UK stocks accelerated losses at midday as fresh lockdowns and rising virus cases dampened hopes of a swift economic recovery.

The British economy will take more than two years to recover to its pre-coronavirus levels, according to a poll by Reuters, with more than 70 economists saying it would contract 1.4% this quarter.

The poll comes alongside figures from the Office for National Statistics that showed UK GDP fell 2.6% in November as the second wave of the Covid-19 pandemic took hold.

US investors are now pinning hopes on president elect Joe Biden’s $1.9 trillion coronavirus aid package getting passed by Congress.

At 12pm the benchmark FTSE 100 was 0.7% lower at 6,751 points while mid-caps were also down, the FTSE 250 falling 1.1% to 20,535.

BABCOCK BOMBSHELL

Contractor Babcock International (BAB) was one of the big losers on Friday, tumbling 16% to 221.4p after it dropped a bomb on the market by saying profits so far this financial year were down over a third. Its civil aviation arm had been inevitably hit hard by Covid.

Babcock was only beaten to top spot on the FTSE All-Share loser board by oil services group Petrofac (PFC) following fresh fraud charges were brought against employees, although not the company. Petrofac stock crashed 23% to 128.7p.

Engineering software company Aveva (AVV) topped the FTSE 100 leader board after it reported a strong end to the trading year. The stock jumped 5.7% to £37.6.

Pharmaceutical company Indivior (INDV) rallied 9% to 114.3p after it lifted its outlook on profit on expectations for higher revenue from drugs to treat opioid dependence.

The company said it now expected to deliver adjusted pre-tax income ahead of its previous expectations. Revenue was now expected to be in the range of $645 million to $650 million, compared with previous guidance of $595 million to $620 million.

OTHER NEWS

Tobacco giant British American Tobacco (BATS) said the Serious Fraud Office had ended its probe into suspicions of corruption activity carried out by the company, nudging the share price 0.2% up to £27.9.

The SFO would not be taking no further action, and the company said it was pleased the investigation, launched on 1 August 2017, had been discounted.

Engineering business Meggitt (MGGT) said it expects to deliver full year results for the group in line with guidance and that with the vaccine rollout it remains well placed for a recovery in 2021.

The UK supplier of aerospace, defence and energy markets said it expects underlying operating profit to be in the middle of the £180 million to £200 million range for the full year 2020, subject to audit, giving its share price a 1.8% lift 435.5p.

Pharmaceutical giant AstraZeneca (AZN) fell 0.1% to £75.5 after it said its non-small cell lung cancer drug Imfinzi had been approved in the European Union and the UK for an additional dosing option.

Property group Segro (SGRO) said it had collected 98% of all rents for the year ending 31 December 2020. As at 14 January, the company had received 88% of the £63 million of rent due in respect of UK rents payable in advance for the first quarter of 2021. Its shares  dipped 0.8% to 958.8p.

Shopping centre owner Hammerson (HMSO) said that James Lenton would step down as chief financial officer, unsettling investors and sending the stock 5.2% lower to 22.1p.

The Renewables Infrastructure Group (TRIG) said it has exchanged contracts to acquire an equity interest of 17.5% in the Beatrice offshore wind farm from Copenhagen Infrastructure Partners. The shares fell 0.5% to 125.6p.

Insurance company Hiscox (HSX) saw its shares initially fall up to 6% on news that the Supreme court had ruled in favour of the FCA and policy holders saying that insurers had to pay out for business interruption insurance.

The shares recovered the losses to trade up 2.5% after the company made a statement saying fewer than a third of its policy holders were affected by the ruling.

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Issue Date: 15 Jan 2021