UK stocks ended Thursday in positive territory as investors cautiously welcomed stimulus pledges from the European Central Bank to counter the pace of the selloff in bond markets.
Rising interest rates and falling bond prices have rattled stock markets in recent weeks. Some ECB officials are reported to believe the selloff in bonds could prove a headwind to the economic recovery in Eurozone nations, with rising borrowing costs affecting economic support.
The UK’s benchmark FTSE 100 index closed 0.17% higher to 6,736, while the midcap FTSE 250 index ended Thursday 0.59% higher to 21,533.
RECORD ROLLS LOSS
In company news, Rolls Royce (RR.) shares rose 0.71% to 113.8p despite reporting a larger-than-expected loss as it stuck to previous guidance, reiterating that it expects to turn cash flow positive in the second half.
Pre-tax losses amounted to £4 billion last year with negative free cash flow of £4.2 billion reflects an exceptional year on all fronts for the aerospace giant.
Underlying revenues of £11.7 billion were down from £15.4 billion last year but ahead of the consensus estimate of £11.03 billion. The company has sufficient liquidity even if there is no recovery this year, according to the CEO.
Supermarket Morrisons (MRW) dipped 1% to 175.2p after its annual profit halved as a Covid-related jump in sales was more than offset by the huge £260 million of extra costs of the crisis.
Trading platform IG (IGG) jumped 4.9% to 851p after a surge in third-quarter revenue despite a tough comparative, driven by high levels of trading during the period that saw a so-called retail frenzy in financial markets.
5G mobile tester Spirent Communications (SPT) leapt 7% higher to 254p as revenue was up 4% in 2020, boosted by strong demand for both lab and live assurance solutions and its new 5G device testing solutions and services.
Adjusted operating profit increased by 11% to $103.5 million, with its adjusted operating margin improving to 19.8% from 18.4% in 2019. The company said it had continued investing in research and development across the portfolio during the period to the tune of $103 million, 20% of revenue.
ELSEWHERE ON THE MARKET
Drug companies GlaxoSmithKline (GSK) and Vir Biotechnology said they would seek authorisation in the US and other countries for their Covid-19 antibody after late-stage clinical trials showed the drug reduced hospitalisation and risk of death by 85% and was effective against other variants. GSK’s share price fell 0.6% to £12.56.
Online train ticket platform Trainline (TRN) gained 1.1% to 485.8p despite reporting a fall in net ticket sales to £783 million, equivalent to 21% of the prior year, as the measures put in place to curb the spread of coronavirus resulted in a significant reduction in passenger volume.
Real Estate company Derwent London (DLN) edged 0.2% higher to £33.16 after it swung to annual loss as the value of its property portfolio fell owing to the impact of Covid-19 lockdowns.
For the year ended 31 December 2020, pre-tax loss was £83 million compared to a profit of £280.6 million in 2019, while net property and other income rose to £183 million from £182.6 million.
Paving specialist Marshalls (MSLH) surged 7.5% higher to 750.26p as it reinstated its dividends after a progressive growth in sales in the second half of 2020. The company has recommended a final dividend of 4.3p as sales in the fourth quarter of 2020 ended ahead of the same period the year prior.