LONDON MARKET OPEN: Housebuilders rise as Crest Nicholson ups outlook

(Alliance News) - Stock prices in London were lower early Tuesday as Germany announced stay-at-home orders to combat a fresh wave of Covid-19 infections, while UK housebuilders were higher after a positive update from Crest Nicholson.

Investor sentiment was dealt a blow after Germany said Tuesday it will impose a strict lockdown for five days over Easter as Covid-19 infections spiral "exponentially", while a row over exports of the AstraZeneca vaccine continues in Europe.

The FTSE 100 index was down 38.29 points, or 0.6%, at 6,687.81. The mid-cap FTSE 250 index was down 90.65 points, or 0.4%, at 21,365.24. The AIM All-Share index was 0.5% lower at 1,197.43.

The Cboe UK 100 index was down 0.6% at 666.32. The Cboe 250 was down 0.5% at 19,009.66, and the Cboe Small Companies down 0.1% at 13,814.44.

In mainland Europe, the CAC 40 in Paris was 0.5% lower, while the DAX 30 in Frankfurt was down 0.7%.

The Japanese Nikkei 225 index ended down 0.6% on Tuesday. In China, the Shanghai Composite closed down 0.9%, while the Hang Seng index in Hong Kong finished down 1.3%.

"European markets open in a risk-averse mode with Bunds rallying and the euro down. News has once again been negative with Germany announcing a hard lockdown for Easter and Asian stock markets struggling," noted Axi's Stephen Innes.

Chancellor Angela Merkel ordered the harsh nationwide measures after marathon talks with regional leaders, warning a potent strain of coronavirus was raging through the EU's most populous country.

"The situation is serious," Merkel said. "Case numbers are rising exponentially and intensive care beds are filling up again."

A variant first identified in the UK has become the dominant strain circulating in Germany, the under-pressure leader said, adding that "we are in a new pandemic".

Drugmaker AstraZeneca said Monday that US trials showed its drug was 100% effective in preventing severe disease.

However, a spat is simmering between the UK and the EU over much-needed supplies of the jab, which is cheaper and easier to store than many of its rivals. European officials are furious that the Anglo-Swedish firm has been able to deliver its UK contract in full, while falling short on its supplies to the EU.

AstraZeneca shares were 0.8% lower.

Merkel on Tuesday threw her weight behind the bloc, which has threatened to ban AstraZeneca vaccines produced in the bloc from being exported unless it delivers more of the 90 million doses it agreed to supply in the first quarter of 2021.

In the FTSE 100, Bunzl was up 0.8% after RBC Capital upgraded the distribution firm to Sector Perform from Underperform.

CRH was up 0.5%. The Irish building materials firm said it has promoted Jim Mintern to the role of group finance director-designate. Mintern will assume the role on June 1 following the retirement of Senan Murphy. Mintern is an executive vice president of CRH and a member of the company's global leadership team. He has most recently been chief of staff to Chief Executive Officer Albert Manifold.

At the other end of the large-caps, Kingfisher was the worst performer, down 2.8%, after Goldman Sachs downgraded the DIY retailer to Neutral from Buy. The B&Q chain owner on Monday reported a surge in annual profit as millions of people stuck at home took on home improvement projects during lockdown.

Travel and travel-related stocks were once again lower on fears the return of summer holidays will not come to fruition, with International Consolidated Airlines 2.6% lower. In the FTSE 250, travel concessions operator SSP was worst performer, down 5.5%, budget airline easyJet as off 4.1% and cruise line operator was down 4.0%.

Bucking the broader market trend, Crest Nicholson was the best mid-cap performer up 3.4%. he housebuilder it has continued to deliver a good trading performance in financial 2021, supported by UK government measures to prop up the housing market.

Crest told its annual general meeting on Tuesday that, as of 22 March, the order book is over 70% covered for 2021, up from 55% as reported with its annual results in January. This includes sales that will legally complete after the end of Help to Buy phase 1 and the Stamp Duty holiday extension, further highlighting customers' confidence in the market, it noted.

The Chertsey, Surrey-based housebuilder said that, in light of the good trading performance and the continued strategic progress, it now expects financial 2021 adjusted pretax profit to be around GBP85 million - 14% ahead of current analyst consensus of GBP74.3million.

Large-cap peers, Barratt Developments, Taylor Wimpey and Persimmon were up 1.3%, 0.9% and 0.8% respectively.

The dollar was higher against counterparts as investors flocked to the greenback's safe-have allure. The pound was quoted at USD1.3824 early Tuesday, down from USD1.3860 at the London equities close Monday.

The euro was priced at USD1.1901, lower from USD1.1936. Against the yen, the dollar was trading at JPY108.77, up from JPY108.69.

Brent oil was quoted at USD63.89 a barrel Tuesday morning, down from USD64.21 a barrel at the London equities close Monday. Gold was priced at USD1,737.71 an ounce, little changed from USD1,738.99.

In the economic events calendar, focus will be on Congressional testimony by US Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen later on Tuesday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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