UK stocks fell into negative territory by midday on Thursday as markets trade cautiously ahead of the European Central Bank’s latest policy decision this afternoon.
The slow pace of the vaccine rollout across the Eurozone has fueled concerns its economic recovery is falling behind, with bank officials set to decide whether rising government-bond yields across the globe threaten the region’s virus-stricken economy.
The ECB will also release its latest economic forecasts, after it emerged they’re set to take a cautious view about inflation prospects. Analysts aren’t expecting any policy changes from the ECB.
Just after 12pm, the UK’s benchmark FTSE 100 index had reversed earlier gains and fell 0.29% to 6,705, while the midcap FTSE 250 index had gained 0.34% to 21,479.
RECORD ROLLS LOSS
In company news, Rolls Royce (RR.) shares rose 1% to 114p 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) gained 0.5% to 177.9p 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 7.6% higher to 255.5p 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 0.7% to £12.54.
Online train ticket platform Trainline (TRN) gained 1.7% to 488.8p 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) dipped 0.6% to £32.90 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 8.3% higher to 756p 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.