ADVFN Morning London Market Report: Thursday 19 November 2020

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London open: Stocks fall as investors fret about rising Covid cases, restrictions

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London stocks fell in early trade on Thursday as optimism over a potential Covid-19 vaccine was replaced by worries about rising cases, tightening restrictions and their impact on the economy.

At 0840 GMT, the FTSE 100 was down 0.7% at 6,340.52.

CMC Markets analyst Michael Hewson said: “With infection and hospitalisation rates rising, and the risk that current lockdown restrictions either remain in place, or get extended into 2021, the probability that any economic damage will become permanent is only likely to increase. These risks then need to be offset by the longer-term benefits of a workable vaccine, which even if starting to get rolled out next year, could take up to two years to really make a difference.”

In equity markets, discount retailer B&M European Value Retail slumped as its stock went ex-dividend.

B&Q owner Kingfisher fell even as it reported a strong rise in third-quarter sales as consumers spent the coronavirus lockdown improving their homes.

Richard Hunter, head of markets at Interactive Investor, noted that over the last year, the outperformance of the share price has been significant, with a rise of 43% compared to a decline of 13% for the wider FTSE 100.

“Quite apart from the challenges which may be yet to come, the strong performance has led to the question of whether the shares are now up with events, as evidenced by some initial profit taking in early trade, such that the market consensus of the shares remains at a hold,” he said.

On the upside, Halma was the standout gainer on the FTSE 100 after the safety equipment maker revised its full-year profit forecasts and lifted its interim dividend as order intake in the second half increased year-on-year.

Morrisons also rallied after an upgrade to ‘buy’ at Goldman Sachs.

Speciality chemicals company Johnson Matthey gained after it reported a slump in first-half pre-tax profit as the coronavirus pandemic dented demand but said it expects a “materially stronger” second half.

Outsourcer Serco was a high riser after an article in The Times suggested it has attracted interest from at least two private equity firms that are quietly running the numbers with advice from investment banks.

Royal Mail rallied despite saying it swung to a loss in the first half as redundancy and Covid-19 costs more than offset higher revenue from booming parcel deliveries. The FTSE 250 group swung to a £20m operating loss in the six months to the end of September from a £61m profit a year earlier as revenue rose 9.8% to £5.7bn.

Online trading platform CMC Markets was up after it reported a record first-half performance as it benefited from ongoing volatility related to the pandemic.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Halma Plc +3.32% +78.00 2,428.00
2 Micro Focus International Plc +3.25% +11.60 368.00
3 Bae Systems Plc +1.74% +8.70 507.80
4 Hikma Pharmaceuticals Plc +1.69% +43.00 2,589.00
5 Morrison (wm) Supermarkets Plc +1.60% +2.90 183.85
6 Pearson Plc +1.31% +8.20 632.20
7 Scottish Mortgage Investment Trust Plc +1.29% +13.00 1,023.00
8 Ocado Group Plc +0.96% +22.00 2,314.00
9 Spirax-sarco Engineering Plc +0.96% +110.00 11,575.00
10 Astrazeneca Plc +0.61% +50.00 8,230.00

 

Top 10 FTSE 100 Fallers

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76.4% of retail CFD accounts lose money.

 

# Name Change Pct Change Cur Price
1 Kingfisher Plc -3.98% -11.90 287.40
2 Land Securities Group Plc -3.68% -26.00 679.90
3 Melrose Industries Plc -3.22% -5.35 160.55
4 British Land Company Plc -3.19% -15.90 482.70
5 Whitbread Plc -2.66% -83.00 3,037.00
6 Evraz Plc -2.64% -10.10 372.50
7 Barratt Developments Plc -2.61% -17.40 648.80
8 Glencore Plc -2.22% -4.30 189.56
9 Smith & Nephew Plc -2.17% -32.00 1,441.00
10 Anglo American Plc -2.16% -47.00 2,124.50

 

Thursday newspaper round-up: Norwegian Air, pay freezes, Apple

Low-cost airline Norwegian Air has filed for bankruptcy protection in Ireland, becoming the biggest casualty of the coronavirus pandemic in the aviation sector to date. The troubled carrier has asked an Irish court to carry out a process of examinership. This should protect the group’s assets while it tries to slash debt levels and find new funding as part of a restructuring. It is expected to take as long as five months. – Guardian

Seven out of 10 UK pubs and restaurants fear they will become financially unviable and forced to close next year as a result of damaging Covid-19 restrictions, a new poll has revealed. The main trade bodies representing the beleaguered sector – the British Beer and Pub Association, the British Institute of Innkeeping and UKHospitality – said the new findings revealed that 72% of members expected to operate at a loss and to be unable to survive because of the collapse in trade. – Guardian

Workers are bearing the economic cost of the Covid crisis with one-fifth of companies imposing pay freezes in the three months to October despite the resurgence in GDP growth as industries reopened. In a typical year, around one in 20 workforces would find their pay packets unchanged, according to data from XpertHR, underlining the dramatic force of the pandemic on wages. – Telegraph

Apple is to halve the fees it charges small software developers for using its App Store in an apparent attempt to head off looming prosecutions in Europe and the United States. The $2 trillion company will cut its App Store sales commission next year from 30 per cent to 15 per cent for developers that make less than $1 million annual revenue through the platform. – The Times

 

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