20th Aug 2021 12:02
(Alliance News) - Stocks were mixed in London at midday on Friday, with the FTSE 100 containing losses after a rough session on Thursday, but the mid-cap index was marginally positive thanks to strong performances from retailers Marks & Spencer and Morrisons.
AJ Bell financial analyst Danni Hewson said: "UK stocks held the line despite further weakness in Asia overnight, with retailers enjoying some strength despite signs that some of the pent-up consumer spending had leaked from the high street to hospitality in July as restaurants and leisure facilities reopened."
The FTSE 100 index was down 12.98 points, or 0.2%, at 7,045.88 on Friday at noon, after initially opening 0.3% higher. The mid-cap FTSE 250 index was up 28.49 points, or 0.1%, at 23,635.36. The AIM All-Share index was down 0.1% at 1,259.18.
The Cboe UK 100 index was down 0.1% at 700.90. The Cboe 250 was up 0.1% at 21,494.04, and the Cboe Small Companies was also 0.2% lower at 15,277.13.
In Paris, the CAC 40 stock index was 0.4% lower, while in Frankfurt, the DAX 30 was down 0.5%.
M&S was 11% higher, the best performer in the FTSE 250, as the food, clothing and homewares retailer upped its full year guidance.
M&S is in its 2022 financial year, ending March next year, and noted significant growth on financial 2020 results, which represent pre-pandemic trading.
In the 19 weeks ended August 14, total revenue was up 29% from a year ago and up 4.4% on the same period in financial 2020.
Clothing & Home revenue was up by 92% year-on-year, Food by 11%, and International by 40%.
As a result, M&S lifted its full-year adjusted pretax profit outlook to be above the upper end of previous guidance of GBP300 to GBP350 million. Consensus was for around GBP334 million, according to Shore Capital analyst Clive Black.
Fellow retailer Morrisons was up 4.4% as it accepted a new GBP7 billion bid from private equity firm Clayton, Dubilier & Rice late Thursday.
The deal has been unanimously accepted by the board of the grocer and directors have said shareholders should vote in favour of the takeover at a meeting due in early October.
It means the company has withdrawn its recommendation for investors to accept a previous GBP6.7 billion takeover deal from a consortium led by Softbank-backed private equity firm Fortress.
Fortress hasn't abandoned yet its effort to buy Morrisons, however.
Fortress on Friday asked Morrisons shareholders to take no action on the new CD&R bid, saying it is "considering its options" with respect to the all-cash offer it made at the start of July and increased at the start of August. It said it will make a further announcement "in due course".
FTSE 100-listed peers Sainsbury's and Tesco added 1.6% and 0.5%.
JD Sports, Burberry and Next were up 1.9%, 1.3% and 0.8%, despite retail sales unexpectedly declining in the UK in July, data from the Office of National Statistics showed.
Retail sales volumes fell by 2.5% in July from June, which is significantly below the market consensus cited by FXStreet of a 0.4% gain. On the year before, July's sales rose 2.4%, again well short of market consensus, which had predicted a 6% rise.
But ONS also noted July's sales are up 5.8% on the pre-coronavirus pandemic level in February 2020.
Astrazeneca was down 0.8%. It reported good results from its Covid-19 prevention trial, though less positively said that subsidiary Alexion has halted its amyotrophic lateral sclerosis drug trial due to lack of efficacy.
The pharmaceutical firm noted "positive" results from its Provent Phase III trial of Covid-19 treatment, AZD7442. The company said AZD7442 "achieved a statistically significant reduction in the incidence of symptomatic Covid-19, the trial's primary endpoint." AZD7442 is a combination of two long-acting antibodies, Astra said.
Separately, Alexion halted its Champion-Als Phase III trial of a potential treatment for amyotrophic lateral sclerosis due to lack of efficacy.
Babcock was 3.0% higher after Morgan Stanley raised the stock to Overweight.
The pound was quoted at USD1.3619 midday Friday, down from USD1.3666 at the London equities close Thursday. The euro was priced at USD1.1681, soft from USD1.1685.
Against the Japanese yen, the dollar was trading at JPY109.63, down from JPY109.75.
Brent oil was quoted at USD65.91 a barrel midday Friday, down from USD66.10 late Thursday. Gold was trading at USD1,783.50 an ounce, up against USD1,781.65.
US stock market futures were pointed down on Friday. The Dow Jones Industrial Average and the S&P 500 were both called 0.4% lower, while the Nasdaq Composite was seen opening down 0.2%.
AJ Bell's Hewson said: "Markets may struggle for direction until the latter part of next week given a dearth of corporate and economic updates with the Jackson Hole summit kicking off next Thursday and giving central bankers and other economic decision makers a chance to outline their plans for the next phase of the pandemic recovery."
Eric Vanraes, portfolio manager of the Strategic Bond Opportunities Fund at Eric Sturdza Investments, said Jackson Hole will be, as always, "eagerly awaited".
"In our view, expectations are exaggerated, as Powell will most likely comment on the key points of the minutes released on the August 18, with a few updates, including views on developments since the start of August. He could, of course, mention timing around the next round of tapering, but will probably defer to the next FOMC, on September 22, stating this will be the official and formal moment to announce the details of their policy, including tapering," Vanraes said.
He added: "The big question mark is the lag between the announcement and the implementation of this tapering. Three months? Six months? Everything will depend on the evolution of the Covid pandemic, in our view."
By Paul McGowan; [email protected]
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