LONDON MARKET CLOSE: Flat finish as miners, travel lift FTSE off lows

(Alliance News) - The FTSE 100 finished Monday's session flat, with the mining and airline sectors helping the blue-chip index recover from intraday lows.

With the number of new cases of Covid-19 reported each day in the UK falling for a fifth day straight, the mid-cap FTSE 250 outperformed at the start of the week, with cinema chain operator Cineworld and train ticketing platform Trainline rallying 5.4% and 5.2% respectively on pandemic recovery prospects.

The FTSE 100 index closed down just 2.15 points at 7,025.43, recovering after slipping below the 7,000 mark in morning trade on Monday.

The FTSE 250 ended up 49.80 points, or 0.2%, at 22,933.19, and the AIM All-Share closed up 1.14 points, or 0.1%, at 1,233.68.

The Cboe UK 100 ended down 0.1% at 699.56, the Cboe UK 250 closed up 0.4% at 20,653.94, and the Cboe Small Companies ended up 1.3% at 15,205.96.

"European stocks initially started the week on a softer note, largely due to a weak lead from Asia markets which fell back sharply as Chinese regulators continued their crackdown on the tech sector, as well as broadening their gaze towards the private education sector," said Michael Hewson, chief market analyst at CMC Markets.

However, the basic resource sector helped to pull the FTSE 100 off intraday lows, he noted.

Anglo American closed up 3.2% after subsidiary Anglo American Platinum reported a stellar first-half performance as revenue almost tripled on the back of a 29% increase in the platinum group metals basket price.

The blue-chip PGM miner reported pretax profit of ZAR64.84 billion - equivalent to around to GBP3.2 billion - in the six months to June 30, soaring from ZAR9.35 billion a year prior.

Amplats is an Anglo American subsidiary which has operations around the globe but mainly focuses on South Africa and Australia.

Miners were higher across the board on Monday, with Antofagasta rallying 4.1% after Deutsche Bank raised the Chilean miner to Hold from Sell. Glencore rose 3.3% and Rio Tinto advanced 3.1%.

BP shares gained 2.9% and Royal Dutch Shell 'A' and 'B' stock rose 2.6% and 2.5% respectively. Brent oil was quoted at USD73.99 a barrel at the London equities close Monday, up from USD73.64 late Friday.

Gold was quoted at USD1,799.56 an ounce at the London equities close Monday against USD1,800.34 at the close on Friday.

Another group higher on Monday were airlines, after budget carrier Ryanair commented on "pent-up travel demand". The stock ended 4.0% higher.

The Irish budget airline said traffic rebounded to 8.1 million in the three months to June 30 from 500,000 a year before, as capacity recovered in May and June. As a result, revenue nearly tripled in the quarter to EUR370.5 million from EUR125.2 million a year earlier.

However, the company's pretax loss widened to EUR324.5 million from EUR210.0 million year-on-year.

Ryanair said it believes that full-year traffic has improved to a range of 90 million to 100 million from the previously guided 80 million to 120 million passenger range, and the company said it expects that the likely outcome for the year to the end of March 2022 is "somewhere between a small loss and breakeven".

"We are seeing a strong rebound of pent-up travel demand into August and September, and we expect this to continue into the second half of FY22, with pre-Covid-19 growth planned to resume strongly in summer 2022," Ryanair said.

Ryanair's update lifted the sector, with British Airways parent International Consolidated Airlines rising 4.6% and easyJet closing up 3.9%. AIM-listed Jet2 surged 7.4%.

Also giving pandemic-battered stocks a lift was news that the number of new cases of Covid-19 reported each day in the UK has fallen for the fifth day in a row.

A total of 29,173 cases were reported by the government on Sunday, down from the 48,161 recorded a week ago on July 18. It is the fifth day in a row that the number of daily reported cases has dropped, with average daily cases down 15% week on week.

Towards the bottom of the FTSE 100 was B&M European Value Retail, ending down 2.4% after RBC cut the discount retailer to Sector Perform from Outperform.

The picture in mainland Europe was mixed at the start of the week, with the CAC 40 in Paris ending up 0.2% but the DAX 30 in Frankfurt down 0.3%.

Germany's DAX underperformed after the Ifo Institute's business climate index for the country fell to 100.8 points in July from 101.7 points in June. Companies surveyed evaluated their current business situations as "somewhat better", but their expectations for the coming months were significantly less optimistic.

Ifo noted that supply bottlenecks and concerns over newly rising infection numbers are weighing on the German economy.

Nonetheless, the euro gained to stand at USD1.1809 at the European equities close Monday, against USD1.1763 at the same time on Friday.

The dollar was weak against other major currency pairings, such as the pound and Japanese yen, ahead of this week's US Federal Reserve decision.

The pound was quoted at USD1.3820 at the London equities close Monday, higher compared to USD1.3754 at the close on Friday. Against the yen, the dollar was trading at JPY110.31, falling from JPY110.53 late Friday.

The US Fed, after a more hawkish than expected meeting in June, begins its two-day meeting on Tuesday, announcing its latest monetary policy decision on Wednesday.

"Any major reconfiguring of its position is unlikely ahead of the Jackson Hole symposium in August, but dollar bulls might find slim pickings in the meeting given the broad uncertainty that characterises the US recovery at present," said Chris Beauchamp, chief market analyst at IG.

Also in focus in the US this week is another raft of earnings, this time from the tech sector. Kicking things off is electric car maker Tesla after the New York market close on Monday, followed by a bumper Tuesday with earnings from iPhone maker Apple, Google parent Alphabet and software firm Microsoft. Wednesday sees Facebook report and Amazon's turn comes on Thursday.

Stocks in New York were subdued at the London equities close, with the DJIA flat, the S&P 500 index up 0.1%, and the Nasdaq Composite flat.

A busy UK corporate calendar on Tuesday has half-year results from consumer goods firm Reckitt Benckiser, specialty chemicals company Croda and public transport operator National Express. Full-year results are due from Games Workshop, Moonpig and FirstGroup.

The international economics calendar has US durable goods at 1330 BST.

By Lucy Heming; lucyheming@alliancenews.com

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