London open: Stocks in the black despite lockdown, ahead of Sunak statement

London stocks rose in early trade on Tuesday despite the imposition of a third national lockdown in England, as investors eyed a statement from Chancellor Rishi Sunak on a fresh business support package.

At 0840 GMT, the FTSE 100 was up 0.6% at 6,609.84, faring well considering England was set to endure another six weeks at least of lockdown.

Spreadex analyst Connor Campbell said: "Avoiding the collapse that greeted previous lockdown announcements, the return to the harshest measures in the UK nevertheless clipped the FTSE’s wings on Tuesday.

"At points on Monday, the UK index was up 2.9%, galloping to levels last seen at the start of March 2020 following the Oxford/AstraZeneca vaccine rollout. Then it was shot down by the announcement Boris Johnson would be addressing the nation to outline the latest set of restrictions.

"It shows how keen investors were to start 2021 on the front foot that the FTSE still managed to end Monday up 1.7% despite a fresh six-week lockdown (with the pound admittedly taking much of the flak)."

Campbell said sterling held up as well as it could, nudging 0.1% higher against the dollar but remaining unchanged against the euro. "Not great, given the extent of yesterday’s fall against both rival currencies," he added.

"How the index and currency perform throughout the rest of the day may well come down to what additional support Chancellor Rishi Sunak announces this Tuesday, ideally at least a return to the kind of aid offered during Lockdown 1.0," said Campbell.

In equity markets, Next surged 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%.

Supermarket chain Morrisons was also in the black after it reported a 9.3% rise in like-for-like sales over the key Christmas and New Year three-week period to January 3.

Softcat pushed higher 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 also sharply 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, Royal Mail was boosted by an upgrade to ‘hold’ at Berenberg , while British Land and TI Fluid Systems were hit by downgrades at Morgan Stanley and JPMorgan, respectively.

Market Movers

FTSE 100 (UKX) 6,609.84 0.58%
FTSE 250 (MCX) 20,559.99 0.11%
techMARK (TASX) 4,136.54 0.44%

FTSE 100 - Risers

Next (NXT) 7,470.00p 8.07%
Aveva Group (AVV) 3,413.00p 4.21%
Royal Dutch Shell 'A' (RDSA) 1,342.20p 3.07%
Royal Dutch Shell 'B' (RDSB) 1,294.80p 2.88%
BP (BP.) 261.55p 2.77%
Ocado Group (OCDO) 2,420.00p 2.54%
Rolls-Royce Holdings (RR.) 105.60p 2.33%
Kingfisher (KGF) 282.10p 2.32%
Taylor Wimpey (TW.) 161.35p 2.25%
JD Sports Fashion (JD.) 830.80p 2.01%

FTSE 100 - Fallers

Polymetal International (POLY) 1,810.50p -1.68%
Severn Trent (SVT) 2,306.00p -1.28%
Burberry Group (BRBY) 1,796.50p -1.26%
Rentokil Initial (RTO) 522.80p -1.13%
Entain (ENT) 1,404.00p -1.13%
United Utilities Group (UU.) 902.60p -1.03%
Reckitt Benckiser Group (RB.) 6,716.00p -1.00%
British Land Company (BLND) 471.30p -0.95%
Associated British Foods (ABF) 2,206.00p -0.90%
Fresnillo (FRES) 1,238.50p -0.84%

FTSE 250 - Risers

Softcat (SCT) 1,489.00p 6.36%
Ferrexpo (FXPO) 308.60p 4.19%
Aston Martin Lagonda Global Holdings (AML) 1,873.00p 3.71%
Carnival (CCL) 1,309.00p 2.59%
Royal Mail (RMG) 349.90p 2.46%
National Express Group (NEX) 233.20p 2.28%
Signature Aviation (SIG) 400.00p 2.12%
Meggitt (MGGT) 454.00p 2.00%
Mitchells & Butlers (MAB) 230.50p 1.99%
Frasers Group (FRAS) 452.80p 1.80%

FTSE 250 - Fallers

Cairn Energy (CNE) 200.60p -2.15%
Capita (CPI) 37.89p -2.12%
Henderson Smaller Companies Inv Trust (HSL) 1,022.00p -2.11%
Pets at Home Group (PETS) 423.00p -1.86%
St. Modwen Properties (SMP) 376.00p -1.70%
TI Fluid Systems (TIFS) 239.65p -1.56%
Telecom Plus (TEP) 1,430.00p -1.52%
Indivior (INDV) 102.50p -1.44%
Diploma (DPLM) 2,188.00p -1.44%
Great Portland Estates (GPOR) 652.00p -1.42%