31st Mar 2021 08:45
(Alliance News) -Â London stocks started Wednesday on a subdued note as markets tread water ahead of details on US President Joe Biden's USD3 trillion infrastructure plan.
In company news, it was a rocky start to life in London for food delivery platform Deliveroo as shares plummeted 20% from its IPO price of GBP3.90.
The FTSE 100 index was down 16.99 points, or 0.3%, at 6,755.13 early Wednesday. The mid-cap FTSE 250 index was down just 0.71 of a point at 21,573.73. The AIM All-Share index was sightly lower at 1,193.68.
The Cboe UK 100 index was down 0.3% at 674.31. The Cboe 250 was up 0.1% at 19301.74, and the Cboe Small Companies down 0.2% at 13849.23.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.1% early Wednesday.
In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.9%. In China, the Shanghai Composite closed down 0.4%, while the Hang Seng index in Hong Kong was down 0.5%.
"A reasonably pedestrian day in Asia's risk markets as investors bide their time ahead of 'Biden Time' later tonight when the US infrastructure details get laid out," said Axi's Stephen Innes.
Biden on Wednesday is set to unveil the second big offensive of his fledgling presidency: a massive infrastructure investment project, to be accompanied by tax hikes that remain to be defined but already have his political opponents up in arms.
Having already pushed an almost USD2 trillion pandemic recovery plan through Congress, the figures being bandied about for his infrastructure plan reach as high as USD3 or even USD4 trillion.
Innes added: "And it is always a struggle to break higher ground when the market focus coalesces around a hugely risky NFP week as investors likely need a little more 'proof is in the economic pudding' before taking the next leap of faith."
Ahead of Friday's non-farm payrolls comes Wednesday's ADP report, due at 1315 BST. The ADP report is expected to show 550,000 jobs added in March, according to FXStreet consensus, up from 117,000 in February.
Before this, the economic events calendar on Wednesday has German unemployment data at 0855 BST and eurozone inflation readings at 1000 BST.
Already out, figures showed the UK's economic slump for 2020 was revised to 9.8% from a first estimate of 9.9%, though this still marks the largest annual fall in the country's output on record.
Sterling was quoted at USD1.3752 early Wednesday, strengthening from USD1.3722 late Tuesday.
There was also upbeat news out of China. The purchasing managers' index, a key gauge of manufacturing activity, grew more than expected to 51.9 – from 50.6 in February – according to the National Bureau of Statistics, with production accelerating after the holiday lull and major economies abroad also recovering from coronavirus slowdowns.
The non-manufacturing PMI made a significant rebound to 56.3, higher than the Bloomberg forecast of 52.0 and pointing to better performance in industries such as construction and higher expectations for hard-hit service businesses.
Meanwhile, Japan's industrial production fell at a faster monthly pace than expected in February, and a further fall in March is also on the cards.
Industrial output fell 2.1% on a monthly basis in February, following January's 4.3% growth. According to a survey of manufacturers, another monthly fall of 1.9% is forecast, the ministry said, before a 9.3% bounce in April.
Against the yen, the dollar climbed to JPY110.69 early Wednesday from JPY110.27 at the London equities close on Tuesday.
The euro traded at USD1.1735, firming on USD1.1730 late Tuesday.
Gold was quoted at USD1,684.71 an ounce early Wednesday, flat on USD1,685.50 on Tuesday. Brent oil was trading at USD64.69 a barrel, up on USD64.21 late Tuesday.
In London, Hikma was the top performer in the FTSE 100, rising 3.6% after Jefferies upgraded the drugmaker to Buy from Hold.
Deliveroo shares were trading at 313.07p, dropping 20% from its IPO price as conditional dealings started on Wednesday.
The food delivery platform priced its class 'A' shares at GBP3.90 each, giving it a valuation of GBP7.6 billion on admission. Last week, Deliveroo said it intended to price in a range of between GBP3.90 and GBP4.60 per share, which could have potentially valued the business up to GBP8.8 billion. At the start of this week, it narrowed that range to between GBP3.90 and GBP4.10.
Deliveroo's IPO comprises 384.6 million shares, equating to a total offer size of GBP1.50 billion or just over 21% of the company's share capital on admission. This includes 256.4 million new shares, raising GBP1 billion for the company, and 128.2 million existing shares, raising GBP500 million for Founder & Chief Executive Will Shu and other selling shareholders.
Deliveroo is making a further 38.5 million shares available in an over-allotment option which, if exercised in full, would increase the offer size to around GBP1.65 billion.
Unconditional share dealings begin in a week.
"In this next phase of our journey as a public company we will continue to invest in the innovations that help restaurants and grocers to grow their businesses, to bring customers more choice than ever before, and to provide riders with more work. Our aim is to build the definitive online food company and we're very excited about the future ahead," Shu said.
Deliveroo offered 'A' shares in its IPO, while 'B' shares are held solely by Shu. Each of Shu's B shares will have 20 votes, while A shares each will have one.
FTSE 100-listed rival Just Eat Takeaway.com was down 2.9% in early trade.
By Lucy Heming;Â [email protected]
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