Leading UK stocks continued to struggle at lunchtime on Wednesday with the benchmark FTSE 100 failing to find any real momentum as Wall Street hit new highs overnight.
The FTSE 100 had nudged less than 10 points higher at midday to 6,899.35, while the more domestically-focused FTSE 250 also laboured.
The S&P 500 index gained 14 points or 0.3% to reach an all-time high of 4,141 points as investors look forward to the first quarter earnings season which should show a strong recovery compared with the same period last year.
Later today will see the direct listing debut of Bitcoin exchange Coinbase and investors will be watching closely amid speculation of $100 billion valuations.
Sterling rallied slightly from its recent lows of $1.37, although the short-term trend still looks to favour the US dollar. Brent crude futures continued their recent advance, trading back above $64 per barrel, while gold was steady at $1,745 per ounce having touched lows of $1,680 late last month.
COUNTING THE COST OF COVID
Supermarket group Tesco (TSCO) posted a 7% increase in sales for the year to the end of February to £53.4 billion, driven by an ‘exceptionally strong’ performance in the UK and Ireland where sales grew 8.6% to £48.8 billion.
However, the cost of adapting to the pandemic meant pre-tax earnings fell 20% to £825 million. Looking to 2021, the company said it expected a ‘strong improvement in profitability’ despite volatile trading conditions.
The stock led the FTSE loser board, down 2.5% at 226p.
Fashion house Burberry (BRBY) was among the better FTSE 100 performers, up 1.5% to £20.93 after shares in French rival LVMH hit a record high on forecast-beating results posted after the market close last night.
The French firm reported a strong bounce in sales for the full year with an especially strong performance in leather goods and fashion.
Low-cost airline EasyJet (EZJ) forecast a headline loss of between £690 million and £730 million for the first half to the end of March, slightly better than market forecasts, and said it had reduced its cash burn through strong cost control and accurate forecasting.
The firm said it still has access to £2.9 billion of liquidity, having raised over £5.5 billion since the start of the pandemic, and is ‘well positioned’ for the recovery of air travel once restrictions are lifted.
Shares climbed 3.6% to 957.5p.
BETTER CLIENT CONFIDENCE
Recruitment firm Robert Walters (RWA) rallied 6.5% to 675p after reporting an 11% drop in first quarter net fee income to £87.4 million, a marked improvement from the previous quarter’s 26% fall, as activity picked up in its international business.
The UK, which represents just over 20% of income, saw a 12% drop in fees due to lockdown spanning the entire quarter, although the firm said there were ‘early signs of an improvement in client and candidate confidence’.
Defence engineering company Qinetiq (QQ.) said results for the year to the end of March would be above its previous guidance and market expectations thanks to a strong final quarter, sending the stock soaring 9% to 349p. .
Thanks to better than estimated organic sales growth, full year operating profits are now seen around £147 million against market forecasts of £139 million, while net cash is expected to top £150 million.
Property firm British Land (BLND) posted an update on current trading showing it was still collecting over 70% of rent from tenants. Office rent collection were running at 96% while retail collections were just 54%, although the firm said it expected this to improve in coming weeks as shops re-opened.
The shares remained largely flat at 510p.
