UK markets opened slightly higher on Thursday as investors weighed continuing uncertainty in the US elections, but with a Biden victory looking the most likely outcome.

Meanwhile, the Bank of England voted unanimously to leave interest rates unchanged at 0.1% and increased its quantitative easing programme. It also lowered its 2020 GDP forecast to minus 11% from minus 9.5% and its 2021 forecast from 9% to 7.35%.

At 9am, the FTSE 100 was up 0.1% (roughly five points) at 5,889 points.

Trading in Asia was strong with the Japan’s Nikkei 225 rising 1.7% and China’s SE Composite gaining 1.3%. The pound gained 0.3% against the US dollar to $1.3.

FTSE 100 NEWS

Food retailer Sainsbury (SBRY) reported underlying pre-tax profit up 26% to £301 million for the 28 weeks to 19 September. Sales excluding fuel grew 6.9% on a like-for-like basis. The company is paying a special dividend of 7.3p per share in lieu of the final dividend for the 2019/20 year, while the interim pay-out is 3.2p per share. Shares added 0.6% to 210p.

Pharmaceutical firm AstraZeneca (AZN) said constant currency revenues grew 10% for the first nine-months to $19.2 billion, driven by 11% growth in product sales and an 18% drop in collaboration revenues. Financial guidance was left unchanged with revenues expected to increase by high single-digit to low double-digits and core EPS to increase by mid-to-high-teens percentage.

In separate statements, the company said it had won approval for lynparza in the European Union as a 1st-line maintenance treatment with bevacizumab for patients with positive advanced ovarian cancer.

Lynparza had also been approved in the European Union to treat prostate cancer patients with a breast cancer susceptibility gene. Shares dropped 0.6% to £84.57.

Insurer RSA Insurance (RSA) said year-to-date underlying profit was strongly up continuing the run of record results. The group reported a third-quarter combined ratio of 90% and said the outlook for continuing underwriting improvements remains positive. Shares gained 1.2% to 465p.

Software group AVEVA (AVV) reported first-half revenues down 15% to £332.6 million and adjusted earnings before interest down 38% to £56.3 million. The interim dividend f 15.5p per share was maintained. Shares fell 3% to £42.88.

Digital automotive marketplace Auto Trader (AUTO) said trade revenue fell 38% to £100.2 million, driven by the company's decision to allow retailer customers to advertise on its marketplace for free during the lockdown months of April and May, and for a 25% discounted rate for the month of June.  Pre-tax profit fell 48% to £66.2 million year-on-year. Shares fell 0.4% to 592p.

Shares in Hikma Pharmaceutical (HIK) gained 3.7% to £27.5 after the company raised full-year guidance for revenue in its generics segment following stronger-than-expected performance in the year to date.

Revenue for generics was lifted to a range of $720 million to $740 million, from previous guidance range of $710 million to $730 million, while core operating margin guidance was maintained in the range of 18% to 19% for the full year

ELSEWHERE ON THE MARKET

Shares in on-line booking firm Trainline (TRN) rallied 5.6% to 288.4p after the company said second-quarter trading conditions had improved reflecting an accelerated shift to online and digital sales during the pandemic. Interim revenues fell 76% to £31 million resulting in an operating loss of £43 million.

The company acknowledged the challenging outlook but remained confident it can navigate an extended downturn given its ‘significant liquidity headroom’ of £162 million.

Also on the move were shares in waste management company Biffa (BIFF) rising 4.7% to 230.75p after reporting a strong recovery in the second-quarter with revenues up 26% to £256.3 million. Industrial and commercial revenues recovered to 94% of the prior year in September.

Food and beverage ingredients group Tate & Lyle reported first-half pre-tax profit up 3% to £180 million even as revenues declined by 4% to £1.4 billion. Food and beverage solutions saw revenues up 1% and profit up 9% to £98 million. The dividend was maintained at 8.8p per share. Shares sweetened 5.4% to 667.3p.

Budget airline Wizz Air (WIZZ) said first-half revenue fell by 71.8% to €471.2 million as passenger numbers dropped 70.7% while ticket revenues decreased by 78.9% to €201.8 million due to the Covid-19 lockdown. The airline said ot will continue to focus on cost management and strive to maintain cash-positive flying with a disciplined approach towards capacity. Shares dropped 2.6% to £34.

Shares in fuel management systems TI Fluid Systems (TIFS) raced 6% higher to 205.75p after reporting strong third-quarter performance with revenues outperforming the market and production volumes rising 2.2%.

The company said it expected full-year revenues to outperform global light vehicle production volumes by around 2%. The board intends to recommend a final dividend subject to market conditions.

Homewares retailer Dunelm (DNLM) said it would shutter its stores after homewares was ‘unexpectedly’ not added to the essential retail list that would allow the company's stores to operate as England goes into a one-month lockdown. Shares gained 0.2% to £14.

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Issue Date: 05 Nov 2020