LONDON MARKET CLOSE: FTSE 100 in upbeat start to week; pound softens

(Alliance News) - The FTSE 100 started a calmer week on the front foot, boosted by a softer pound and share price gains for Scottish Mortgage Investment Trust, Kingfisher and AstraZeneca.

The FTSE 100 index closed up 17.39 points, or 0.3%, at 6,726.10. The FTSE 250 ended up 35.58 points, or 0.2%, at 21,455.89, and the AIM All-Share closed up 5.24 points, or 0.4%, at 1,202.96.

The Cboe UK 100 ended up 0.1% at 670.40, the Cboe UK 250 closed down 0.2% at 19,101.31, and the Cboe Small Companies ended down 0.6% at 13,819.76.

"Traders are taking their cues from the bond market, yields have edged lower, and that has paved the way for equities to move higher. Stocks suffered towards the end of last week due to higher bond yields, tech stocks lost the most ground, but now the situations have been reversed," said David Madden at CMC Markets.

London's FTSE 100 was also helped by a weaker pound on Monday.

The pound was quoted at USD1.3860 at the London equities close, down compared to USD1.3874 at the close on Friday.

Sterling pulled back at the start of the week after EU Chief Ursula von der Leyen on Saturday again threatened to impose an export ban on the AstraZeneca vaccine unless the company delivers more of the 90 million doses it agreed to supply in the first quarter of 2021.

However, UK Prime Minister Boris Johnson said Monday he was "reassured" EU leaders do not want blockades on vaccine exports, while Ireland's leader warned a threatened ban would be "very retrograde".

Britain has urged the EU not to halt exports of AstraZeneca's Covid-19 vaccine in response to a shortfall in deliveries to the bloc from the Anglo-Swedish firm. The cross-Channel row is increasingly focused on a factory in the Netherlands set to produce future supplies of the AstraZeneca jab but still awaiting official approval, according to EU and UK sources.

While Europe's vaccine drive has lagged – and some parts of the continent are now seeing a fresh surge in infections – Britain has vaccinated more than half of its adult population with at least one dose.

Despite the export row and supply issues already forecast for next month, Johnson said his government would "just bash on with the roadmap that we've set out". However, he warned the wave of new cases currently affecting continental Europe would likely hit Britain as well.

Experts have already cautioned there could be a third wave of Covid-19 infections in the UK and advised people not to consider overseas holidays when restrictions ease later this year.

The infectious disease expert Tildesley told BBC Radio 4's Today programme: "I think that international travel this summer is, for the average holidaymaker, sadly I think, extremely unlikely.

British Airways parent International Consolidated Airlines ended as the worst blue-chip performer in London on Monday, down 5.2%. The airline - as well as jet engine maker Rolls-Royce, which shed 4.4% on Monday and budget carrier easyJet, which fell 5.4% - was hit by concerns over increasing coronavirus cases in Europe. Additionally, IAG was downgraded to Hold from Buy by Deutsche Bank.

At the top of the FTSE 100 was Scottish Mortgage Investment Trust, gaining 4.5% as tech stocks gained in New York. Scottish Mortgage holds investments in tech stocks such as Amazon.com and Tesla.

Stocks in New York were in the green at the London equities close, with the DJIA up 0.2%, the S&P 500 index up 0.8%, and the tech-laden Nasdaq Composite surging 1.5%.

In European equities on Monday, the CAC 40 in Paris ended down 0.5%, while the DAX 30 in Frankfurt ended up 0.3%. The euro stood at USD1.1936 at the European equities close Monday, up against USD1.1901 at the same time on Friday.

In the currency space, the Turkish lira crashed on Monday after President Recep Tayyip Erdogan removed another central bank governor after only a few months in the job. The dollar traded at TRY7.79 at the London equities close, up from TRY7.23 at the same time on Friday.

According to the Anadolu news agency, the new head of the central bank will be Sahap Kavcioglu, a former member of Erdogan's ruling party, the AKP. The decision comes just a few days after the Turkish central bank raised the key interest rate by two points to 19%.

Safe havens were mixed on Monday. The Japanese yen was stronger, as dollar traded at JPY108.69, lower than JPY108.86 late Friday. Meanwhile, gold was soft at USD1,738.99 an ounce at the London equities close Monday from USD1,739.97.

Brent oil was quoted at USD64.21 a barrel at the London equities close Monday, a touch higher from USD64.07 late Friday.

Back in London, Kingfisher shares rose 3.6% after the DIY retailer resumed its final payout for its recently ended financial year, as profit jumped on high demand for home improvement products.

For the year to the end January 31, pretax profit rose sixfold to GBP756 million from GBP103 million the year before, as the prior year suffered one-off costs of GBP441 million, relating to store closures and impairments from revision to the future projection from several stores across the group's portfolio.

On an adjusted basis, the B&Q and Screwfix operator's pretax profit rose 44% to GBP786 million from GBP544 million the year before, as revenue grew 7.2% year-on-year on a reported basis to GBP12.34 billion from GBP11.51 billion. On a constant currency basis, revenue was up 6.8%.

AstraZeneca shares rose 3.3% on Monday. Amidst the firm's tiff with the EU, it received some positive trial results from a US-led study which showed its vaccine is 100% effective against severe Covid-19 and at keeping people out of hospital with severe illness.

The FTSE 100-listed drug maker said data from a US-led trial showed that its AZD1222 Covid-19 vaccine has a 79% efficacy rate of preventing symptomatic Covid-19. Notably, the vaccine had an efficacy rate of 80% in participants aged 65 years and over, who are generally more vulnerable to the disease.

In addition, the independent data safety monitoring board conducted a specific review of thrombotic events, or blood clotting, as well as cerebral venous sinus thrombosis, and identified no safety concerns related to the vaccine.

In other company news, Deliveroo said it will be worth just under GBP9 billion on admission to the London Main Market, as the company edges closer to its float and continues to see increased demand for its takeaway food delivery service.

Deliveroo will price its initial public offering between GBP3.90 and GBP4.60 per share. This would imply a market capitalisation between GBP7.6 billion and GBP8.8 billion and, even at the low end of this range, the company would comfortably slip into the FTSE 100 in the next quarterly index review.

Among existing investors selling shares is Founder & Chief Executive Will Shu, Sky News reported on Monday. Shu will sell some of his 6.2% stake in the company he founded. Sky News said the sale could be worth GBP500 million.

Deliveroo last week confirmed it will have two share classes. The A class will be offered in the IPO while the B class will be solely held by Shu. Each of Shu's B shares will have 20 votes, while A shares each will have one.

The UK corporate calendar for Tuesday has results from financial services firm Old Mutual, speciality chemicals firm Elementis and convenience store chain McColl's Retail.

The economic calendar on Tuesday has UK labour market data at 0700 GMT.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.