UK stocks closed in negative territory on Thursday as investors continued to weigh conflicting data on the pace of economic recovery and central bank policy.
The European central bank lowered the pace of its asset purchases but indicated it wasn’t in a hurry to tighten policy significantly.
Weekly jobless claims in the US hit their lowest level since March 2020, which followed a report on Wednesday that showed job openings hit a new high in July, indicating a tight labour market.
At the close the FTSE 100 index of leading shares was down 1% at 7,024 points and the FTSE 250 closed down 0.2% at 23,800 points.
CORPORATE NEWS
In company news, low-cost carrier EasyJet (EZJ) descended 9.5% to 714.5p as it announced plans for a £1.2 billion rights issue to strengthen the balance sheet and capitalise on long-term growth opportunities as the European aviation market recovers from the pandemic.
Buried within the statement was the news EasyJet recently rejected a takeover approach and that the potential bidder has since confirmed that it is no longer considering an offer for the budget airline.
Supermarkets operator Morrisons (MRW) dropped 0.3% to 291.5p as it reported a worse-than-expected 3.7% decline in second quarter like-for-like sales (ex-fuel) and a 37.1% drop in first half pre-tax profit to £105 million after absorbing £41 million of Covid-19 costs.
No dividend was declared in light of the takeover offers from CD&R and Fortress, with Morrisons reiterating that it is recommending CD&R’s offer of 285p per share.
The grocer also reiterated previous guidance for full year profit before tax and exceptionals including business rates paid to be higher than last year’s £431 million.
Betting firm 888 (888) cheapened 3.3% to 389p after agreeing to buy the international (non-US) business of William Hill from Caesars Entertainment at an enterprise value of £2.2 billion.
888 commented that the deal will ‘create a global online betting and gaming leader by bringing together two highly complementary businesses and combining two of the industry’s leading brands’.
Management regards the acquisition as ‘a transformational opportunity for 888 to significantly increase its scale, further diversify its product mix and accelerate the upward shift of its revenue growth profile’.
Animal genetics company Genus (GNS) slumped 7.6% to £54.50 despite reporting a 29% profits increase for the year to June 2021, as the company warned that volatility in the Chinese porcine market would create a short-term headwind in the current financial year with growth below the company’s medium-term goal.
OTHER RISERS AND FALLERS
Tech supplier Computacenter (CCC) gained 1.7% to £30.34 as it reported a 29.2% rise in first half revenue to £3.18 billion with pre-tax profit up 59.1% to £115.2 million.
The company also said it expects to beat its performance in the second half of 2020 and to achieve a 17th year of uninterrupted growth in earnings per share.
Scottish free-to-air broadcaster STV (STVG) gained 3.2% to 348.2p after unveiling a 35% increase in first half sales and a swing from a £4.9 million loss to a £8.5 million pre-tax profit.
STV also upped its dividend by 23% to 3.7p per share with net debt having fallen by 47% to £17.6 million.
Independent hospital operator Spire Healthcare (SPI) ticked up 0.4% to 237.5p as it reported a recovery in profit and revenue in the six months to 30 June but saw earnings fall short of 2019 levels thanks to Covid costs.
Sportswear chain JD Sports Fashion (JD.) softened 1% to £10.22, despite announcing the appointment of former Nike man Bert Hoyt as a non-executive director.
