LONDON MARKET MIDDAY: FTSE 100 Sinks As Ex-Dividend Shares Drag

(Alliance News) - The London equities market was struggling to find its groove at midday on Thursday, as ex-dividend shares weighed on the FTSE 100 index, while investors await US jobless claims figures this afternoon and agreement on a stimulus package for the world's largest economy.

In London, the blue-chip FTSE 100 index was down 58.79 points, or 0.9%, at 6,221.33. The mid-cap FTSE 250 index was down 59.32 points, or 0.3% at 18,030.72. The AIM All-Share index was up 0.2% at 956.60.

The Cboe UK 100 index was down 1.2% at 619.69. The Cboe 250 was flat at 15,435.68, and the Cboe Small Companies was up 0.9% at 9,525.65.

In mainland Europe, the CAC 40 index in Paris was down 0.2%, while the DAX 30 in Frankfurt was down 0.1%.

"A combination of some big stocks trading without the rights to their dividend and a bit of profit-taking after a strong run for equities so far in August saw the FTSE 100 on the back foot on Thursday morning. The index was still north of the 6,200 mark as investors awaited the latest unemployment figures from the US later," said AJ Bell's Russ Mould.

In the FTSE 100, Just Eat Takeaway.com was up 1.3%, adding to a 3.7% rise on Wednesday after a well-received set of interim results.

At the other end of the FTSE 100, a handful of shares traded ex-dividend. Phoenix Group was down 4.1%, Legal & General 2.5%, Aviva also 2.5%, GlaxoSmithKline 2.4%, Royal Dutch Shell 'A' shares down 2.5% and Shell 'B' down 2.4%.

In the mid-cap FTSE 250, Watches of Switzerland was up 19% after the luxury timepiece retailer said it delivered a strong performance in its maiden year as a public company.

The company reported revenue was up 6% to GBP819.3 million for the financial year ended April 26, from GBP797.7 million in financial 2019, and adjusted pretax profit was GBP49.4 million, up 86% from GBP26.5 million.

Going into financial 2021, Watches of Switzerland said it remained positive expecting revenue in a range between GBP840 million to GBP860 million, on the basis of a continued strong luxury watch market in the UK and US.

Revenue expectations also come as the firm slowly grows sale revenue as stores re-open, up 7.4% in July versus a year ago, climbing on a 83% drop in May.

National Express was down 12% as the bus and train operator swung to a bruising loss during its first-half. The company recorded pretax loss swung to GBP122.2 million in the six months to June 30 from a GBP88.4 million profit a year earlier. While revenue dropped 23% to GBP1.03 billion from GBP1.34 billion.

There was no interim dividend, as previously guided, following a 5.16p payout a year ago. There is also no annual profit guidance, due to Covid-19 uncertainty.

Dignity shares were up 42%. The funeral services provider said the industry would "benefit" from having a regulator after the UK competition watchdog found that fees for funerals and cremations have surged in excess of inflation over the past 10 years.

The Competition & Markets Authority back in March of last year set out to investigate concerns it had over the funeral sector. The probe found that because of the "inherent emotional distress", people are less likely to compare prices among funeral providers.

"The CMA has provisionally decided that, in the short term, it will require all funeral directors and crematoria to provide customers with information on, and the prices of, the various services and packages they offer. This will go a long way to ensuring people have easily accessible information on services and costs to help them decide which type of funeral arrangement they require," the regulator said.

New York was pointed for a lower open, as Democrats and Republicans continued to point the finger as to why a US stimulus package cannot be agreed.

The Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite were seen down 0.1%, based on futures trading.

Investors are hopeful that Congress will eventually agree on a new pandemic deal despite long-running animosity between Democrats and Republicans.

However, both sides are blaming each other for the lack of progress, with Treasury Secretary Steven Mnuchin saying House Leader Nancy Pelosi would not budge unless the Democrats' demand for spending of at least USD2 trillion is met.

That is well down from the USD3.5 trillion initially proposed by Democrats but Republicans say they are unwilling to shift from their USD1 trillion plan.

The pound was quoted at USD1.3101 Thursday at midday, up from USD1.3044 Wednesday's equities close in London.

The euro was priced at USD1.1844, up from USD1.1794. Against the yen, the dollar was quoted at JPY106.81, soft from JPY106.94 in London.

"In FX the dollar was weaker across the board losing against both euro and cable. With little progress on the negotiations in Washington DC, the bulls may be running out of excuses to take risk assets higher while the buck may be seeing a mild outflow of capital offer as investors remain uncertain about the US economic future," explained analysts at BK Asset Management.

Brent oil was trading at USD45.34 a barrel Thursday midday, firm from USD45.26 a barrel Wednesday evening. Gold was quoted at USD1,930.52 an ounce, lower from USD1,948.50 an ounce at the close Wednesday.

By Arvind Bhunjun, arvindbhunjun@alliancenews.com; and Neetika Kurup, neetikakurup@alliancenews.com

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