(Alliance News) - Stock prices in London opened lower on Wednesday, defying calls for a higher open, with Hargreaves Lansdown and British American Tobacco weighing on the FTSE 100.
London's blue-chip index was down 30.58 points, or 0.4%, at 6,718.28. The FTSE 250 index was down 52.61 points, or 0.4%, at 21,363.76, and the AIM All-Share index was down 0.3% at 1,225.04.
The Cboe UK 100 index was down 0.5% at 667.81 points. The Cboe 250 was down 0.1% at 18,861.02, but the Cboe Small Companies was up 0.1% at 12,777.71.
The CAC 40 index in Paris was down 0.4% and Frankfurt's DAX 30 was 0.5% lower.
In the FTSE 100, oil major BP was the best performer, up 2.0%, and peer Royal Dutch Shell 'A' and 'B' shares were up 0.7% and 1.2% respectively, tracking spot oil prices higher.
Brent oil was quoted at USD64.00 a barrel Wednesday morning, up sharply from USD62.98 at the London equities close Tuesday, finding support from a deadly winter storm in Texas that has hit output in the key production state.
"Crude prices hang on to Monday's rally as the US cold snap continues to play havoc with domestic energy markets. By its nature, snow in Texas is a temporary thing, and it will reverse as quickly as the weather patterns change," commented Axi's Stephen Innes.
Rio Tinto was up 0.9% after the miner upped its annual payout with a record final dividend, shrugging off Covid-19 to post a hefty profit rise for 2020.
Revenue in 2020 was up 3.3% to USD44.61 billion from USD43.17 billion. Its pretax profit surged 38% to USD15.39 billion from USD11.12 billion.
The Anglo-Australian miner raised its annual dividend by 26% to 557.0 US cents from 443.0 cents.
"USD9.0 billion full-year dividend, equivalent to 557 US cents per share and 72% of underlying earnings, includes USD5.0 billion record final ordinary dividend (309 US cents per share) and USD1.5 billion special dividend (93 US cents per share) declared today," Rio Tinto explained.
Rio Tinto's earnings follows peer BHP's upbeat interim results on Tuesday which saw the company declare a record dividend of its own. Also on Tuesday, commodities trader and miner Glencore restored its payout to shareholders. BHP and Glencore were down 0.4% and 0.6% respectively.
At the other end of the large caps, Hargreaves Lansdown was the worst performer, down 7.2% at 1,533.50p, following a substantial share sale from its co-founder.
Peter Hargreaves sold GBP300 million shares in the fund supermarket, Barclays Bank confirmed on Wednesday. Hargreaves - who founded the firm alongside Stephen Lansdown in 1981 - sold 19.5 million shares at GBP15.35 each.
Following the GBP300 million bookbuild, he holds just shy of a 20% stake in the FTSE 100 firm.
In February of last year, Hargreaves sold a GBP550 million stake in the company.
British American Tobacco was 6.5% lower. The Dunhill and Rothmans cigarette maker lifted its dividend for 2020, as profit rose considerably on an improved operating performance and lower costs, despite a dip in revenue.
For the year, the tobacco group posted pretax profit of GBP8.67 billion, a 9.6% rise from GBP7.91 billion the year before. Revenue for 2020 declined by 0.4% to GBP25.78 billion from GBP25.88 billion the prior year.
British American Tobacco declared a dividend of 215.6 pence, up 2.5% from 210.4p paid out in 2019.
Looking ahead, the group expects its adjusted earnings per share in constant currency to rise by a mid-single figure for 2021, while revenue is set to grow by between 3% and 5%. However, the global cigarette market is expected to be down 3%, while the US market remains dependent on Covid-19 uncertainty.
"Not too many 2020 surprises given the trading update. On RRP specifics, heated slightly worse than expected while vapour/modern oral slightly better. The 2021 guide will be disappointing however, at only 'mid-single digits' despite recovering industry volumes," said analysts at Jefferies.
RRP refers to reduced-risk products, such as oral tobacco and tobacco heating products.
Meanwhile, London's IPO market continued its lockdown bonanza on Wednesday, with Auction Technology pricing its GBP250 million raise.
The operator of online auctions said it has set its initial public offering price at 600p per share, giving the company a market capitalisation of GBP600 million upon listing.
Auction Technology is offering up to 41.2 million new shares to raise GBP247.4 million gross for the company. Additionally, selling shareholders will offer 4.2 million existing shares for sale. The total shares being offered will represent up to 45.5% of the total.
Conditional dealings on the London Main Market will start next Tuesday, with unconditional dealings following on February 26.
On Tuesday, online retailer Virgin Wines UK announced plans for a market float on AIM, while miner Cornish Metals began trading on the junior market.
The Japanese Nikkei 225 index closed down 0.6% on Wednesday, while the Hang Seng index in Hong Kong was up 1.1%. The Shanghai market remained closed on Wednesday for the Lunar New Year holiday and will re-open on Thursday.
The pound was quoted at USD1.3888 early Wednesday, down from USD1.3911 at the London equities close Tuesday.
UK inflation edged higher annually in January with the country in lockdown, according to the latest figures from the Office for National Statistics.
On an annual basis, UK consumer prices rose 0.7% in January, accelerating from 0.6% in December. The reading beat market consensus, cited by FXStreet, for an 0.5% increase.
On a monthly basis, consumer prices fell 0.2% in January following a rise of 0.3% in December. Consensus had expected the reading to come in at negative 0.4%.
The euro was priced at USD1.2078, lower from USD1.2110. Against the yen, the dollar was trading at JPY106.00, up from JPY105.78.
Gold was quoted at USD1,790.33 an ounce, down against USD1,803.32.
In the economic calendar for Wednesday, there are US producer prices and retail sales due at 1330 GMT. Minutes from the previous US Federal Reserve meeting are out at 1900 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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