LONDON MARKET CLOSE: Ex-dividend stocks weigh on FTSE amid DAX record

(Alliance News) - London's FTSE 100 was back in negative territory on Thursday, giving up some gains from a strong Wednesday session and trailing European peers, with Frankfurt's DAX 30 stock notably notching another record close.

The mining and oil sector weighed on the FTSE 100, as a number of stocks went ex-dividend, though the FTSE 250, though still ending lower, fared better than its blue-chip counterpart, helped by share price gains for Cineworld.

The FTSE 100 index closed down 26.91 points, or 0.4%, at 7,193.23. It was an uninspiring follow-up to a strong session on Wednesday, which saw the large-cap benchmark's highest close since late-February 2020.

The mid-cap FTSE 250 index, fresh from a record close on Wednesday, straddled the water line but eventually ended a fraction lower. The index closed down 10.06 points at 23,746.77, just short of a new record close. The AIM All-Share index ended up 2.84 points, or 0.2%, at 1,270.86.

The Cboe UK 100 index ended down 0.3% at 716.75. The Cboe 250 rose 0.4% at 21,583.13, and the Cboe Small Companies closed 0.4% higher at 15,551.63.

In mainland Europe, the CAC 40 in Paris ended up 0.4% and the DAX 30 in Frankfurt rose 0.7%, setting a new closing record in the process.

German markets got a boost from Deutsche Telekom, which rose 2.9% after it bumped up full-year financial guidance once more after posting quarterly profit growth.

The Bonn, Germany-based telecommunications company reported organic net revenue growth of 6.8% for the second quarter of 2021 from a year before, reaching EUR26.59 billion. At actual rates, net revenue dipped 1.7%.

Pretax profit surged 74% from a year before to EUR3.19 billion. Personnel costs fell 8.4% to EUR4.70 billion and 'other' operating expenses dropped 35% to EUR954 million.

In London, telecommunications firms Vodafone and BT ended 0.5% and 0.9% higher.

Aviva shares rose 3.5%, the best blue-chip performer in London. The insurer raised its dividend and pledged to return more cash to shareholders.

Aviva reported pretax profit from continuing operations for the six months that ended June 30 of GBP396 million, down from GBP739 million a year before. Total income more than doubled to GBP14.78 billion from GBP6.98 billion.

However, the company booked a GBP8.45 billion hit on changes in investment contract provisions, swung from a GBP5.72 billion gain a year before. Net earned premiums declined by 12% to GBP6.65 billion from GBP7.51 billion a year ago.

Aviva declared an interim dividend of 7.35 pence a share, up 5.0% from 7.00p a year before. In addition, the London-based firm said it aims to buy back up to 300 million shares for up to GBP750 million to reduce its share capital.

Elsewhere among blue-chips, such strong gains were hard to come by. At the other end of the index, Evraz dropped 7.1%, it was among a host of stocks that went ex-dividend. This means new buyers no longer qualify for the latest payout.

BP fell 1.5% and Royal Dutch Shell A and B shares dropped 1.4% and 1.8%. The oil majors also went ex-dividend on Thursday.

In the FTSE 250, Cineworld closed among the best performers, rising 3.9%. The multiplex chain expressed confidence in its prospects as lockdown restrictions ease and added it is muling a listing or partial float of its US movie theatre business Regal Entertainment on Wall Street.

Cineworld said its pretax loss narrowed to USD576.4 million in the first half of 2021 from USD1.64 billion a year before, as its movie houses were allowed to reopen. Revenue totalled USD292.8 million, down sharply from USD712.4 million a year before, a period that included some time pre-pandemic.

With 9,269 screens worldwide, Cineworld said it expects strong trading in the fourth quarter due to a strong film slate and pent-up demand and said the actions it took to cope with the virus pandemic have strengthened the business.

It noted plans for a potential IPO of Regal, which it acquired for USD3.6 billion. It targets Wall Street for the possible float, pointing to US equity capital markets as the "largest and most liquid" in the world, as rationale for the move.

Another notable mid-cap gainer was outsourcer Capita, rising 1.2%. It is now up for six sessions in a row, and the stock is roughly 40% higher than it was last week Wednesday, just before it kicked off its win streak.

Convenience store operator McColl's Retail Group is 39% lower than it was at the end of last week, after losing a further 26% to 21.50p on Thursday.

It announced plans to raise GBP35 million through a placing and open offer at 20p per share. McColl's shares had dropped 16% on Monday after it said it was mulling an equity raise.

In addition, McColl's on Thursday said its pretax loss in the six months to May 30 widened annually to GBP5.9 million from GBP1.3 million. Revenue was 5.3% lower year-on-year at GBP572.7 million from GBP604.8 million.

The pound was quoted at USD1.3829 at the London equities close on Thursday, lower from USD1.3863 on Wednesday, despite encouraging domestic economic growth figures.

The UK economy rebounded sharply on an annual basis in June as the economy continued to reopen and the country pressed head with its mass-vaccination drive, the Office for National Statistics said.

In the three months to June, UK gross domestic product grew 4.8% quarter-on-quarter, following a contraction of 1.6% in the first quarter of 2021. The print was in line with market forecasts, cited by FXStreet.

For the month of June, UK GDP grew by 1.0% for a fifth consecutive month, but remained 2.2% below its pre-pandemic level. Still, the reading beating the market estimate of 0.8%.

Stocks in New York were mixed at the time of the equity market close in London, as the latest US producer price data brought inflationary fears to the fore once more.

The Dow Jones Industrial Average was down 0.3%, the S&P 500 was marginally lower, but the Nasdaq Composite rose 0.1%.

"If anyone was hoping that yesterday's CPI numbers might mark a possible high point for US inflationary pressure, today's US PPI numbers, threw a lot of shade on that belief," CMC Markets analyst Michael Hewson commented.

The US producer price index increased 1.0% month-on-month in July, the same pace as in June. The latest reading beat the market forecast, cited by FXStreet, of 0.5%.

On an annual basis, US producer prices rose by 7.8% in July, accelerating from June's 7.3% increase. The print also was higher than the market estimate that inflation would remain at 7.3%.

The euro was priced at USD1.1729 at the European equities close on Thursday, down from USD1.1737. Against the Japanese yen, the dollar was trading at JPY110.35, down from JPY110.47.

Brent oil was quoted at USD71.22 at late Thursday, up sharply from USD70.14 a barrel late Wednesday. Gold was trading at USD1,750.13 an ounce, higher against USD1,748.19.

Friday's economic calendar has French consumer price index data at 0745 BST, EU foreign trade figures at 1000 BST and US import and export price indexes at 1330 BST.

The local corporate calendar, meanwhile, has interim results from recently-listed Thungela Resources. Thermal coal producer Thungela was spun-out of Anglo American in June.

By Eric Cunha; ericcunha@alliancenews.com

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