(Alliance News) - After a stellar start to the week but caution in Asia overnight, the FTSE 100 was flat in opening dealings on Tuesday.
The internationally exposed FTSE 100 was cushioned as the pound softened versus the dollar, while Taylor Wimpey and Ashtead bookended the blue-chip index.
The FTSE 100 index was up just 1.35 points at 6,589.88 early Tuesday. The mid-cap FTSE 250 index was up 62.67 points, or 0.3%, at 21,284.13. The AIM All-Share index was down 0.4% at 1,187.94.
The Cboe UK 100 index was up 0.1% at 656.17. The Cboe 250 was up 0.1% at 18,861.44, and the Cboe Small Companies also up 0.1%, at 13,285.59.
In mainland Europe, the CAC 40 in Paris was slightly lower while the DAX 30 in Frankfurt was down 0.1% early Tuesday.
"Despite central bank assurances and a positive lead in vibe from US equities, markets are finding it difficult to shake the bond market heebie-jeebies suggesting investors believe last week's move likely has more substance behind it than just a flash crash on a go-slow," said Axi's Stephen Innes.
"Still, with bond markets rowing back into calmer waters propped by the J&J one-shot vaccine green light at the end of the reopening tunnel, dips should continue to be bought. But as opposed to yesterday's 'risk-on' sprint, it feels like we've dropped to a marathon pace."
Caution pervaded the Asian session on Tuesday.
The Nikkei 225 index in Tokyo closed down 0.9%. The Shanghai Composite closed down 1.2%, while the Hang Seng index in Hong Kong ended down 1.2%. The S&P/ASX 200 in Sydney closed down 0.4%.
Meanwhile, the dollar gained ground against major counterparts Tuesday as the mood became tepid.
Sterling was quoted at USD1.3884 early Tuesday, lower than USD1.3953 at the London equities close on Monday.
The euro eased to USD1.2008 from USD1.2055 late Monday. Against the yen, the dollar was quoted at JPY106.86, up versus JPY106.62.
Safe haven gold also faltered against the stronger greenback. Gold was priced at USD1,719.02 an ounce early Tuesday, lower than USD1,737.01 on Monday.
In London, Taylor Wimpey shares rose 3.4% as the housebuilder noted a good recovery in the second half of a "very challenging" year.
Completions fell 39% to 9,799, primarily due to site shutdowns in the second quarter due to the virus pandemic, with revenue for 2020 falling 36% to GBP2.79 billion. Pretax profit slumped 68% to GBP264.4 million.
"After an unusual and volatile year, our 2020 results are in line with market expectations," said Taylor Wimpey.
The FTSE 100 constituent continued that the 2021 selling season has started well, following on from a stronger-than-expected housing market recovery in the second half of 2020.
"In 2021, assuming the market remains broadly stable, we expect to deliver 85-90% of 2019 volumes and make further progress towards our medium term operating margin target of c.21-22%," the company said.
Taylor Wimpey added that it will be resuming ordinary dividend payments by returning GBP151 million, or 4.14 pence per share, as a final payout for 2020. The firm cancelled its 2019 final dividend and a planned special payout.
"We are not proposing to return excess capital in 2021. We will review the level of excess capital and potential return in respect of 2021 at the time of the 2021 full year results in February 2022, for payment in 2022," the company said.
There was also some upbeat UK house price data out on Tuesday. UK house price growth surprisingly accelerated in February, according to figures from Nationwide.
Annually, UK house price growth was 6.9% in February, strengthening from the 6.4% rise seen for January. On a monthly basis, prices grew 0.7%, reversing the 0.2% dip seen at the start of the year.
This brought the average house price in the UK to GBP231,068 in February, the highest on record, from GBP229,748 in January.
"This increase is a surprise. It seemed more likely that annual price growth would soften further ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase," said Robert Gardner, Nationwide's chief economist.
Ashtead shares fell 2.5% in opening trade, putting the stock at the bottom of the FTSE 100 even as the equipment rental firm lifted its outlook.
Statutory revenue was down 1% to GBP1.21 billion for the third quarter and down 2% to GBP3.76 billion for the nine-month period to January 31. Statutory pretax profit was down 4% to GBP210 million in the third quarter and down 17% to GBP716 million in the nine months.
Chief Executive Brendan Horgan said: "The strength of our business model and balance sheet positions the group well in markets that are likely to remain uncertain. With our businesses performing well, we now expect full year results ahead of our previous expectations. The benefit we derive from the diversity of our products, services and end markets, coupled with ongoing structural change, enables the board to look to the future with confidence."
Also lower were oil majors, with BP down 2.3% early Tuesday and Royal Dutch Shell 'A' and 'B' shares falling 1.9% and 1.8% respectively. Brent oil was trading at USD62.83 a barrel, down from USD64.94 late Monday.
Shooting to the top of the FTSE 250 was Renishaw, up 18% as it launched a formal sale process.
Executive Chair David McMurtry and Non-Executive Deputy Chair John Deer, the company's founders, have indicated they intend to sell their "very substantial" shareholdings in Renishaw. Together, the founders own around 53% of the group, and have expressed a preference for the disposal of their entire combined shareholding.
The board has mulled over various options with its advisers, and has unanimously concluded that it would be appropriate to investigate the sale of the company and thus is launching a formal sale process. UBS is acting as sole financial adviser and corporate broker to the company.
"We are both grateful for our continued good health, however we recognise that neither of us is getting any younger. Now finding ourselves in our 80s, our thoughts have increasingly turned to considering the future of our shareholdings in the company and how we can actively contribute to securing the future success of the business. With that in mind, we approached the rest of the board to indicate that we felt the time was now right to discuss the best way to achieve this," said McMurtry and Deer.
The data calendar for Tuesday has German unemployment figures at 0855 GMT and eurozone inflation data at 1000 GMT.
By Lucy Heming; lucyheming@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
