UK shares finished Tuesday strongly as investors shook off inflation and interest rate fears and kept their attention focused on a vaccine-led economic recovery.

Blue-chip stocks briefly turned negative in afternoon trading as US stocks opened down on another rise in bond yields, demonstrating lingering concern over inflation and a rise in interest rates.

The Dow Jones index was a notable faller, down 0.4% with the bond yield situation dampening enthusiasm, though reassurances from the US Federal Reserve seem to have calmed investors somewhat.

The UK’s benchmark FTSE 100 index closed 0.53% higher to 6,772.12, while the midcap FTSE 250 index finished 0.65% higher at 21,574.44.

SPECIAL DIVIDEND IN THE POST

In company news, Royal Mail (RMG) added 2% to 520p after saying it would pay a one-off dividend for the year ending March following recent upgrades to its financial outlook on the back of a surge in parcel demand during the pandemic and a recent pick-up in letter volumes.

Tobacco giant Imperial Brands (IMB) fell 1% to £14.96 even after maintaining its full-year adjusted profit growth forecast, as it expected "significantly reduced" losses from next generation products and increased investments in its business.

Power utility SSE (SSE) dropped 1.5% to £14.34 despite having reiterated annual earnings guidance after a worse-than-expected impact from weather conditions was offset by a smaller-than-expected hit from Covid-19.

SSE reaffirmed its guidance for adjusted earnings per share in the year through March of between 85p and 90p.

Water utility Pennon (PNN) fell back 2.5% to 968.4p on announcing it’s continuing to narrow down potential investment opportunities, having recently reaped £3.7 billion from the sale of Viridor.

Pennon reiterated that it may return a substantial amount of capital to shareholders, should it not find an attractive investment target.

Property stocks were well bid with retail sector specialist Hammerson (HMSO), which part-owns London’s Brent Cross shopping centre along with a bunch of other malls, up 7.6% to 36p.

Student accommodation developer Unite (UTG) firmed 0.7% to £10.78 after it sold a portfolio of eight properties for £133 million to Aventicum Real Estate.

The disposal portfolio, comprising 2,284 beds included assets in Coventry, Wolverhampton, Birmingham, Exeter and Manchester.

AIM ROUNDUP

AIM-listed conferencing platform LoopUp (LOOP:AIM) jumped 19.2% to 87p after reporting on its topsy-turvy 2020.

The company posted a stonking 239% jump in earnings before interest, tax, depreciation and amortisation to £15.3 million on revenues up 18% at £50.2 million, but with a marked second half slowdown.

Secure payments and customer contact solutions firm Eckoh (ECK:AIM) rallied 9.8% to 70.8p after bagging a $1.35 million contract with a US healthcare operation.

Specialist brick manufacturer Michelmersh Brick (MBH:AIM) added 4.1% to 141.6p even as it booked a 17% fall in annual profit after the Covid-19 pandemic slowed construction activity and disrupted manufacturing operations. Michelmersh Brick, however, more than doubled its dividend, citing a strong cash position.

Investment bank and broker Numis (NUM:AIM) gained 2.8% to 390p on guiding for a more than 75% jump in first-half revenue.

Packaging company MPAC (MPAC:AIM) fell 6% to 514pafter it reported a 46% fall in annual profit as the pandemic hit sales, though it said demand rebounded in the second half.

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Issue Date: 30 Mar 2021