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(Alliance News) - Stocks in London and key European markets were trading mostly lower on Monday midday, amid a firm pound and continued concerns about the lingering Covid-19 pandemic and despite the EU putting its digital tax plan "on hold" during OECD talks.
The index of London blue-chips was down 49.86 points, or 0.7%, at 7,072.35 on Monday. The mid-cap FTSE 250 index was down 29.41 points, or 0.1%, at 22,879.91. The AIM All-Share index was up 0.1% at 1,250.14.
The Cboe UK 100 index was down 0.7% at 703.63. The Cboe 250 was down 0.2% at 20,558.58, and the Cboe Small Companies down 0.3% at 15,349.88.
In mainland Europe, the CAC 40 in Paris was down 0.4%, while the DAX 30 in Frankfurt was 0.2% lower.
The European Commission said Monday it would delay its plan to propose an EU digital tax in order to not jeopardise efforts to secure a global deal on fairer taxation.
After an "extraordinary" breakthrough at G20 talks on Saturday, "we have decided to put on hold our work on a proposal for a digital levy", an EU spokesman said, a day after Washington asked Brussels to delay its tax plan.
US Treasury Secretary Janet Yellen on Sunday urged the EU to reconsider its plans for a "discriminatory" digital tax, saying the new global reform deal should make it redundant.
Meeting in Venice, G20 ministers, including Yellen, on Saturday endorsed a plan agreed by 132 countries to overhaul the way multinational companies, including US digital giants, are taxed.
"The agreement that we've reached in the OECD framework discussion calls on countries to agree to dismantle existing digital taxes that the US has regarded as discriminatory and to refrain from erecting similar measures in the future," Yellen told reporters.
The pound was quoted at USD1.3852 on Monday midday, higher than USD1.3831 at the London equities close on Friday.
The euro traded at USD1.1846 on Monday, down from USD1.1856 late Friday in London. Against the yen, the dollar was quoted at JPY110.17, broadly unchanged from JPY110.20.
Turning to company news, Admiral was the best performer among London blue-chips, up 3.0% early on Monday. The Cardiff, Wales-based insurer said it is set to report higher-than-expected pretax profit from continuing operations for the six months to the end of June, in the range of GBP450 million to GBP500 million.
For the first half of 2020, Admiral posted pretax profit of GBP286.7 million.
The strong performance was boosted by "unusually positive" development in the UK motor bodily injury claims which has led to higher reserve releases and profit commission revenue.
In addition, Admiral said its interim dividend is expected to be in the range of 110 pence to 125p per share, up from 70.5p paid a year before.
Among mid-caps, Dechra Pharmaceuticals was up 1.6% after reporting a stronger-than-expected trading performance. The company said it delivered year-on-year organic revenue growth, supplemented by the product acquisitions of Osurnia and Mirataz.
Dechra said revenue for the financial year to June 30 increased by 21% at constant exchange rate or by 18% at actual exchange rate.
"We are pleased to have continued to outperform a robust market throughout the pandemic affected financial year. We have benefited from above average market growth in the majority of our key CAP markets," said Chief Executive Ian Page.
Tate & Lyle was up 1.5% as it has agreed to sell a controlling stake in a new company and its subsidiaries, comprising its Primary Products business in North America and Latin America and its interests in the Almidones Mexicanos and DuPont Tate & Lyle Bio-Products joint ventures.
The assets will be sold to KPS Capital Partners. Tate & Lyle said it expects to receive gross cash proceeds of USD1.3 billion, resulting in net cash proceeds of USD1.2 billion after adjustments and transaction costs.
Following completion, the company said it intends to return GBP500 million to Tate & Lyle's shareholders through a special dividend and associated share consolidation. Completion is expected in the first quarter of 2022.
Tate & Lyle and KPS will each own 50% of new company - valued at around USD1.7 billion - with KPS having board and operational control.
Plus500 gained 1.2% after saying that its financial position remains robust and cash balances are healthy.
The online trading platform's revenue in the six months to the end of June was USD346.2 million, down from USD564.2 million posted for the first half of 2020, though up from 148.0 million in the same period of 2019. Customer Income, a key underlying growth metric for Plus500, reached USD379.2 million, lower than USD556.9 million a year earlier but up from USD175.0 million in 2019.
Plus500 said 136,980 new customers were onboarded during the recent half year, down from 198,176 a year before but up 47,540 two years before.
The company noted that its results reflect regulatory changes put in place in Australia during the period, the impact of which it is still assessing. Plus500 said it remains confident about its performance during the remainder of 2021 and beyond.
On the other side of the FTSE 250 index was Wizz Air, down 3.6%, after Morgan Stanley cut the budget airline to Equal Weight from Overweight. The US investment bank raised peer easyJet to Overweight from Equal-Weight, but easyJet shares still were down 3.2%.
Gold was quoted at USD1,800.10 an ounce on Monday midday, down from USD1,809.40 on Friday. Brent oil was trading at USD74.24 a barrel, down from USD75.70 late Friday.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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