London close: Stocks finish mixed as Sunak extends furlough, loan schemes

London stocks finished in a mixed state on Thursday, as investors digested the extension of Covid-19 assistance from the Chancellor, and mulled the latest policy announcement from the Bank of England.

The FTSE 100 ended the session down 0.3% at 6,551.06, while the FTSE 250 was 0.99% higher at 20,296.04.

Sterling was stronger against its major trading pairs, last rising 0.64% on the dollar to $1.3596, and strengthening 0.2% against the euro to €1.1095.

A stronger pound tends to dent the FTSE 100, as around 70% of its constituents derive most of their earnings from overseas.

“The FTSE 100 has been today’s laggard in Europe, with the strength of sterling dampening sentiment around the index,” said IG senior market analyst Joshua Mahony.

“While hurdles evidently remain, noise from both the UK and EU allude to eventual compromise as they seek to finalise a deal in time for the month-end deadline.

“While the FTSE 100 may be suffering at the hands of a stronger pound, UK investors are clearly in an optimistic mood given the FTSE 250 outperformance we are seeing play out.”

Mahony said the prospect of a breakthrough in both US stimulus and Brexit talks had helped lift sentiment over the course of the week, with that risk-on sentiment sending the dollar to the lowest ebb since April 2018.

“While the trimmed-down US stimulus package being touted falls well short of the numbers suggested pre-election, markets seem more than happy to take any short-term win in anticipation of a more comprehensive package once Biden takes office.”

During the afternoon, the Chancellor announced that the government’s furlough scheme was being extended to the end of April, with the government continuing to contribute 80% towards wages.

Rishi Sunak said the move would give businesses and employees certainty into the new year.

Sunak also confirmed that the government-guaranteed Covid-19 business loan schemes would be extended until the end of March.

Those schemes included the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme, which had been due to close at the end of January.

The changes came ahead of the Budget, which the Chancellor confirmed would take place on 3 March.

Earlier, the Bank of England left the benchmark interest rate on hold at 0.1%, as expected, while asset purchases were also left unchanged after it announced last month that it was injecting an extra £150bn into the UK economy.

In equity markets, precious metals miners Polymetal and Fresnillo shone as gold prices advanced, rising 3.54% and 1.22%, respectively.

WPP rallied 4.19% as it said it would increase its dividend each year starting in 2020 and pay out about 40% of headline earnings per share.

Watches of Switzerland gained 6.32% as it upgraded its full-year sales guidance after a stronger-than-expected first-half performance and solid start to the third quarter.

On the downside, travel food outlet operator SSP Group edged 2.76% lower after saying it expects an 80% fall in first quarter sales as the second wave of Covid-19 hit its UK and European markets with volatility continuing into the second three months of the financial year.

The owner of Upper Crust reported an annual loss of £425m compared with £197.2m profit as the pandemic battered that global travel industry.

Revenue slumped 47% on a constant currency basis to £1.43bn.

Avon Rubber tumbled 11.9% after the respiratory equipment manufacturer warned approval processes related to several US contracts had been delayed, pushing out deliveries and associated revenues until the new year.

Vodafone, United Utilities, British American Tobacco and Morrisons all fell, by 4.05%, 1.32%, 0.44% and 0.25% as their stocks went ex-dividend.

Market Movers

FTSE 100 (UKX) 6,551.06 -0.30%
FTSE 250 (MCX) 20,296.04 0.99%
techMARK (TASX) 4,088.22 0.10%

FTSE 100 - Risers

WPP (WPP) 817.60p 4.53%
Pearson (PSON) 685.20p 3.79%
Polymetal International (POLY) 1,715.00p 3.78%
Aveva Group (AVV) 3,293.00p 3.55%
Entain (ENT) 1,147.00p 3.33%
Intermediate Capital Group (ICP) 1,687.00p 2.62%
Halma (HLMA) 2,445.00p 1.71%
Anglo American (AAL) 2,488.50p 1.70%
Fresnillo (FRES) 1,163.00p 1.57%
Next (NXT) 6,926.00p 1.55%

FTSE 100 - Fallers

Vodafone Group (VOD) 125.86p -3.76%
United Utilities Group (UU.) 925.80p -2.83%
Ocado Group (OCDO) 2,220.00p -2.72%
Morrison (Wm) Supermarkets (MRW) 178.65p -2.46%
BAE Systems (BA.) 493.10p -2.16%
British American Tobacco (BATS) 2,800.50p -2.08%
Rolls-Royce Holdings (RR.) 112.50p -2.00%
Sainsbury (J) (SBRY) 227.40p -1.64%
DCC (DCC) 5,386.00p -1.61%
Burberry Group (BRBY) 1,841.00p -1.58%

FTSE 250 - Risers

Signature Aviation (SIG) 375.40p 40.07%
Rank Group (RNK) 148.40p 8.32%
Apax Global Alpha Limited (APAX) 204.00p 7.37%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,988.00p 7.34%
Watches of Switzerland Group (WOSG) 554.00p 6.13%
Syncona Limited NPV (SYNC) 259.50p 5.06%
Playtech (PTEC) 416.20p 4.76%
Energean (ENOG) 705.60p 4.69%
Polypipe Group (PLP) 573.00p 4.56%
Petropavlovsk (POG) 32.55p 4.49%

FTSE 250 - Fallers

Avon Rubber (AVON) 3,295.00p -11.90%
Airtel Africa (AAF) 76.70p -3.76%
Chemring Group (CHG) 290.50p -3.17%
Vivo Energy (VVO) 82.60p -2.82%
SSP Group (SSPG) 318.00p -2.51%
Britvic (BVIC) 802.00p -2.25%
Greencore Group (GNC) 114.60p -2.05%
Mitchells & Butlers (MAB) 242.50p -2.02%
888 Holdings (888) 278.50p -1.76%
Sabre Insurance Group (SBRE) 256.00p -1.54%