8th Mar 2021 12:01
(Alliance News) -Â London stocks trimmed opening gains as Monday's session progressed, with crude oil's weekend price surge losing steam, but optimism over a recovering global economy and the ending of lockdowns was lifting some downtrodden shares.
The FTSE 100 index was up 11.74 points, or 0.2%, at 6,642.26 on Monday. The mid-cap FTSE 250 index was up 25.10 points, or 0.1%, at 20,986.41. The AIM All-Share index was down 0.3% at 1,159.25.
The Cboe UK 100 index was up 0.3% at 663.07. The Cboe 250 was up 0.5% at 18,775.11 and the Cboe Small Companies up 0.5% at 13,604.12.
In mainland Europe, the CAC 40 in Paris was up 0.8%, while the DAX 30 in Frankfurt was up 1.3% on Monday afternoon.
"European markets are looking to outperform their US counterparts today despite optimism over an impending stimulus package," highlighted Joshua Mahony, senior market analyst at IG.
"A weekend breakthrough on the US stimulus front has seen the Senate narrowly pass the USD1.9 trillion financial support package that is expected to drive a strong economic bounceback over the course of 2021," said Mahony. "However, while economic strength should bring optimism around the environment for stocks, there is significant anxiety that those big 2020 tech outperformers will come under pressure as we prepare for the reopening."
In London, cyber security firm Avast and online grocer Ocado were amongst the worst performers in the FTSE 100 at midday, down 3.9% and 3.7% respectively.
Wall Street is set for a fall at the open on Monday, with the Dow Jones called down 0.1%, the S&P 500 down 0.6%, and the tech-heavy Nasdaq pointed down 1.5%.
The lower futures come despite the US Senate on Saturday voting to approve a USD1.9 trillion relief package, a day after data showed US hiring picked up sharply in February as Covid-19 cases fell and vaccines fuelled hopes for more growth ahead.
Passed by 50 votes to 49 in a strict party-line vote, the sweeping legislation now heads back to the Democratic-majority House of Representatives, where it is expected to be adopted, barring a last-minute setback.
"I promised the American people help was on the way," said President Joe Biden in an address from the White House.
Even without the progressive priority of a minimum wage increase to USD15 an hour, the stimulus bill marks a victory for Biden's Democrats as they put their stamp on the recovery from a pandemic that has killed more than 500,000 people in the US and hobbled its economy. The legislation would send out USD1,400 stimulus checks to most Americans and allocate USD350 billion to state and local governments and USD130 billion to schools.
However, Sophie Griffiths, a market analyst at Oanda, noted: "The recovery in the US jobs market, an accelerating US Covid vaccine programme, the reopening of states, and a USD1.9 trillion stimulus deal is a lot of good news in a short space of time, prompting concerns of the US economy overheating."
At the top of the FTSE 100 at midday was educational publisher Pearson, rising 5.0%.
Reporting 2020 earnings on Monday, Pearson maintained its payout and posted a profit rise helped by one-off gains, though the education publisher's revenue was hurt by Covid-19.
The company also set out a new digital-focused strategy, amid a market shift to online learning.
Revenue fell 12% to GBP3.40 billion from GBP3.87 billion in 2019. Pretax profit rose 53% to GBP354 million from GBP232 million. Profit was helped by Pearson posting GBP178 million in other net gains, up sharply from GBP16 million in 2019.
Adjusted operating profit fell 46% to GBP313 million from GBP581 million. The 2020 figure beat Vuma-compiled consensus estimates of GBP309 million.
Pandemic recovery plays also were higher in London midday Monday. Jet engine maker Rolls-Royce was up 4.6% and Holiday Inn owner InterContinental Hotels up 2.9%. Cruise operator Carnival topped the FTSE 250, up 6.0%, and Anglo-German tour firm Tui rose 4.2%.
England began its lockdown easing journey on Monday as pupils returned to school for the first time in two months.
UK Prime Minister Boris Johnson urged the public to stick to the rules as the government contemplates keeping to its plan for removing measures. According to the prime minister's road map, the second part of stage one, which will allow outdoor gatherings of either six people or two households, is due on March 29.
Shops could open by April 12 and all restrictions could possibly be lifted by June 21.
The renewed push for people to continue to obey the rules comes after Health Secretary Matt Hancock shared data on Friday showing the average daily number of Covid cases, hospital admissions and deaths are the lowest they have been since autumn.
Sterling was quoted at USD1.3838, edging up from USD1.3813 at the London equities close on Friday.
The euro traded at USD1.1879, lower versus USD1.1912 late Friday. Against the yen, the dollar rose to JPY108.54 versus JPY108.21.
Gold was quoted at USD1,689.11 an ounce on Monday, down from USD1,697.43 on Friday.
Brent oil prices eased from morning highs, having risen after a missile and drone attack targeted the heart of Saudi Arabia's oil industry on Sunday in an assault claimed by Yemen's Huthi rebels.
Brent prices hit an overnight high of USD71.38, but retreated to trade around USD69.49 at midday versus USD68.74 late Friday.
London's oil majors gave up morning gains to trade broadly flat at midday.
Towards the bottom of the FTSE 250 was Micro Focus, falling 4.2% after saying it intends to appeal any patent litigation judgement in favour of Wapp Tech.
In 2018, Wapp brought a claim against Micro Focus in the Eastern District of Texas, accusing the UK company of infringing claims of three patents in connection with the manufacture and sale of some products in the ADM product line, including LoadRunner and Performance Center.
The jury on Friday delivered a verdict in favour of Wapp and awarded damages of USD172.5 million. The matter is awaiting the judge to hand down his judgement, Micro Focus noted, and the total damages awarded could increase.
By Lucy Heming;Â [email protected]
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