Leading UK stocks closed in the red on Thursday but it was a mixed day for investors that saw US market regulators temporarily suspend trading in hot stock GameStop, which had tripled this week. GameStop, or ‘GameStonk’, as Elon Musk called it, was one of a small number of stocks involved in an attack on hedge funds by retail investors associated with the Wallstreetbets Reddit group.
Major US markets opened firmly ahead on Thursday giving UK investors plenty to chew over after the deluge of company announcement on ‘Super Thursday’, where many of the UK’s biggest companies reported.
In New York, the S&P 500 and Dow Jones rallied nearly 2% while Nasdaq chalked-up near 1% gains.
Also weighing on investor sentiment was the spat over vaccines involving AstraZeneca (AZN), the UK and the EU.
The benchmark FTSE 100 ended the day down 0.6%, bouncing off 6,445 morning lows to close at 6,526.15. The reversal was far stronger among mid-caps where the FTSE 250 recovered all of its morning declines to jump almost 0.5%, closing at 20,368.25.
Alcoholic drinks giant Diageo (DGE) rallied 3.2% to £29.45 as the Johnnie Walker-to-Smirnoff brands owner returned to organic sales growth in a forecast-beating first half and raised its dividend, even after operating profits declined amid pub and bar closures and unfavourable currency swings.
North America, its biggest market, performed ahead of management’s expectations and while Diageo isn’t providing specific guidance due to ongoing volatility, the spirits seller expects to see a second half improvement across regions given a weak comparator period.
Mining giant Anglo American (AAL) was even stronger, ending the day 3.5% up £24.355 despite cutting its diamond production guidance for 2021 after reporting lower output for 2020 owing to ongoing operational challenges.
Investors were reassured as the miner maintained guidance on other commodities including iron ore, copper an coal and insisted it continues to see ‘positive demand for rough diamonds, supported by consumer demand for diamond jewellery in the holiday selling season’, in 2021 to date.
Silver and gold miner Fresnillo (FRES) topped the FTSE 100 leaderboard with a 7% jump to 990.33p on firm precious metal pricing.
UPGRADE FOR TATE
For the year to March 2021, despite the continuing impact of the pandemic, Tate & Lyle now expects to deliver adjusted pre-tax profits ‘modestly ahead’ of the prior year, benefitting from ‘continued momentum in Food & Beverage Solutions, cost discipline and significantly higher year-on-year Commodities profits’.
Elsewhere, Britvic (BVIC) arrested earlier declines to nudge 0.7% higher at 766p despite the soft drinks manufacturer posting a decline in first quarter revenue. The company said performance would continue to be affected by pandemic-induced weakness in its out-of-home division.
By contrast, premium mixers supplier and popular retail investor play Fevertree (FEVR:AIM) jumped nearly 10% to £25.28 after reporting a strong second half performance across key markets and upgrading full year revenue guidance to around £252 million.
In the airlines sector, EasyJet (EZJ) reversed earlier declines to nudge more than 4% higher at 744.6p after reporting a slump in first quarter revenue and warning it expects second quarter capacity of just 10% of the prior year period as lockdowns continue to dent air travel activity.
Hungarian budget flyer Wizz Air (WIZZ) also firmed, gaining nearly 5% to £43.96 as it reported a €116 million (£102 million) third quarter loss with restrictions continuing to inhibit the aviation market, though chief executive Jozsef Varadi insisted the carrier is focused on emerging from the crisis as a ‘structural winner’ and that his focus is on optimising Wizz Air’s cash position.
Euromoney (ERM) arrested its slide late in the day, closing around 0.5% off at 964p on news of a fall in first quarter revenue as the pandemic-led impact on physical events hurt revenue in its institutional investor business