LONDON MARKET CLOSE: FTSE 100 outperforms and FTSE 250 hits record

(Alliance News) - Stocks were on the rise on in London on Thursday, with the blue chip index surging towards 7,000 - a mark not seen since before the pandemic - and the midcaps hit a record close.

CMC Markets Chief Market Analyst Michael Hewson said: "The FTSE 100 has maintained its recent resilience and outperformance, closing at its highest level this year, and its best level since February 26 last year, while the FTSE 250 has also closed at a new record high. While other major indices have led the way in posting record highs in recent weeks, UK stocks appear to be finally finding favour with investors as an economic reopening beckons, even though the FTSE100 still has a lot of ground to make up, before it has reversed its losses from last year's peaks of 7,689."

The FTSE 100 index closed up 56.90 points, or 0.8%, at 6,942.22 on Thursday, its highest level in over a year.

The mid-cap FTSE 250 was gained 86.97 points or 0.4%, closing at 22,247.54. The AIM All-Share index advanced 0.8% at 1,239.04.

The Cboe UK 100 index closed up 0.6% at 690.87. The Cboe 250 ended 0.1% higher at 19,842.39. The Cboe Small Companies ended up 0.7% at 14,224.80.

"The main laggards today have been travel and leisure stocks, somewhat surprisingly given all of the optimism surrounding the lifting of lockdown restrictions, with EasyJet, Wizz Air and Carnival slipping from their recent peaks," Hewson continued.

EasyJet lost 2.8% on Thursday, Wizz Air 2.5% and Carnival 4.4%.

He added: "One reason behind today's weakness in this sector could be concerns about possible delays in the UK being able to complete its vaccination program on schedule, and a delay to the May 17 overseas travel deadline, given the change of advice with respect to vaccinating the under 30's cohort."

UK Health Secretary Matt Hancock and chief scientists are seeking to maintain public confidence in the Oxford-AstraZeneca vaccine after regulators pointed to a one in a million chance of dying from a rare blood clot.

Hancock said everyone should take a vaccine when their time comes, and the risk of experiencing a brain clot was the same as "taking a long-haul flight".

He urged the under-30s, who will be offered an alternative vaccine to AstraZeneca, to take a jab to protect loved ones and avoid the risk of long Covid, adding there were plentiful supplies of Moderna and Pfizer for this age range.

Astra added 2.0% on Thursday.

In a round of broadcast interviews, Hancock said vaccines are clearly breaking the link between Covid cases and deaths in the UK and were saving "thousands of lives".

He told Sky News: "The number of people dying from Covid halved in the last nine days...and is down 90% from the peak."

All vaccines in use in the UK were "safe for all ages", but the "extremely rare" risk of suffering a rare brain blood clot, and the tipping of the balance of risk for the under-30s, means they could be given other jabs instead.

SpreadEx analyst Connor Campbell said: "The FTSE's gains have been predicated on the promise of an aggressive post-covid recovery. However, danger lurks. So far, any vaccine concerns – be it about the use of the Oxford jab on under-30s or the warnings that the vaccination programme may be about to slow down - have been localised to the pound. If these worries spread to the FTSE, it could quickly find itself backing off its 13-month highs."

The pound was quoted at USD1.3739 at the close on Thursday, down from USD1.3747 at the London equities close on Wednesday, amid concerns over the UK's vaccine rollout.

The euro was priced at USD1.1903, up from USD1.1891. Against the yen, the dollar was trading at JPY109.25, down from JPY109.72.

In London, Johnson Matthey gained 1.5%, after the speciality chemicals company said its financial 2021 operating performance is expected to be around the top end of market expectations.

The company said following disruption from Covid-19, its second half was materially stronger. Johnson Matthey attributed the performance to increased activity in autos and other key end markets and actions taken to transform its operations, including tight cost management.

Further, its strong operational performance has enabled continued investment into strategic growth projects. Johnson Matthey said it continues to review its portfolio to focus on areas to maximise value for shareholders. As part of that process, the company is undertaking a strategic review of its Health business.

In the Clean Air division, Johnson Matthey said there was a strong recovery in demand across all regions towards the end of the first half following a period of disruption caused by the coronavirus pandemic.

Mining giant Anglo American advanced 3.2% after it announced the demerger of its South African thermal coal operations via the transfer to new holding company Thungela Resources.

The demerger comes as the global mining behemoth pursues a "responsible transition" away from thermal coal. The proposal will also allow Thungela to attract new shareholders and to access new sources of capital as an independent company offering direct exposure to thermal coal, Anglo added.

Sage Group gained 4.1% after Citigroup upgraded the accounting software provider to Buy from Neutral.

Holding the blue chip rally back, London's oil majors were struggling on lacklustre oil prices.

Royal Dutch Shell 'A' shares gave back 2.2%, while the 'B' shares lost 2.0% and peer BP lost 2.3%.

CMC's Hewson said: "Yesterday's weekly inventory data, which showed a surprise rise in US gasoline stockpiles appears to be limiting the upside for crude oil prices in the short term, with USD64 acting as a bit of a top. We do have fairly solid support down near USD60 and the March lows."

Brent oil was quoted at USD62.89 a barrel on Thursday at midday, up from USD62.08 late Wednesday in London.

In the midcaps, Dunelm added 2.5%. The home furnishings retailer said though quarterly sales fell overall, digital sales more than trebled.

For the third quarter to March 27, total sales were GBP236.6 million, down 17% from GBP284.4 million at the same time last year as the majority of the retailer's store estate was shuttered in the period due to Covid-19 restrictions.

However digital sales - which includes click & collect and home delivery - surged to make up 92.4% of total sales from 22.5% a year before.

On AIM, ASOS lost 3.4%, surrendering earlier gains. The online fashion retailer said its first half sales rose by almost a quarter, as it hailed its acquisition of Arcadia's assets, but was cautious over its near-term prospects as lockdown measures ease.

In the six months to February 28, revenue rose 24% to GBP1.98 billion from GBP1.60 billion a year earlier. The measure includes other items such as delivery receipts and third party revenue. Retail sales alone were 24% higher at GBP1.92 billion from GBP1.55 billion.

Its profit also surged. ASOS recorded a pretax profit of GBP106.4 million, from GBP30.1 million a year earlier. Adjusted pretax profit, so not including one-off costs related to its Topshop deal, came in at GBP112.9 million.

ASOS said it is "well-positioned" though it is "retaining caution on near term consumer outlook" due to the timing of Covid-19 restrictions being lifted, as well as the possibility of future peaks of the virus.

In mainland Europe, the CAC 40 index in Paris advanced 0.6% and the DAX 30 in Frankfurt ended 0.2% higher.

In the US, Wall Street was searching for direction, with the Dow Jones Industrial Average flat, the S&P 500 up 0.3% and the Nasdaq Composite up 0.9%.

Gold was trading at USD1,754.40 an ounce, higher against USD1,739.40.

In the international economic calendar on Friday, there is a China consumer price index print overnight, while German trade balance and industrial production is at 0700 BST, French industrial output at 0745 BST, with UK Halifax house prices at 0830 BST and US producer price index at 1330 BST.

The UK corporate calendar has no events scheduled on Friday.

By Paul McGowan; paulmcgowan@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.