10th Dec 2020 08:54
(Alliance News) - Stock prices in London opened mixed on Thursday amid uncertainty surrounding the latest Brexit developments, while DS Smith rose after bringing back dividend payments.
The FTSE 100 index was up 31.74 points, or 0.4%, at 6,596.03. The mid-cap FTSE 250 index was down 34.76 points, or 0.2%, at 19,849.13. The AIM All-Share index was down 0.3% at 1,074.31.
The Cboe UK 100 index was up 0.4% at 657.05. The Cboe 250 was down 0.4% at 17,177.54. The Cboe Small Companies was flat at 11,489.99.
In mainland Europe, the CAC 40 in Paris was up 0.4%, while the DAX 30 in Frankfurt was up 0.1%.
On the London Stock Exchange, DS Smith was the best blue-chip performer, up 2.0%. The paper and packaging company said it delivered a resilient performance in the first half despite a challenging environment and declared a shareholder payout in response.
For the six months to October 31, revenue was down to GBP2.89 billion from GBP3.19 billion a year before, and pretax profit plunged to GBP97 million to GBP213 million.
DS Smith said that, over the half-year period, there was an initial further reduction in paper prices as European corrugated demand fell during lockdowns and a temporary, but sharp peak in old corrugated container prices.
However, DS resumed dividend payments, declaring an interim payout of 4.0 pence.
Croda International was up 1.5% after Berenberg raised the speciality chemicals firm to Buy from Hold.
At the other end of the large caps, Ocado was the worst performer, down 3.7%. The online grocer posted a rise in revenue for Ocado Retail, as the joint venture with food and clothing retailer Marks & Spencer Group continued to benefit from the coronavirus pandemic.
Ocado Retail posted a rise in fourth-quarter revenue, which it said reflected strong demand for online grocery during the recent lockdowns and other restrictions in the UK.
For the 13 weeks to November 29, retail revenue rose 35% to GBP579.6 million from GBP429.7 million in the fourth quarter last year. Average orders per week were 360,000 during the period, up 3.0% from 350,000 last year. Of this, 130,000 orders per week were filled by the relatively new Erith customer fulfilment centre. Average order size was GBP133.
Ocado said customers are buying the full M&S range, with the biggest sellers coming from everyday essentials in the M&S fresh categories.
Still, the stock remains 76% higher in 2020.
"Indeed, there may have been investors choosing to bank some profits of late, with the market consensus of the shares recently having slipped to a sell. This may prove to be temporary, but nonetheless underlines the great expectations now following the stock," said Interactive Investor's Richard Hunter.
M&S shares were down 1.7%.
Aviva was down 2.5% after the stock went ex-dividend, meaning new buyers no longer qualify for the latest payout.
The pound was quoted at USD1.3305 Thursday morning, down sharply from USD1.3382 at the London equities close Wednesday, after the latest UK economic data.
UK economic growth lost momentum in October against a backdrop of rising coronavirus cases, the Office for National Statistics said on Thursday.
On a monthly basis, the UK gross domestic product grew 0.4% in October, easing from 1.1% growth in September. The reading was in line with expectations.
"Recent UK GDP figures have been painting a depressing image following the excellent rebound we witnessed earlier this year, and this month is no exception. With the entirety of the UK under various levels of lockdown throughout October, it was inevitable our recovery would take a hit and growth would taper off from the summer's jump," said EQi director Richard Pearson.
"The announcement of the new vaccines provided some relief to the markets last month and hope for the future, but we have a long way to go until the economy begins to show the same relief. Coupled with the ongoing uncertainty around a post-Brexit trade agreement, it's likely the UK economy won't recover to its pre-pandemic state for years," Pearson added.
Brexit deal uncertainty was also putting pressure on sterling. UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen gave themselves until Sunday to decide on the future of post-Brexit negotiations, after a three-hour dinner left the two sides "far apart".
Johnson came to Brussels on Wednesday in a last gasp effort to salvage trade talks that are teetering towards failure and the two leaders agreed that their negotiators should attempt one last push to bridge the divide.
"We had a lively and interesting discussion on the state of play across the list of outstanding issues," Von der Leyen said in a statement after the dinner at her Brussels' headquarters. "We gained a clear understanding of each other's positions. They remain far apart," she added.
The leaders agreed to further discussions by their negotiating teams "over the next few days" and that a "firm decision" should be taken by Sunday, a UK source said.
The euro was priced at USD1.2092, up from USD1.2080. Against the yen, the dollar was trading at JPY104.45, up from JPY104.27.
The Japanese Nikkei 225 index closed down 0.2% on Thursday. In China, the Shanghai Composite ended flat, while the Hang Seng index in Hong Kong closed down 0.4%.
Brent oil was quoted at USD49.00 a barrel early Thursday, higher than USD48.72 a barrel at the London equities close Wednesday. Gold was trading at USD1,836.78 an ounce, down from USD1,849.10.
The key event on Thursday is a monetary policy decision from the European Central Bank at 1245 GMT. This will be followed by a press conference with President Christine Lagarde at 1330 GMT. The central bank is widely expected to keep rates unchanged and expand its stimulus programme.
By Arvind Bhunjun; [email protected]
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