(Alliance News) - Stock prices in London opened lower on Monday as investors grew more concerned over the spread of the Delta variant of Covid-19, while Hargreaves Lansdown shares slipped after warning on higher costs and earnings missing forecasts.
The FTSE 100 index was down 13.70 points, or 0.2%, at 7,109.25. The mid-cap FTSE 250 index was down 71.66 points, or 0.3%, at 23,385.66. The AIM All-Share index was down 0.2% at 1,259.76.
The Cboe UK 100 index was down 0.2% at 708.30. The Cboe 250 was down 0.4% at 21,180.35, and the Cboe Small Companies flat at 15,405.34.
In mainland Europe, the CAC 40 in Paris and DAX 30 in Frankfurt were both up 0.1%.
In the FTSE 100, AstraZeneca was up 0.8% after Morgan Stanley resumed coverage on the Anglo-Swedish drugmaker with an Overweight rating. In addition, AstraZeneca said it Forxiga drug was approved in the EU for treatment of chronic kidney disease.
At the other end of the large-caps, Hargreaves Lansdown was the worst performer, down 8.8%, even as the fund supermarket reported positive annual results.
For the financial year that ended June 30, revenue rose 15% to GBP631.0 million from GBP550.9 million last year, but pretax profit was GBP366.0 million, down 3.0% from GBP378.3 million. The revenue and profit figures missed consensus estimates from Jefferies of GBP636.7 billion and GBP383.0 million respectively.
The Bristol-based firm reported strong growth in assets under administration, which were up 30% to GBP135.5 billion from GBP104.0 billion. Net new business inflows were up 13% to GBP8.7 billion from GBP7.7 billion. However, this also missed Jefferies forecasts of GBP136.3 billion and GBP9.2 billion respectively.
Looking ahead, Chief Executive Officer Chris Hill said: "With this continued investment in our people, proposition, service and technology as well as the cost of servicing an enlarged and growing client base, we expect 2022 costs to reflect this investment and continue to be broadly aligned to client growth."
Hargreaves Lansdown also warned it has seen a slowdown in dealing volumes and client activity versus the elevated levels at the time last year.
"While market share increased marginally and retention remains 92% on a client numbers and AUA basis, the problem of having more, less profitable, clients is emerging. With new and aggressive competitors joining the UK market, revenue margins falling and costs rising, financial 2022 will see these trends continue. Despite strong client recruitment and retention and clear market leadership, we think HL may be vulnerable," said analysts at Jefferies.
In the FTSE 250, Vectura Group was up 2.3% at 167.80 pence after Philip Morris International raised its bid for asthma treatment firm to 165 pence per share.
The Marlboro cigarette maker's offer bested the 155p offer from private equity firm Carlyle to which Vectura had agreed on Friday. The new offer values Vectura at GBP1.02 billion. PMI previously had offered 150p per Vectura share.
Clarkson was up 2.0% after the shipping services provider reported a robust set of interim earnings, with strong trading across all areas of the business.
For the six months to June 30, revenue was GBP190.1 million, up 5.4%, GBP180.4 million last year, and pretax profit rose 31% to GBP27.3 million from GBP20.9 million.
The company declared an interim dividend of 27p, up 8% from 25p paid out at the halfway stage last year.
Elsewhere, Deliveroo was up 5.3% after Germany's Delivery Hero built a 5.1% stake in its UK rival, crossing the 5% threshold on Friday, according to a regulatory release on Monday. Delivery Hero was 0.1% lower in Frankfurt.
In China on Monday, the Shanghai Composite closed up 1.0%, while the Hang Seng index in Hong Kong was up 0.5%. Financial markets in Japan were closed on Monday for the Mountain Day holiday. The S&P/ASX 200 in Sydney finished flat.
Chinese factory inflation rose by more than expected in July, data showed Monday, as surging commodity prices offset government measures to temper costs.
The producer price index, which measures the cost of goods at the factory gate, rose to 9.0% on-year, the same as May, which was a 13-year high, according to the National Bureau of Statistics.
While the PPI remains elevated, consumer inflation ticked down to 1.0% in July, with officials stressing their work to stabilise prices in the wake of recent disasters including floods in central China and with companies appearing to absorb the increases instead of passing them on to consumers.
The pound was quoted at USD1.3887 early Monday, up from USD1.3862 at the London equities close Friday.
The euro was priced at USD1.1755, marginally lower from USD1.1760. Against the Japanese yen, the dollar was trading at JPY110.12, down from JPY110.30.
Brent oil was quoted at USD69.00 a barrel Monday morning, down sharply from USD70.92 late Friday. Gold was trading at USD1,745.26 an ounce, down from USD1,764.55.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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