb above the USD1.40 mark for the first time since April 2018.

The pound - shrugging off some weaker-than-expected UK retail sales data on Friday, with sales falling 5.9% on an annual basis in January versus market forecasts for just a 1.3% drop - was quoted at USD1.4020 at the London equities close Friday, compared to USD1.3955 at the close on Thursday.

The euro stood at USD1.2139 at the European equities close Friday, up against USD1.2076 at the same time on Thursday.

There was also improvement in economic conditions in the eurozone. The composite PMI climbed to a two-month high of 48.1 points in February. Though still below the 50.0 no-change mark, it topped January's 47.8 tally, suggesting the eurozone's private sector decline is easing.

In February, the eurozone's manufacturing sector had its best showing in three years. The manufacturing flash PMI rose to 57.7 in February, a 36-month high, from 54.8 in January. This was driven by Germany, which posted a staggering 60.6 points for February, from 57.1 points in January.

In the US, meanwhile, economic activity hit a near six-year high. The composite PMI rose to 58.8 in February, up just slightly from 58.7 the month before but marking the sharpest upturn since March 2015.

Service sector growth hit the fastest since March 2015, with firms often reporting higher activity as virus restrictions were partially eased. The services business activity index rose to 58.9 in February from 58.3 in January. While growth in the manufacturing sector moderated in February, things were still looking robust with a manufacturing PMI of 58.5 from 59.2 in January.

Stocks in New York were higher at the London equities close, with the DJIA up 0.4%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.9%.

In London, stocks set to poise from a post-pandemic recovery were amongst the top performers on Friday. Jet engine maker Rolls-Royce rose 5.7% while British Airways parent International Consolidated Airlines advanced 5.1%. Cruise company Carnival rose 6.4% in the FTSE 250, while shares in cinema operator Cineworld increased 4.2%.

Antofagasta surged 7.2%, the miner tracking spot copper prices. Copper was trading at USD8,891.09 a tonne on Friday afternoon, up sharply from USD8,413.50 late Thursday on hopes of a global economic recovery.

Other commodities struggled on Friday. Brent oil was hit by profit-taking, quoted at USD63.47 a barrel at the London equities close Friday from USD64.49 late Thursday.

Both gold and the Japanese yen benefited from a weaker dollar. Safe haven gold was quoted at USD1,786.45 an ounce at the London equities close Friday, up against USD1,776.28 at the close on Thursday. Against the yen, the dollar was trading at JPY105.53 compared to JPY105.72 late Thursday.

Back on the London Stock Exchange, NatWest shares jumped 5.2% as it reinstated its dividend.

For 2020, the state-backed lender posted a pretax operating loss of GBP351 million, tumbling from a profit of GBP4.23 billion in 2019. The lender's attributable loss was GBP753 million compared to 2019's GBP3.13 billion profit. Market consensus predicted an operating pretax loss of GBP418 million, with a forecast attributable loss of GBP730 million.

For 2020, the bank posted impairment losses amounting to GBP3.24 billion, up sharply from GBP696 million in 2019, but lower than market consensus of GBP3.59 billion.

NatWest declared a 3 pence per share dividend for 2020. UK lenders had cancelled final payouts for 2019 under orders from the Bank of England amid the Covid-19 pandemic. On Thursday, peer Barclays declared a 1p dividend, together with a GBP700 million share buyback.

NatWest added that it will "begin a phased withdrawal" from the Republic of Ireland, a "multi-year process", while remaining in Northern Ireland.

In the UK corporate calendar for Monday, there is a trading statement from Primark clothing chain owner Associated British Foods. Later in the week come results from lenders HSBC and Lloyds, IAG, and Nurofen pan killer maker Reckitt Benckiser.

The economic calendar on Monday has the German Ifo business climate monitor, while markets in Japan will be closed for the Emperor's Birthday holiday. UK Prime Minister Boris Johnson will also be setting out a "roadmap" for relaxing lockdown measures on Monday.

By Lucy Heming; lucyheming@alliancenews.com

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