LONDON MARKET CLOSE: Europe rises; FTSE treads water in cautious trade

(Alliance News) - London's FTSE 100 underperformed its European counterparts on Tuesday, rising by just over a point as investors continued to trade with trepidation following US inflation data and ahead of Wall Street's corporate earnings season.

Trade continued to be cautious on Tuesday, ahead of major US banks reporting on their first-quarter earnings later this week. The FTSE also struggled to make larger headway as sentiment was dented by the latest US consumer price index reading, which stoked inflationary fears.

"A rise in US inflation served to highlight the fears that could gradually factor into market thinking in the months ahead, with markets on both sides of the Atlantic failing to gain traction today," IG Markets analyst Joshua Mahony commented.

The FTSE 100 index rose just 1.37 points to close at 6,890.49. The mid-cap FTSE 250 ended the session 114.91 points, or 0.5%, higher at 22,268.46. The AIM All-Share index closed 10.92 points, 0.9%, higher at 1,245.61.

The Cboe UK 100 index ended down 0.1% at 686.40. The Cboe 250 closed up 0.5% at 19,868.81. The Cboe Small Companies closed up 0.4% at 14,296.01.

The DAX 30 in Frankfurt rose 0.1%, the CAC 40 in Paris ended 0.4% higher.

On the FTSE 100, Just Eat Takeaway ended the best performer, rising 6.8%. The food delivery services provider saw an improved performance in the first quarter of its current financial year, driven by strong growth in the UK and by its investment programme.

Just Eat said total orders in the first quarter grew by 79% year-on-year to 200.0 million, while delivery orders surged to 69.4 million from 23.3 million.

Delivery orders in the UK multiplied to 22.9 million in the first quarter of 2021 from 2.9 million a year earlier. New partnerships were signed with household brands such as Leon, Tortilla and Chipotle, as well as coffee chains Starbucks and Costa, adding to Just Eat's growing restaurant supply. In London, Just Eat Takeaway said it achieved triple-digit order growth.

Newly-listed rival Deliveroo rose 4.7%. Deliveroo said it has expanded its grocery delivery partnership with Sainsbury's to around 100 UK stores as part of a new two-year contract.

The new locations include stores in Leeds, York, Liverpool, Newcastle, Glasgow and Aberdeen. The expansion also includes 22 new stores in London, the UK's capital.

Sainsbury's shares ended down 0.9%.

JD Sports rose 3.0%. The athletic apparel retailer said it delivered a resilient annual performance even though its high-street stores being closed for a majority of the year under lockdown restrictions.

For the financial year ended January 30, revenue was GBP6.17 billion, up 0.9% from GBP6.11 billion in financial 2020. JD posted pretax profit of GBP324.0 million, down 7.0% from GBP348.5 million.

On a headline basis, meaning before exceptional items, pretax profit was GBP421.3 million, beating the company's January forecast of GBP400 million.

Babcock International jumped 32%, the best mid-cap performer. The defence contractor will not pay a dividend for financial 2021 or 2022, though it also ruled out coming cap in hand to the market for more cash.

Babcock said its financial 2021 results will include GBP1.7 billion in impairments and charges following a contract profitability and balance sheet review.

The company added that it aims to "return Babcock to strength without the need for an equity issue".

Among actions it intends to take instead, Babcock said it expects to raise GBP400 million from disposals over the next 12 months. Additionally, a restructuring plan is expected to save GBP40 million per year from a one-off expense of GBP40 million.

Also helping the FTSE 250 recoup its losses from Monday were share price gains for pub operators JD Wetherspoon and Mitchells & Butlers, both ending up 1.3%, and Sports Direct owner Frasers Group, rising 1.2%. The trio, among those allowed to lift shutters following yesterday's lockdown ease in England, had slipped on Monday amid profit taking.

The pound was quoted at USD1.3738 at the London equities close on Tuesday, down from USD1.3746 on Monday. The euro was trading at USD1.1930, up from USD1.1911.

The UK economy grew 0.4% month-on-month in February, rebounding from 2.2% contraction in January, as UK government restrictions affecting economic activity remained broadly unchanged. The latest reading missed the the market forecast, cited by FXStreet, for 0.6% growth.

US stocks were mixed at the time of the London close on Tuesday. The Nasdaq Composite was 0.6% higher, the S&P 500 up 0.2%%, but the Dow Jones Industrial Average was down 0.3%.

"Stronger than forecast inflation sent the Dow Jones lower on Tuesday, as did a negative update on the Johnson & Johnson Covid jab," Spreadex analyst Connor Campbell said.

The pace of US consumer inflation quickened in March as the economy began to reopen and vaccine rollout continued apace, the latest figures from the Department of Labor showed.

On an annual basis, US consumer prices jumped to 2.6% in March, accelerating from 1.7% in February. The latest print was slightly above market forecasts, cited by FXStreet, of 2.5% and was at the highest level since August 2018.

The consumer price index rose 0.6% in March month-on-month, ticking up from a 0.4% rise in February. The reading just beat the market estimate of 0.5%.

Campbell added: "The core reading, meanwhile, climbed from 0.1% to 0.3%, surpassing the 0.2% estimates. Those aren't huge overshoots. However, they are eight-month and seven-month highs respectively, and leaves non-core annual inflation at 2.6%, a decent whack above the Fed's standard 2% target."

Against the Japanese yen, the dollar fetched JPY109.25 late Tuesday, down from JPY109.40 on Monday.

Johnson & Johnson shares were 2.7% lower in New York.

It will delay the rollout of its vaccine in Europe after US regulators recommended a "pause" of the vaccine as it investigates any links between it and blood clots.

In a joint statement, the Centres for Disease Control & Prevention and the Food & Drug Administration said they were investigating clots in six women in the days after vaccination, in combination with reduced platelet counts.

More than 6.8 million doses of the J&J vaccine have been administered in the US.

Brent oil fetched a USD63.84 barrel at the London equities close on Tuesday, up from USD63.58 on Monday. Gold was trading at USD1,742.96 an ounce, up from USD1,734.45.

Wednesday's economic calendar has eurozone industrial output figures at 1000 BST.

The local corporate calendar has annual results from grocer Tesco and trading statements from recruiter Robert Walters and residential rent manager Watkin Jones.

By Eric Cunha; ericcunha@alliancenews.com

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