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(Alliance News) - Stock prices in London opened lower on Tuesday amid fears over a second wave of coronavirus infections, while in the FTSE 100 Vodafone and Land Securities moved in opposite directions as one preserved and the other cut dividend payouts.
The large-cap index was down 6.81 points, or 0.1%, at 5,932.92. The mid-cap FTSE 250 index was down 44.14 points, or 0.3%, at 16,227.35. The AIM All-Share index was down 0.2% at 825.15.
The Cboe UK 100 index was flat at 10,039.40. The Cboe 250 was down 0.1% at 13,876.25, and the Cboe Small Companies was up 0.1% at 8,996.68.
In mainland Europe, the CAC 40 in Paris was down 0.1%, while the DAX 30 in Frankfurt was down 0.3%.
After weeks of no new cases, Wuhan, the central Chinese city where the outbreak first emerged, reported six new infections in two days and South Korea announced its biggest spike in new cases for more than a month.
"Market sentiment remains fragile. There's a lot of emphasis being placed on the virus numbers in economies that have been gradually reopening. Wuhan, the city in China where it all began reported its first 'cluster' of new cases yesterday after lifting restrictions a month ago. The biggest risk to the upswing in markets is a second wave in the pandemic. So far investors don't want to jump the gun because case numbers can easily fall back again," said London Capital Group's Jasper Lawler.
In the FTSE 100, Vodafone Group was the best performer, up 4.6% after the telecommunications firm bucked the trend by maintaining its prized dividend.
Many other FTSE-listed firms, including rival BT, have scrapped payouts in light of the coronavirus outbreak.
Vodafone kept its total dividend unchanged at 9.0 euro cents. The decision keeps its dividend yield above 6% at its current price of 118.22p.
For the financial year ended March 31, the mobile phone operator swung to a pretax profit of EUR795 million from a loss of EUR2.61 billion in financial 2019 on revenue which rose 3% to EUR44.97 billion from EUR43.67 billion last year.
Vodafone said adjusted earnings before interest tax depreciation and amortisation grew by 2.6% to EUR14.9 billion, reflecting revenue progression and cost savings success. Free cash flow grew by 12% to EUR4.9 billion.
In addition, Vodafone said it was on track to separate its European tower infrastructure and is preparing for a potential initial public offering in early calendar 2021.
eToro analyst Adam Vettese noted: "If you're an investor, then by far the most welcome news today will be Vodafone's decision to maintain its dividend payment, especially after deciding to cut it this time last year.
"As one of the FTSE 100's biggest dividend payers, it's a real coup for investors at a time when other major firms are slashing or even binning their payments to shareholders. Vodafone has been able to do that because it has managed to grow revenues and the amount of cash on its balance sheet, despite admitting Covid-19 has disrupted business."
WM Morrison Supermarkets was up 1.5% after the supermarket chain reported sales growth in the first quarter despite "highly volatile" trading patterns and a worse-than-expected Easter due to the ongoing coronavirus lockdown in the UK.
For the 14-week period from February 3 to May 10, the grocer said like-for-like sales excluding fuel were up 5.7% - with retail sales up 5.1% and wholesale up 0.6%. Morrisons said that retail like-for-like sales were up 5% for the first six weeks of the year. Sales were flat in the first four weeks of financial 2021 with weeks five to seven being marked by "considerable stocking up" by customers, lifting sales.
At the other end of the large-cap index, Land Securities was the worst performer, down 7.5%. The property company cut its dividend, as it reported a widened annual loss, after coronavirus shutdowns forced tenants to default on rent payments.
For the financial year to March 31, the commercial property developer's pretax loss widened to GBP837 million from a loss of GBP123 million in financial 2019 as revenue slipped 6.3% to GBP414 million from GBP442 million. The company said the value of its assets fell 8.8% in the recent year to GBP1.18 billion from a decline of GBP557 million last year.
LandSec slashed its full-year dividend 49% to 23.2 pence per share from 45.55p last year.
Peer British Land was down 3.5% in a negative read-across.
The pound was quoted at USD1.2338 early Tuesday, firm from USD1.2328 at the London equities close Monday.
Ahead, Chancellor of the Exchequer Rishi Sunak is expected to announce a further extension of the furlough scheme to subsidise the wages of workers temporarily laid off during the outbreak.
It has been reported the programme - which currently runs to the end of June - will continue to September, although the rate of support will be cut from a maximum of 80% of salary to 60%.
Sunak warned last week that the scheme was not "sustainable" at its current rate although he promised there would be no "cliff edge" cut-off.
The euro was quoted at USD1.0813, flat from USD1.0812. Against the yen, the dollar was trading at JPY107.40, lower than JPY107.66 late Monday.
The Japanese Nikkei 225 index closed up 0.1%. In China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong is down 1.6%.
Consumer inflation in China slowed in April, and Covid-19 continued to hurt producer prices, data from the National Bureau of Statistics showed.
In April, consumer prices rose 3.3% year on year, slowing from a 4.3% rise in March. Market consensus, according to FXStreet, had predicted a 3.7% consumer price inflation rate in April.
The producer price index - which reflects what factories charge wholesalers - fell 3.1% in April, accelerating from March's 1.5% slip and steeper than market consensus of a 2.6% drop.
Brent oil was quoted at USD30.06 a barrel Tuesday morning, up from USD29.78 at the London equities close Monday. Gold was quoted at USD1,701.89 an ounce, firm against USD1,698.03.
The economic calendar has US inflation readings at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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