UK markets added to their strong Monday gains in opening trading on Tuesday as the initial shot in the arm from the Pfizer coronavirus vaccine news continued to work its magic on the mood of investors.

The huge US pharma firm saw its stock jump nearly 8% on Monday after breaking the news to the world, closing at $30.20, although the stock got another 2% after-hours push.

This helped Wall Street’s two its its three major indexes to record highs on Monday as the first positive data from a late-stage COVID-19 vaccine trial prompted hopes that an economic recovery from the pandemic-driven crisis was finally in sight.

At the close in New York, the Dow Jones Industrial Average gained 4.3% to hit a new six-month high, while the S&P 500 climbed 2.5%. The tech-laden Nasdaq Composite went into reverse reflecting its strong run through the pandemic, losing 1.5% at the close to 11,713.78.

FIRM FTSE 100 & 250

In the UK, the benchmark FTSE 100 gained another 0.4% on yesterday’s near-5% jump, hitting 6,212.34, its’ highest since August.

Mid-caps were also in rude health, the FTSE 250 up 0.3% at 18,908.55, surging to a pre-coronavirus peak.

Most major European markets struggled for momentum early on Tuesday, failing to capture the positives seen overnight in Asia. At the close in Tokyo, the Nikkei 225 gained 0.3% to hit a new five-year high of 24,905.59, while Hong Kong’s Hang Seng also finished the day 1.1% in the black.

In company news, Persimmon (PSN) said it will pay a further interim dividend just before Christmas as house sales continued to go well in the third quarter.

The FTSE 100 housebuilder said it will pay a 70p per share payment on 14 December, replacing the 110p final dividend for last year that had been withheld due to the coronavirus.

Persimmon said that trading had remained strong since the first UK lockdowns were lifted in the summer, with average private weekly sales rates per site for the third quarter 38% ahead of 2019, only slightly down from the 49% reported in August.

Persimmon shares declined 2.5% to £27.20.

Aero-engineer Rolls-Royce (RR.) led the blue-chips higher, jumping 26% to 125.88p, while betting firm Flutter’s (FLTR) 4.5% fall to £127.90 put it top of the FTSE loser board on Tuesday.

GROWTH-FREE BEYOND MEAT

Over in the US after-hours, plant-based meat maker Beyond Meat reported weaker-than-expected quarterly sales on Monday, citing declines in restaurant sales and a slowdown in retail purchases as consumers worked through their stockpiles.

Net sales rose 2.7% to $94.4 million in the quarter ended 26 September, widely missing analyst estimates of $132.8 million, according to Refinitiv data, sending the stock plunging 20%.

British grocery sales increased by 6.9% in October year-on-year and were up 7.2% in the last week of the month as consumers in England prepared for another lockdown, industry data showed on Tuesday.

Distribution firm DCC (DCC) raised its interim dividend and said it ‘remains very active from a development perspective’ despite COVID-19 disruption. The sales, marketing and support services group announced a distribution of 51.95p per share, 5% higher than last year.

The stock lost some of its earlier gains to trade 2%up at £57.28 on Tuesday.

Premier Foods, (PFD), the maker of Oxo stock cubes and Bisto gravy, on Tuesday raised its full-year trading profit outlook for the second time as it expects stronger demand for its brands during pandemic-led government restrictions on eating out.

The Mr Kipling cakes maker said trading profit rose 28.7% to £65.8 million for the 26 weeks ended 26 September, ahead of a company-supplied consensus of £62 million, as more people cooked at home during the lockdown.

But Premier shares fell 5% to 97.15p, reflecting the strong run for the stock since May.

ELSEWHERE ON THE MARKETS

Aero-parts engineer Meggitt (MGGT) jumped 8% to 405.55p after it said it expected to make underlying operating profit of between £180 million and £200 million in 2020.

This is despite the slump in travel markets due to the pandemic.

British property developer Land Securities (LAND) rallied 6% to 681.45p on Tuesday despite posting a bigger first-half pre-tax loss as rent payments were hit by a raft of store closures and fall in consumer demand due to Covid-19 restrictions.

The company said its loss before tax in the six months to 30 September widened to £835 million from a loss of £147 million a year earlier.

Motor insurer Direct Line (DLG) posted lower premiums due to weak car sales in the face of the pandemic crisis, but said premium growth in its roadside rescue and recovery service business Green Flag returned to pre-pandemic levels.

Direct Line's gross written premiums for the third quarter dipped 0.8% to £851.5 million, with its biggest segment - motor insurance - recording a 2.3% drop.

Shares in the insurer nudged 0.5% higher to 283.95p.

Fund management giant Schroders (SDR) aims to raise £250 million by floating its new British Opportunities Trust fund next month that will inject equity into high growth companies hit by the coronavirus pandemic.

Schroders believes that the coronavirus pandemic, and other economic factors, are having a dramatic effect on many companies in Britain, creating a ‘once in a generation’ need for new equity, the company said.

Schroders shares rallied 10% to 272.5p.

 

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Issue Date: 10 Nov 2020