LONDON MARKET OPEN: Stocks Fall After Strong Rally; Whitbread Sinks

(Alliance News) - Stocks in London opened lower on Tuesday as investors locked in profits, while cautiously assessing the impact of the coronavirus on the global economy.

The US is still "knee-deep" in its first wave of coronavirus infections and must act immediately to tackle the recent surge, the country's top infectious diseases expert said Monday.

Anthony Fauci said the number of cases had never reached a satisfactory baseline before the current resurgence, which officials have warned risks overwhelming hospitals in the country's south and west. The death toll from the virus in the US hit 130,000 Monday, according to a tally by Johns Hopkins University, and the number of infections is nearing three million.

The FTSE 100 index was down 45.30 points, or 0.7%, at 6,240.64. The flagship index closed up 128.64 points, or 2.1%, at 6,285.94 on Monday.

The mid-cap FTSE 250 index was down 60.96 points, or 0.4%, at 17,489.07. The AIM All-Share index was down 0.1% at 889.74.

The Cboe UK 100 index was down 0.8% at 621.44. The Cboe 250 was down 0.2% at 14,901.10, and the Cboe Small Companies was flat at 9,369.59.

In mainland Europe, the CAC 40 in Paris was down 0.9%, while the DAX 30 in Frankfurt was down 1.0%.

On the London Stock Exchange, JD Sports Fashion was the best blue-chip performer, up 3.0% after the sportswear retailer reported a record rise in annual profit.

For the 52 weeks ended February 1, the company's revenue increased 30% to GBP6.11 billion from GBP4.72 billion the year before. Pretax profit edged higher to GBP348.5 million from GBP339.9 million.

For financial 2020, JD Sports said like-for-like sales were up 12% on an annual basis, with the core UK & Ireland sales up 10%.

The results were not affected by the coronavirus pandemic lockdowns, which began in March this year, however, JD Sports said Covid-19 continues to affect its commercial operations and will have a material impact on its results for the period to January 30, 2021.

"It'll be some time before shoppers come out again in the numbers we saw before the pandemic but luckily for JD, it has a strong online presence that has performed well these past few months. Sales may be affected for a while yet, but JD is likely to come out of this economic crisis better than most," commented eToro analyst Adam Vettese.

Hikma Pharmaceuticals was up 2.5% after Morgan Stanley raised the drugmaker to Overweight from Equal Weight.

At the other end of the large-cap index, Whitbread was the worst performer, down 3.5% after the hospitality firm said first-quarter like-for-like sales slumped due to the coronavirus lockdown.

For the first quarter ended May 28, group like-for-like sales fell 80% and total sales were down 79%. Whitbread said the first-quarter performance reflects the impact of the closure of its hotel and restaurant operations, in both the UK and Germany, at the end of March.

In addition, Societe Generale downgraded the Premier Inn hotel chain owner to Sell from Hold.

In the FTSE 250, Plus500 was the best performer, up 6.5% after the online trading company said revenue in the first half nearly quadrupled and reported a record number of active customers.

Plus500 said it expects revenue of about USD564.2 million for the six months to June 30, up from USD148.0 million the year before. It gained 198,176 new customers in the first half, up from 47,540 the year before.

The Japanese Nikkei 225 index closed down 0.4%. In China, the Shanghai Composite ended up 0.9%, while the Hang Seng index in Hong Kong is down 0.3%.

The pound was quoted at USD1.2475 early Tuesday, down from USD1.2492 late Monday, with Brexit negotiations set to resume.

The EU's chief Brexit negotiator Michel Barnier will travel to London on Tuesday for talks with his UK counterpart David Frost.

Last week, discussions between the two sides on a post-Brexit trade deal broke up early with "significant differences" remaining.

But Barnier and Frost will meet face-to-face in London on Tuesday, before talks with the rest of their teams on Wednesday.

The UK's Chief Negotiator Frost said last week that though the ability to meet in person had given "extra depth and flexibility" to the discussions, there was more to do. Barnier said that while Brussels had engaged "constructively", officials needed to see an "equivalent engagement from the UK side".

The euro was quoted at USD1.1291, marginally lower from USD1.1312. Against the yen, the dollar was quoted at JPY107.47, flat from JPY107.49.

Brent oil was quoted at USD42.55 a barrel Tuesday morning, down from USD43.43 late Monday. Gold was quoted at USD1,782.28 an ounce, flat from USD1,784.81

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.