20th Jan 2021 08:49
(Alliance News) -Â London stocks started Wednesday's session on a mixed note after incoming US Treasury secretary Janet Yellen urged lawmakers to "act big", with investors weighing the promise of new stimulus for the world's largest economy against further bleak news on the virus front.
The FTSE 100 index was down 4.04 points, or 0.1%, at 6,708.91 early Wednesday. The mid-cap FTSE 250 index was up 96.24 points, or 0.5%, at 20,699.13. The AIM All-Share index was up 0.2% at 1,183.89.
The Cboe UK 100 index was down 0.1% at 666.96. The Cboe 250 was up 0.6% at 17,989.26, and the Cboe Small Companies up 0.2% at 12,361.24.
In mainland Europe, the CAC 40 in Paris was up 0.2% while the DAX 30 in Frankfurt was 0.3% higher early Wednesday.
"Investors are still not convinced that we are out of the woods," said Naeem Aslam, chief market analyst at AvaTrade.
"The road to recovery is long, and it is still full of obstacles...Germany extended its lockdown restriction yesterday, which is sitting on traders' dashboard today as a warning sign about economic growth," said Aslam.
Germany on Tuesday toughened a partial lockdown and extended it to February 14, with Chancellor Angela Merkel warning of possible border checks to contain "the danger" of new coronavirus variants believed to be more contagious.
Speaking after hours of crisis talks with the leaders of Germany's 16 states, Merkel said the latest restrictions were necessary as "a precaution for our country, the health of our citizens and also for the economy".
The decision in Germany came as the UK reported the highest number of daily deaths since the pandemic started. Public Health England said a further 1,610 people have died within 28 days of testing positive for Covid-19 – the highest number of UK deaths reported on a single day since the outbreak began.
The new record brings the UK total for those who have died after contracting coronavirus to 91,470.
And more than 400,000 people have now died from coronavirus in the US. Almost a year after the US registered its first death, the pace of the pandemic has picked up with 100,000 deaths coming in the past month, leaving the country with a toll far above any other nation.
US President-elect Joe Biden returned to Washington ahead of his inauguration to mark the national tragedy of the coronavirus pandemic with a moment of collective grief for Americans lost.
"To heal we must remember," the incoming president told the nation at a sunset ceremony at the Lincoln Memorial.
Biden's inauguration ceremony will start at 1530 GMT on Wednesday with Biden and incoming vice president Kamala Harris sworn into office at 1700 GMT.
The incoming Biden administration will use all available tools to address "China's abusive unfair and illegal practices" that undermine the US economy, Treasury secretary nominee Janet Yellen said on Tuesday.
If confirmed by the Senate, Yellen, who would be the first woman to serve as Treasury secretary, would be tasked with getting Biden's USD1.9 trillion stimulus bill through Congress. That will entail convincing lawmakers that the benefit of more spending outweighs concerns about the country's mounting debt pile.
"Neither the president-elect, nor I, propose this relief package without an appreciation for the country's debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big," Yellen told the Senate Finance Committee at her confirmation hearing on Tuesday.
In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.4%. Against the yen, the dollar was quoted at JPY103.76, down from JPY103.91.
In China, the Shanghai Composite closed up 0.5%, while the Hang Seng index in Hong Kong closed up 1.1%. The S&P/ASX 200 in Sydney closed up 0.4%.
Gold was quoted at USD1,855.15 an ounce early Wednesday, higher than USD1,839.70 on Tuesday. Brent oil was trading at USD56.39 a barrel, up from USD55.93 late Tuesday.
Sterling was quoted at USD1.3670 early Wednesday, higher than USD1.3616 at the London equities close on Tuesday after UK inflation beat expectations for December.
UK consumer prices rose 0.6% year-on-year in December, double the 0.3% rate seen in November. On a monthly basis, prices rose 0.3% in December, rebounding from November's 0.1% decline.
Annually, consensus had expected the inflation rate to come in at 0.5% and the monthly reading at 0.2%, according to FXStreet, with the figures beating forecasts on both counts.
The economic events calendar on Wednesday has inflation data from the eurozone at 1000 GMT.
Ahead of this, the euro rose to USD1.2144 early Wednesday from USD1.2127 late Tuesday.
Burberry rose to the top of the FTSE 100 in opening trade, shares rising 3.5%. The luxury fashion house reported a decline in third quarter revenue, though it did manage to score growth in Asia.
The luxury fashion house said retail revenue fell 4% to GBP688 million in the 13 weeks to December 26, and was down 5% at constant exchange rates.
Retail comparable store sales declined 9% as planned reductions in markdown and reduced tourist traffic offset high single-digit full-price sales growth. Positively, though, Asia Pacific comparable store sales grew 11%, helped by mainland China and Korea.
Europe, the Middle East, India & Africa comparable sales fell 37%, due to fewer tourists and Covid-19 store closures, while Americas sales fell 8%.
"We remain encouraged by the strong underlying outperformance of full-price sales in Q3 FY2021. Notwithstanding further Covid-19 disruption, we expect continued progress on our strategic objectives in Q4 FY2021. Gross margins will benefit from full price, regional, and channel mix changes as well as lower stock provisions," said Burberry.
Pearson shares also advanced 3.5% after the education publisher said sales and profit were in line with expectations for the full-year, hit as Covid-19 shuttered schools and cancelled exams, but the company noted a helpful shift to online learning.
The FTSE 100-listed firm said sales declined by 10% in 2020, and it expects to report adjusted operating profit in the range of GBP310 million to GBP315 million.
Covid-19's hit has been felt "most acutely" across International and Global Assessment amid school closures and exam cancellations, Pearson said. However, it has accelerated demand for digital learning and performance in Global Online Learning has been strong.
"Uncertainty remains in the near term as a result of the ongoing pandemic, with further lockdowns, exam cancellations and reduced global mobility. However, I am excited about our future given the shift to online learning and the huge opportunity to help more people develop the skills they need," said Chief Executive Andy Bird.
Standard Chartered slipped 2.3% after Citigroup cut the emerging markets-focused bank to Neutral from Buy.
In the FTSE 250, WH Smith rose 3.9% after a better-than-expected Christmas performance.
The books and stationery retailer said High Street revenue in December approached 2019 levels, standing at 92% of sales a year ago. For the 20 weeks to January 16, total revenue was 59% of 2019 revenue for the same period.
WH Smith said it expects monthly cash burn for the January to March period to be around GBP15 million to GBP20 million per month, which, following the good performance in November and December, will leave the group in "approximately the same liquidity position" at the end of March 2021 as it had expected at its results in November.
"We are not anticipating any material change to the current situation in the UK prior to the end of March 2021," WH Smith noted.
Wood Group sank 5.9% after Jefferies cut the energy services firm to Underperform from Hold.
By Lucy Heming;Â [email protected]
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