LONDON MARKET MIDDAY: FTSE Down But Europe Up As Trump Pledges Exit

Thu, 07th Jan 2021 12:10

(Alliance News) - Stock prices in mainland Europe were in positive territory on Thursday afternoon, though London's FTSE 100 had slipped into the red by midday after starting the day higher, giving back some of what has been a fruitful first week of 2021 for the large-cap benchmark.

Travel and banking stocks weighed on the UK's blue-chip index, while its European counterparts shrugged off a dramatic Wednesday evening of unrest in the US that saw 52 people arrested and four killed as masses of angry pro-Trump protesters stormed the Capitol.

On Thursday morning, US President Donald Trump offered the clearest signal yet that he will voluntarily leave office on January 20, saying there will be an "orderly transition" to Joe Biden's presidency.

"Investors kept a cool head despite chaotic scenes from Washington DC overnight. US President Trump never really had a chance of overturning the election results, but after last night's events, more top Republicans are likely to turn their back on the outgoing president," Axi analyst Milan Cutkovic said.

The FTSE 100 index was down 24.06 points, or 0.4%, at 6,817.80 midday on Thursday. The large-cap index has risen 5.5% so far in 2021.

The mid-cap FTSE 250 index was down 65.82 points, or 0.3%, at 20,907.34. The AIM All-Share index was down 0.3% at 1,169.15.

The Cboe UK 100 index was down 0.6% at 678.82 points. The Cboe 250 was off 0.3% to 18,237.94, and the Cboe Small Companies was fractionally lower at 11,920.32.

On the continent, the CAC 40 stock index in Paris was up 0.2% and Frankfurt's DAX 30 up 0.4%.

On the London Stock Exchange, banking stocks gave up some of their strong gains from Wednesday.

HSBC was down 1.7%, Barclays fell 1.9% and NatWest lost 1.4%. On Wednesday, the trio had closed up 9.9%, 8.3% and 6.6%.

Travel stocks, meanwhile, were hurt after Irish carrier Ryanair cut its annual traffic forecast in the wake of new Covid-19 restrictions in the UK and Ireland.

Ryanair now expects traffic for the year ending March of between 26 million and 30 million, its guidance reduced from the previous forecast of "below 35 million".

Ryanair expects its January traffic to fall to below 1.25 million passengers and Covid-19 restrictions could mean it may only carry 500,000 customers in each of February and March.

Shares in the Irish airline fell 2.8%. International Consolidated Airlines Group, parent of British Airways and Ireland's Aer Lingus, shed 2.9%.

Jet engine maker Rolls-Royce fell 2.0%. Intercontinental Hotels Group and Whitbread shed 2.6% and 1.5%, respectively. Mid-cap Ryanair peer easyJet fell 3.6%.

An angry Ryanair also called on the UK and Ireland to speed up their vaccination programmes. Ryanair particularly hit out at Ireland, which it said has vaccinated just 4,000 people, ten times fewer than Denmark, a population of a similar size.

J Sainsbury topped London large-cap risers, up 4.4%, after reporting impressive trading over the festive period.

Sainsbury's said like-for-like sales in the nine weeks to January 2 - so including the key festive period - were up 9.3% year-on-year.

For the whole of its third-quarter, like-for-like sales, excluding fuel, climbed 8.6%. Including fuel, like-for-like sales were up a more modest 3.2%.

For its financial year ending March, Sainsbury's expects underlying pretax profit of at least GBP330 million, meaning a potential 44% fall from GBP586 million in financial 2020 but beating previous expectations for at least GBP270 million, as announced in early December.

BT Group and Vodafone were up 2.2% and 0.9% after the UK telecommunications regulator confirmed the list of companies due to take part in the upcoming spectrum auction.

BT's EE Ltd business, CK Hutchison Holdings Ltd's Hutchison 3G UK Ltd, Telefonica UK Ltd, and Vodafone Ltd had qualified to take part in the auction.

As of Thursday, they are now established bidders in the auction to release airwaves in the 700 megahertz and 3.6 to 3.8 gigahertz bands.

Telefonica shares were up 0.6% in Madrid.

The pound was quoted at USD1.3584 midday Thursday in London, improved from USD1.3570 at the LSE close on Wednesday.

Global health leaders have called for "robust evidence" to be provided for any widening of the gap between coronavirus vaccine doses. The World Health Organisation has said the second dose of the Pfizer/BioNTech jab should only be delayed for up to six weeks.

But experts in the UK said that the second jab can be delayed for up to 12 weeks in a bid to get more people vaccinated sooner.

Siddhartha Sankar Datta, regional advisor on vaccine-preventable diseases and immunisation with WHO in Europe, said countries lengthening the time between doses should make "robust evidence" available to support their decisions.

The euro stood at USD1.2262, down from USD1.2275 at the European equities close on Wednesday.

The eurozone stayed in deflationary territory in December, according to Eurostat estimates, and separate data on Thursday showed the single-currency area's retail sales tumbled in November.

According to preliminary data from Eurostat, consumer prices in the euro area fell 0.3% annually in December. Though in line with November's decline, just a 0.2% slip was expected, according to market forecasts cited by FXStreet. The final December CPI data will be published on January 20.

November's retail sales in the eurozone plunged to a greater extent than expected in November. Month-to-month, retail sales fell 6.1% in the eurozone, following a 1.4% rise in October. FXStreet cited consensus forecast just a 3.4% monthly decline in November.

Against the yen, the dollar was trading at JPY103.64, up from JPY103.37 at the London equities close on Wednesday.

The US economic calendar on Thursday has the latest jobless claims figures at 1330 GMT.

"The reading is expected to show that 88,000 jobs were added last month, and that would be a huge fall from the 307,000 created in the last report. Lately, there have been some concerns that the economic recovery in the US is running out of steam and a weak reading would probably compound those fears," CMC Markets analyst David Madden said.

Stock market futures in New York were higher ahead of the jobs data. The Dow Jones Industrial Average was called up 0.2% and the S&P 500 up 0.4%, adding to gains of 1.4% and 0.6% on Wednesday.

The Nasdaq Composite was called up 0.6%, with the tech-heavy index set to essentially recoup all of Wednesday's 0.6% decline.

Declines in technology behemoths weighed on the Nasdaq barometer, amid fears that tougher antitrust rules and taxation for the tech sector now are more likely after Biden's Democrats captured both chambers of Congress.

Apple shares were 1.0% higher in pre-market trade, Amazon's stock was up 0.5%. The duo closed down 3.3% and 2.5% on Wednesday.

Brent oil was quoted at USD54.20 a barrel on midday Thursday, a touch lower from USD54.22 at the London equities close on Wednesday.

Gold fetched USD1,918.83 an ounce, improved from USD1,907.65.

By Eric Cunha; ericcunha@alliancenews.com