UK markets were mixed in early trade on Tuesday in the face of rough jobs data, with residual optimism left over from yesterday’s vaccine-led 900-point surge from the Dow Jones in the US.
The benchmark FTSE 100 saw its opening 40 point rally ebb away to fall into the red. At 9.30am, the FTSE 100 had slipped around 0.3% to 6,031.23, although the midcap FTSE 250 clung on to its near 1% hike at 16,397.69.
Dismal jobs data will give investors plenty to mull over on Tuesday. It may have taken a while to filter through, but now the UK is starting to see the same kind of horrific jobs pressure as the US, with the claimant count change for April up 856,500, even worse than gloomy forecasts.
March’s increase was around 5,400, while analysts were forecasting an increase of 675,000 for last month.
CORPORATE NEWS
Tobacco giant Imperial Brands (IMB) slumped 6.6% to £15.43 as it cut its dividend by a third and booked a weaker first half profit. Both vaping and tobacco volumes fell.
Food services company Compass (CPG) was also in the wars, down 2% at £1.31 after it launched a £2bn equity fundraise to boost its liquidity. The £18bn company has also pulled its full year guidance having reported lower half year profit.
The placing price was being determined via a bookbuild process, Compass said.
The mining sector was also under pressure after copper miner Antofagasta (ANTO) decided to slash its 2019 final dividend to $0.071 per share, down from the $0.24.4c previously indicated.
That news dragged on gold and silver producer Fresnillo (FRES), which fell 2.8% to 782.8p.
Airlines rallied to the top of the FTSE leader board on Tuesday, offering a brief respite for embattled sector investors. BA-owner International Consolidated Airlines (IAG) led, rallying more than 9% to 205.2p. Discount flyers EasyJet (EZJ) and Ryanair (RYA) were also firmly higher, up close on 5% and 3.5% respectively at 577.4p and €10.12.
RE-CALCULATING THE BOOKS
Enterprise software company Micro Focus (MCRO) rallied 7.6% to 454.2p, even as it warned of potential asset writedowns, after its constant currency revenue slumped 11% in the first half of its financial year.
Flooring retailer Topps Tiles (TPT) dropped 2.4% to 37.1p as it swung to a first-half loss after its revenue slipped due to the Covid-19 crisis and a tough trading environment before the pandemic hit.
Topps Tiles scrapped its interim dividend and said it was unlikely to pay a final dividend, too.
Healthcare services provider UDG Healthcare (UDG) gained 3.5% to 645p as its interim profit more than doubled, though it warned its performance in the second half would be impacted by the Covid-19 crisis.
Cleaning products provider McBride (MCB) rallied 12% to 64.27p, having upgraded its annual profit guidance as it continued to experience heightened demand for cleaning products, though off an earlier peak.
Adjusted pre-tax profit for the year through June was expected to be around 15% ahead of currently market expectations, McBride said.
Wind farm investor The Renewables Infrastructure Group (TRIG) shed 1.7% to 125.2p after it launched a share issue to pay down debt and fund potential acquisition opportunities.
New shares in the company would be issued at 120p per share, representing a 5.8% discount to their closing price on Monday.
SMALLCAP WRAP
Rental property and student accommodation focused developer Watkin Jones (WJG) firmed 3.9% to 156.4p as it reported a 19% rise in first-half profit, but acknowledged the gains were largely made before the Covid-19 crisis hit.
Watkin Jones said it had gradually been able to reopen most of its development sites.
Technology supplier to the gambling and broadcast industries Quixant (QXT:AIM) leapt 27% to 114.5p, having noted positive signs of recovery emerging in global gambling markets.
