(Alliance News) - London stocks started Wednesday's session on a downbeat note as caution crept through Asia overnight over the re-emergence of Covid-19, with a number of US states seeing a rebound in infections and in Germany a slaughterhouse outbreak.
The FTSE 100 index was down 47.36 points, or 0.7%, at 6,272.76 early Wednesday. The mid-cap FTSE 250 index was down 32.79 points, or 0.2%, at 17,620.01. The AIM All-Share index was up 0.4% at 900.23, however.
The Cboe UK 100 index was down 0.9% at 10,604.49. The Cboe 250 was down 0.3% at 15,106.28, and the Cboe Small Companies flat at 9,703.25.
In mainland Europe, the CAC 40 in Paris was down 0.5% while the DAX 30 in Frankfurt was 0.3% lower early Wednesday.
"The global stock market's strength doesn't look so solid today as Asian markets closed the trading day very much mixed and the momentum doesn't seem to be very strong over in the European markets," said Naeem Aslam at AvaTrade.
In Asia on Wednesday, the Japanese Nikkei 225 index ended down 0.1%. In China, the Shanghai Composite ended up 0.3%, while the Hang Seng index in Hong Kong is down 0.2% in late trade.
Against the yen, the dollar rose to JPY106.63 from JPY106.37.
Weighing on markets were rising infections in the US and fresh outbreaks in Europe.
The US added 792 deaths in 24 hours, the Johns Hopkins University tally showed Tuesday, as the country's top infectious diseases expert warned there were "historic" challenges ahead.
Many states have largely lifted lockdown measures, and New York – the country's epicentre for the pandemic – took a big step Monday by allowing non-essential businesses to reopen. But some 20 states, primarily in the south and west, have seen a rebound in infections.
Earlier Monday, US government health experts led by Anthony Fauci warned Congress that the country faces "historic" challenges with the virus and should prepare for a lengthy battle. Fauci warned the next two weeks would be "critical to our ability to address...surgings" in Florida, Texas and other states.
Even in Europe, which has been loosening travel restrictions following a brutal few months when it was the epicentre of the pandemic, there have been major setbacks.
Germany on Tuesday reimposed lockdowns on more than 600,000 people following a cluster of infections at a slaughterhouse, while world men's tennis number one Novak Djokovic tested positive after hosting an exhibition tournament in the Balkans.
In the UK, health leaders are calling for an urgent review to ensure Britain is properly prepared for the "real risk" of a second wave of coronavirus
The appeal is backed by the presidents of the Royal Colleges of Physicians, Surgeons, GPs and Nursing – as well as the chairman of the British Medical Association.
It comes after Boris Johnson announced on Tuesday the biggest easing to date of the coronavirus lockdown in England. The prime minister said the two-metre social-distancing rule would be replaced with a "one-metre plus" rule paving the way for pubs, restaurants, hotels and cinemas to begin reopening from July 4.
Sterling was quoted at USD1.2499 early Wednesday, dipping from USD1.2526 at the London equities close on Tuesday. The euro traded at USD1.1304 early Wednesday, lower than USD1.1325 late Tuesday.
In London, Persimmon dipped 1.5% after naming National Express boss Dean Finch as the blue-chip housebuilder's next chief executive. He will take up the post at the end of the year.
Finch will succeed David Jenkinson, who announced in February that he wanted to step down once a successor had been identified.
"The board believes that Dean is a great fit for Persimmon and is well qualified to lead the business into the next phase as we continue to drive a programme of change to become the leading volume builder of good value, quality family homes throughout the UK. I look forward to welcoming him to the company at the end of the year," said Persimmon Chair Roger Devlin.
National Express shares were down 0.4%.
Mid-cap housebuilder Crest Nicholson was down 6.5% after swinging to an interim loss as Covid-19 dented its first-half performance. Further, it predicts a sharp profit drop for the full-year.
Revenue for the half year to April 30 dropped 52% to GBP240.0 million, and the housebuilder swung to a pretax loss of GBP51.2 from a GBP64.4 million profit a year prior.
The FTSE 250 constituent said it saw strong sales momentum in the wake of the UK general election and the run up to the spring selling season, but Covid-19 "significantly impacted" the first-half performance.
"Revenue and profit were both lower than we had anticipated with a substantial number of private completions planned for the end of April being postponed. We also saw indecision in several bulk deal negotiations as we entered the period of peak uncertainty," said Crest.
It has, though, been "encouraged" by the trading environment in recent weeks, even if the backdrop remains "highly uncertain".
Crest now expects adjusted pretax profit to be around GBP35 million to GBP45 million for the current financial year, after achieving just GBP4.5 million in adjusted profit for the first half. A year ago, first half adjusted pretax profit amounted to GBP64.4 million.
For the financial year ended October 31, 2019, the firm achieved adjusted pretax profit of GBP121.1 million.
Premier Foods was more upbeat, shares rising 4.1% on the London Main Market, as it turned to an annual profit and said it expects to beat forecasts for the financial year ahead.
Revenue for the year to March 28 rose 2.8% to GBP847.1 million, with Premier Foods swinging to a pretax profit of GBP53.6 million from a GBP42.7 million loss, as administration costs fell 51% to GBP76.6 million.
The UK Grocery business grew revenue each quarter and by 4.5% in the full-year. The firm's grocery categories and brands saw a "sharp increase" in volumes in the last three weeks of the financial year, as large numbers of consumers in the UK sought to build household stocks of some products during the Covid-19 pandemic.
Looking ahead, Chief Executive Alex Whitehouse said: "Revenues in the first quarter of FY20-21 are expected to be approximately 20% ahead of the same quarter a year ago reflecting continued strong demand for the group's product ranges, particularly in our Grocery business. Consequently, we expect to exceed current expectations for FY20-21 revenue and trading profit despite incurring some additional operating costs in our supply chain. Our options for cash deployment and capital allocation will improve as a result of expected further net debt reduction in FY20-21."
The economic calendar has Ifo's German business climate index at 0900 BST.
"We predict improvements in both current conditions and future expectations indices in today's report and have pencilled in an increase in the headline IFO index to 84.0. The risk may be skewed to the upside following yesterday's flash PMIs which signalled the economic recovery was proceeding more quickly than expected," said Lloyds Bank.
Gold was quoted at USD1,769.68 an ounce early Wednesday, higher than USD1,765.19 on Tuesday. Brent oil eased to USD42.80 a barrel from USD43.58 late Tuesday.
By Lucy Heming; lucyheming@alliancenews.com
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Crest Nicholson (CRST)
Premier Foods (PFD)
Persimmon (PSN)