London close: Stocks finish firmer as investors digest fresh Covid relief
London stocks managed to close in the green on Tuesday, as investors mulled the impact of England’s third national lockdown and news of a fresh £4.6bn package of Covid relief measures to help businesses get through it.
The FTSE 100 ended the session up 0.61% at 6,612.25, and the FTSE 250 was 0.87% firmer at 20,727.37.
Sterling was in a mixed state, last trading 0.36% stronger on the dollar at $1.3620, but weakening 0.01% against the euro to €1.1079.
“The FTSE is being greatly helped by big oil stocks and that has given it the edge over the markets in mainland Europe, where lockdown worries are hurting sentiment,” said CMC Markets analyst David Madden.
“The rally in the underlying oil market has boosted BP and Royal Dutch Shell and in turn that has lifted the British index.”
Madden noted that the top-flight index wasn’t quite as strong as it looked, as more than half of its gains in terms of index points were being derived from Shell and BP.
“The wider mood is a little downbeat as tougher lockdown restrictions in countries like the UK, Germany and Denmark have dampened the sentiment.
“In the near-term, the economies of Europe will be constrained by the virus, hence the negative move in the continental markets but traders are also aware of the longer-term prospects of vaccines so the declines are not too big.”
Chancellor Rishi Sunak said earlier that firms in the retail, hospitality and leisure businesses would get one-off grants worth up to £9,000 each to help weather a lockdown set to last at least six weeks.
There was also a £594m discretionary fund to support other impacted businesses not eligible for the grants that might be affected by the latest restrictions.
Sunak said the measures were designed to help firms get through the spring period.
“Although there is a lot of noise around this lockdown in the UK, the long-term narrative remains tentatively optimistic about vaccines allowing a return to relative normality by the spring,” said Neil Wilson, chief market analyst at Markets.com.
“Whilst those with children in school are disappointed that they are being asked to shoulder any of the burden, let alone see their lives upended again, the market is relatively comfortable with the fact the first quarter is going to be tough.”
In equity markets, Next surged 8.04% after the retailer reported a smaller-than-expected drop in sales over Christmas and said online sales made up for almost all those lost in retail stores.
In the nine weeks to 26 December, full price sales declined 1.1% on last year, coming in ahead of the retailer’s central guidance for an 8% drop in its October trading update.
Online sales during the period rose 38%, with UK online sales up 36%, while retail sales slumped 43%.
Softcat gained 8.14% after it said trading has remained positive since its first-quarter statement in mid-November and that it is ahead of where it expected to be, amid strong demand from its public sector customers.
Iron ore pellet producer Ferrexpo was 5.48% higher after announcing a special interim dividend of 13.2 US cents, reflecting "the strong operational and financial performance of the group in 2020, and strong balance sheet".
In broker note action, Aveva was boosted 7.05% by an upgrade at Investec, while Royal Mail was lifted 4.25% by an upgrade to ‘hold’ at Berenberg.
British Land lost 1.49% after a downgrade at Morgan Stanley.
Market Movers
FTSE 100 (UKX) 6,612.25 0.61%
FTSE 250 (MCX) 20,717.37 0.87%
techMARK (TASX) 4,138.69 0.49%
FTSE 100 - Risers
Next (NXT) 7,466.00p 8.02%
Aveva Group (AVV) 3,528.00p 7.73%
BP (BP.) 272.50p 7.07%
Royal Dutch Shell 'A' (RDSA) 1,391.60p 6.87%
Royal Dutch Shell 'B' (RDSB) 1,337.60p 6.28%
Rolls-Royce Holdings (RR.) 107.75p 4.41%
Glencore (GLEN) 254.35p 3.65%
Kingfisher (KGF) 284.40p 3.16%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,734.00p 2.90%
Taylor Wimpey (TW.) 161.25p 2.19%
FTSE 100 - Fallers
Smurfit Kappa Group (SKG) 3,460.00p -3.41%
WPP (WPP) 774.60p -2.81%
London Stock Exchange Group (LSE) 9,036.00p -2.44%
Spirax-Sarco Engineering (SPX) 11,425.00p -2.23%
Experian (EXPN) 2,850.00p -2.03%
United Utilities Group (UU.) 895.00p -1.86%
NATWEST GROUP PLC ORD 100P (NWG) 156.05p -1.73%
Rightmove (RMV) 640.20p -1.72%
National Grid (NG.) 868.40p -1.61%
British Land Company (BLND) 468.70p -1.49%
FTSE 250 - Risers
Petrofac Ltd. (PFC) 147.70p 8.32%
Softcat (SCT) 1,514.00p 8.14%
Wood Group (John) (WG.) 338.00p 6.66%
National Express Group (NEX) 240.40p 5.44%
Ferrexpo (FXPO) 312.20p 5.40%
Mitchells & Butlers (MAB) 238.00p 5.31%
Wetherspoon (J.D.) (JDW) 1,095.00p 4.99%
888 Holdings (888) 310.00p 4.91%
Cineworld Group (CINE) 64.44p 4.75%
CMC Markets (CMCX) 420.50p 4.73%
FTSE 250 - Fallers
ICG Enterprise Trust (ICGT) 904.00p -3.83%
Ascential (ASCL) 376.60p -3.63%
Watches of Switzerland Group (WOSG) 556.00p -3.30%
Spirent Communications (SPT) 259.50p -2.63%
Edinburgh Worldwide Inv Trust (EWI) 356.00p -2.33%
JTC (JTC) 548.00p -2.14%
Vesuvius (VSVS) 525.50p -2.14%
Caledonia Investments (CLDN) 2,830.00p -2.08%
easyJet (EZJ) 749.40p -2.01%
Contour Global (GLO) 213.00p -1.84%