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(Alliance News) - Stocks in London ended mixed on Thursday on heightened Covid-19 fears on the continent, while Unilever announced a deal to sell its tea business.
The FTSE 100 index closed down 35.24 points, or 0.5%, at 7,255.96. The FTSE 250 ended up 140.55 points, or 0.6%, at 23,574.62. The AIM All-Share index closed down 10.13 points, or 0.8%, at 1,236.75.
The Cboe UK 100 index ended down 0.5% at 718.80. The Cboe 250 ended up 0.4% at 21,006.20. The Cboe Small Companies ended down 0.7% at 15,481.40.
In Paris, the CAC 40 stock index closed down 0.2%, while the DAX 40 in Frankfurt ended down 0.2%.
"European stocks have been altogether more resilient this week, with the DAX and CAC 40 once again setting new record highs today, however we have slid back heading into the close, after US markets rolled back after initially opening in positive territory. Talk of tighter covid restrictions being rolled out incrementally across Europe appears to be tempering risk appetite, over concerns of lower demand heading into the winter months," said CMC Markets analyst Michael Hewson.
In the FTSE 100, Royal Mail ended the best performer, up 9.8%, after the postal operator reported a surge in interim profit but warned on rising costs.
Revenue for the half-year to September 26 rose 7.1% to GBP6.07 billion and pretax profit multiplied to GBP315 million from just GBP17 million year-on-year. Adjusted operating profit jumped to GBP404 million from GBP37 million.
The parcels and letters delivery firm saw a recovery in profitability in its domestic unit and continued to benefit from a structural shift in parcel volumes from the Covid-19 pandemic.
The former state monopoly declared an interim dividend of 6.7p, having paid none last year. It also will pay a special dividend worth GBP200 million in total and also will start a GBP200 million share buyback immediately. It didn't provide the per-share amount of the special dividend.
At the other end of the large-caps, GlaxoSmithKline lost 3.0% after the stock went ex-dividend meaning new buyers no longer qualify for the latest payout.
Unilever closed down 0.8%. The consumer goods firm just before the close said it entered into an agreement to sell its tea business, ekaterra, to CVC Capital Partners Fund for EUR4.5 billion on a cash-free, debt-free basis. The portfolio houses 34 brands including Lipton, PG tips and Pukka.
In the FTSE 250, Crest Nicholson ended the among the best performers, up 5.2%, after the housebuilder said it expects profit for its recently ended financial year to be ahead of market consensus.
For the year that ended October 31, Crest Nicholson anticipates adjusted pretax profit to be marginally ahead of consensus expectations, set at GBP101.2 million, driven by a stronger contribution from Longcross Film Studio than initially anticipated.
In May, the group sold its 50% interest in the studio to Longcross General Partner Ltd, an Aviva Investors company.
The Chertsey, Surrey-based firm posted adjusted pretax profit of GBP45.9 million in financial 2020 and GBP121.9 million in financial 2019. In addition, Crest Nicholson reported a strong sales performance throughout the second half of the year, as the sales rate remained robust across all regions.
Blue-chip housebuilders ended among the best performers in a positive read-across. Persimmon closed up 4.8%, Berkeley up 3.9%, Taylor Wimpey up 3.8% and Barratt Developments up 3.6%.
"House builders are also showing a bit more resilience today, with Persimmon and Taylor Wimpey leading the way after sector peer Crest Nicholson said that its full year profits would be marginally ahead of consensus after a strong H2 sales performance. This comes across as a little bit after the fact given that we got some decent trading updates last week from both, with both companies saying that they expected to deliver on full year expectations, which investors acted rather ambivalently to," said Hewson.
Playtech closed up 3.9% after the gaming software provider confirmed it received a preliminary takeover approach from JKO Play, further complicating an existing deal with Australia's Aristocrat Leisure.
JKO is a company controlled by Eddie Jordan and Keith O'Loughlin. Sky News late Wednesday had first reported the third approach for Playtech. JKO has been provided with access to due diligence information, and talks are ongoing, Playtech said, though they are at an early stage.
There is no guarantee JKO will make an offer for the company, it said. In mid-October, Playtech agreed to be bought by Sydney-listed Aristocrat in a deal worth 680 pence per share or GBP2.1 billion in total. Then earlier this month, Playtech revealed that it also had received an initial approach from Gopher Investments. It said on Thursday that talks with Gopher continue.
At the other end of the midcaps, Biffa ended the worst performer, down 9.2%. The waste management firm reinstated its interim dividend after a first half that saw revenue top levels seen prior to the coronavirus pandemic, but it warned that progress at its Seaham recycling plant has been slower than expected.
The High Wycombe, England-based company trimmed its pretax loss to GBP25.6 million for the first half ended September 24 from GBP52.5 million a year previously.
In addition, Peel Hunt downgraded Biffa to Hold from Add after an "unwelcome" impairment at its Company Shop.
Elsewhere in London, Metro Bank plunged 20% after private equity firm Carlyle Group backed out of a potential takeover of the the high street bank.
The duo have agreed to end talks over a possible takeover offer. Though both parties announced the decision, neither gave a reason.
The pound was quoted at USD1.3475 at the London equities close, up from USD1.3465 at the close Wednesday.
The euro stood at USD1.1351 at the European equities close, up from USD1.1309 late Wednesday. Against the yen, the dollar was trading at JPY114.28, down from JPY114.51.
Stocks in New York were lower at the London equities close despite data showing US initial jobless claims fell for a seventh week straight and to a fresh post-pandemic low.
The DJIA was down 0.5%, the S&P 500 index down 0.1% and the Nasdaq Composite down 0.2%.
For the week to November 13, initial claims totalled 268,000, down by just 1,000 on the week before at 269,000. Nonetheless, the Department of Labor said this marked a new low since March 14, 2020 - just before the pandemic began to rattle the labour market - when claims were 256,000.
Markets had been looking for a bigger decline, to 260,000, according to consensus cited by FXStreet.
On Wall Street, Nvidia was up 9.0% after the world's largest chipmaker, late Wednesday, reported record revenue in the third quarter on the back of surging demand for its AI Software.
In the three months to October 31, the Santa Clara, California-based graphics card and chipsets manufacturer reported net income of USD2.46 billion, up 84% from USD1.34 billion a year before. Diluted earnings per share improved to USD0.97 from USD0.53.
Brent oil was quoted at USD80.30 a barrel at the London close, down sharply from USD81.58 at the close Wednesday.
Gold stood at USD1,861.03 an ounce at the market close, lower against USD1,864.44 late Wednesday.
The economic events calendar on Friday has UK retail sales figures and Germany producer prices at 0700 GMT.
The UK corporate calendar on Friday has third-quarter earnings from DIY retailer Kingfisher and annual results from construction firm Kier Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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