UK stocks ended Thursday lower as a stalemate over a post-Brexit trade deal with the European Union and rising Covid-19 infections fuelled fears of more damage to an already faltering domestic economic recovery.

Even the modestly positive start to trading on Wall Street failed to turn the tide, leaving the benchmark FTSE 100 0.8% off at 6,334.35 despite positive vaccine updates. Automotive, Oil and Tobacco sectors wore the worst of the sell-off.

Mid-caps were also under the cosh, the FTSE 250 falling 1% to 19,507.45.

VACCINE HOPE FOR MOST AT-RISK

Drugs giant AstraZeneca (AZN) nudged 0.7% lower to £81.25 despite data from mid-stage trials that showed its potential Covid-19 vaccine, developed with Oxford University boffins, produces a strong immune response in older adults.

The implied meaning that it may protect some of those most vulnerable to the disease left investors cold in light of recent vaccine headlines, the stock nudging just 9p higher to £81.89.

Home improvement retailer Kingfisher (KGF) narrowed earlier losses but still ended the day 2.7% down at 291.3p on profit-taking, despite reporting a surge in third quarter sales as consumers spent more time in, and money on, their homes.

For the three months ended 31 October, sales grew 17.6% to £3.5 billion and in the current fourth quarter to 14 November, like-for-like sales were up 12.6%, largely reflecting ‘the impact of more recent temporary lockdown measures’.

Going the other way, chemicals group Croda (CRDA) topped the FTSE 100 leader board with a c  near-4% jump to £62.48 after it agreed to buy Iberchem in a €820 million. Europe’s largest cosmetic-ingredients maker is keen on expanding into the hotly contested market of fragrances.

The maker of sunblock chemicals and pharmaceutical additives said it plans to raise £600 million in equity to help pay for the purchase.

Interestingly, chemicals peer Johnson Matthey lead the FTSE loser board on Thursday, slumping close on 6% to £24.08 after cutting its dividend and reporting a slump in profit in the first half of the year.

But safety equipment company Halma (HLMA) was on the rise after it upped its interim dividend and full year profit guidance on expectations for a stronger second half.

Halma now expects adjusted pre-tax for 2020/21 to be around 5% below 2019/20, compared with prior guidance of 5% to 10% below FY 2019/20, citing improved trading performance and plans to accelerate strategic investments in the second half of the year.

Halma shares closed a little more than 3% higher at £24.23.

Royal Mail (RMG) was up 3.3% at 295.5p after upgrading its full year revenue forecast thanks to the surge in online shopping driven by coronavirus lockdowns. The postal service now expects revenue to be £380 million-to-£580 million pounds higher year-on-year and said its main UK business could break even if the top end of that estimate is achieved.

ELSEWHERE ON THE MARKET

Naked Wines’ (WINE:AIM) earlier 8% jump ran out of steam leaving the stock just 0.6% higher at  502p as the retailer served up news of an 80% surge in first-half revenue to £157.1 million as more households ordered wine online during lockdowns.

The company also upgraded its full year sales growth guidance to 55%-to-65% with positive trading momentum having been sustained into the start of the second half of the year, although management is ‘mindful of significant levels of political and economic uncertainty’.

Floorcoverings distributor Headlam (HEAD) soared 15% to 373p on news that it now expects full year underlying pre-tax profit to come in ‘materially ahead’ of the breakeven performance anticipated by analysts. This follows a ‘sustained recovery’ in performance in the second half to date, as well as and management’s continued focus on costs.

Online brokerage CMC Markets (CMCX) closed 0.8% down at 392p despite upgrading its outlook and hiked its interim dividend after first half profit surged as client trading activity remained strong.

Inspecs (SPEC:AIM) rallied 16% to 244p as the eyewear frames specialist announced the £85 million acquisition of Germany’s leading eyewear company Eschenbach.

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Issue Date: 19 Nov 2020