LONDON MARKET OPEN: Kingfisher rises as lockdown DIY boom continues

(Alliance News) - Stock prices in London opened lower on Monday as shares in travel companies took a hit on the slow vaccination rollout in Europe, while DIY retailer Kingfisher bucked the trend after reporting strong annual results.

Investors grew more concerned about Europe, where the vaccination programme has stuttered and a hike in new cases has forced countries including France and Germany to reimpose lockdowns.

UK Prime Minister Boris Johnson Boris Johnson is expected to ask European leaders this week to dismiss any proposals to block coronavirus vaccine exports to the UK.

European Commission President Ursula von der Leyen has ramped up the rhetoric this weekend, saying the EU has the power to "forbid" exports, adding: "That is the message to AstraZeneca."

The warning reflects growing frustration on the continent that the EU is not getting the supplies it expected from the Anglo-Swedish drug manufacturer.

The UK PM is expected to contact his EU counterparts ahead of virtual summit on Thursday where European leaders are due to consider the matter, The Financial Times reported.

AstraZeneca was up 1.2% after it said early Monday the US phase III trial of its AZD1222 vaccine - co-invented with the University of Oxford - demonstrated statistically significant vaccine efficacy of 79% at preventing symptomatic Covid-19 and 100% efficacy at preventing severe disease and hospitalisation.

AstraZeneca said interim safety and efficacy analysis was based on 32,449 participants accruing 141 symptomatic cases of Covid-19. The trial had a 2:1 randomisation of vaccine to placebo. Vaccine efficacy was consistent across ethnicity and age. Notably, in participants aged 65 years and over, vaccine efficacy was 80%, it added.

AstraZeneca said it will continue to analyse the data and prepare for the primary analysis to be submitted to the US Food & Drug Administration for Emergency Use Authorization in the coming weeks.

The FTSE 100 index was down 50.66 points, or 0.8%, at 6,658.05. The mid-cap FTSE 250 index was down 102.19 points, or 0.5%, at 21,318.12. The AIM All-Share index was 0.2% higher at 1,199.72.

The Cboe UK 100 index was down 1.0% at 663.32. The Cboe 250 was down 0.9% at 18,978.66, and the Cboe Small Companies down 0.1% at 13,877.44.

In mainland Europe, the CAC 40 in Paris was 0.8% lower, while the DAX 30 in Frankfurt was down 0.5%.

In the FTSE 100, Kingfisher was the best blue-chip performer, up 2.5%. The DIY retailer hailed a strong annual performance as the pursuit of home improvement projects continued throughout the year.

For the financial year that ended January 31, revenue was up 7.2% at GBP12.34 billion from GBP11.51 billion a year before, while pretax profit multiplied to GBP756 million from GBP103 million.

Kingfisher declared a total dividend of 8.25 pence, having skipped payouts in financial 2020 due to the Covid-19 pandemic.

Looking ahead, Kingfisher said the new financial year has started positively, with first quarter like-for-like sales to March 18 up 24%, reflecting strong demand in the UK and France.

Adam Vettese, analyst at eToro, said: "Europe's rekindled love for DIY shows no sign of abating, with Kingfisher posting yet another strong set of results. It's rare these days to see a company in such a strong position financially and it's clear the B&Q owner has benefited greatly from people being forced to stay home."

Rightmove was up 1.6% after UBS raised the property portal to Buy from Neutral.

At the other end of the large-cap index, International Consolidated Airlines was the worst performer, down 7.1%, after Deutsche Bank downgraded the British Airways parent to Hold from Buy.

Travel stocks were lower across the board as the spat between the UK and Europe continued and amid fears the crucial summer holiday season has been put under threat by the slow vaccine rollout on the continent.

In the FTSE 250, budget airline easyJet was the worst performer, down 8.5%, Anglo-German tour operator Tui was off 6.2%, while Hungarian airline Wizz Air was 4.7% lower. In addition, Irish carrier Ryanair was 7.0% lower.

In Asia, the Japanese Nikkei 225 index finished down 2.1% on Monday. In China, the Shanghai Composite ended up 1.1%, while the Hang Seng index in Hong Kong closed 0.2% lower.

The pound was quoted at USD1.3850 early Monday, down from USD1.3874 at the London equities market close on Friday.

The euro was priced at USD1.1885, lower from USD1.1901. Against the yen, the dollar was trading at JPY108.70, down from JPY108.86.

Brent oil was quoted at USD63.82 a barrel Monday morning, down from USD64.07 at the London equities close on Friday. Gold was trading at USD1,730.57 an ounce, down from USD1,739.97.

Monday's economic calendar has eurozone current account data at 0900 GMT.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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