The FTSE 100 fell 0.73% to 6,626 in early trade on Thursday as another selloff in the bond market ignited concerns over inflation and the impact on equity markets.

It comes after Chancellor Rishi Sunak announced the first hike in corporation tax in nearly half a century in the Budget yesterday, as the Government looks to repair the public finances amid the pandemic.

The midcap FTSE 250 index also fell at the open, down 0.68% to 21,290.

The fall in UK stocks comes amid a wider selloff in equity markets, with the drop in Asian stocks particularly severe. Japan’s Nikkei 225 tumbled 2.13%, while the Hang Seng in Hong Kong plunged 2.15% and China’s Shanghai Composite dropped 2.05%.

In commodities, the selloff helped gold trade 0.52% higher to $1,717 an ounce, while Brent crude oil futures gained 1.03% to $64.60 per barrel.


In company news, insurer Aviva (AV.) gained 4.1% to 398.8p as it sold its remaining Italian life and general insurance businesses for €873 million, exiting the Italian market, with the sales expected to be completed in the second half of this year.

That came as it reported a fall in annual profit owing to the impact of Covid-19 and a fall in gross written premiums. For the year ended 31 December 2020, pre-tax profit fell to £2.57 billion from £3.82 million year-on-year as gross premiums fell to £29.02 billion from £29.71 billion.

The company declared a total dividend of 21p a share, up from 15.5p last year with a final proposed dividend of 14p per share.


Betting group Entain (ENT) fell 1.9% to £14.33 despite swinging to an annual profit as online growth and lower costs offset the impact of shuttered betting shops owing to the pandemic.

For the year ended 31 December 2020, pre-tax profit was £174.7 million from a loss of £164.4 million year-on-year as revenue was flat at £3.56 billion from £3.58 billion.

The Ladbrokes owner continued to keep its dividend suspended, citing ongoing uncertainty as a result of the pandemic. Looking ahead, the company said it had started the year with ‘good momentum in line with expectations and we hope to see normality returning over the coming months.’

Pest control company Rentokil Initial (RTO) dipped 0.8% to 472.9p as it reported growth in full year profit thanks to huge growth in demand in its hygiene business amid the pandemic.

Ongoing operating profit for the year to 31 December 2020 rose 5.4% to £383.3 million, with revenue up 5% to £2.8 billion, driven by a 36% surge in revenue from its hygiene division, which provides specialist deep cleaning and industrial disinfection services.

CEO Andy Ransom said, ‘We have shown great agility by launching new disinfection services in 60 countries to address a critical need for customers, accelerated the international expansion of our Hygiene business and have acquired 23 high quality businesses to build density, particularly in our key North America Pest Control market.’


Value retailer B&M European Value Retail (BME) fell 1% to 538.8p despite upgrading its outlook on performance as revenue and margin remained ‘strong’ year to date.

The company now expects EBITDA, a measure of underlying business performance, for FY21 to be in the range of £590 million to £620 million, up from the previous range announced on 7 January 2021 of £540 million to £570 million.

Looking ahead, the company flagged significant forecasting challenges, which it said would persist well into the new financial year, citing the unknown impact of changes to restrictions in 2021.


Insurance company Admiral (ADM) edged 0.6% lower to £31.29 despite reporting that annual profit rose by a fifth as claims frequency fell with people driving less during lockdowns.

For 2020, pre-tax profit rose to £637.6 million from £522.6 million as turnover grew 2% to £3.55 billion. The company recommended a final dividend of 86p per share, up from 77p, taking the full year dividend up 12% to 156.5p.

Manufacturing firm Melrose Industries (MRO) gained 0.8% to 178.4p as it reported a near 20% fall in revenue for 2020 as a direct result of the Covid-19 crisis.

The group made an adjusted operating profit of £340 million in 2020, while the statutory operating loss was £338 million. Of the £678 million adjusting items, only £178 million were cash items, almost all related to restructuring. Strong cash generation resulted in group net debt reducing by over £400 million to £2.85 billion at the end of 2020.

Thread manufacturer Coats (COA) moved 1% higher to 64.5p as it reported a fall in annual profit owing to the impact of the pandemic, but reinstated its dividend citing an ‘encouraging’ recovery.

For the year ended 31 December 2020, pre-tax profit fell to $79.6 million from $166.8 million as revenue slipped 16% to $1.16 billion. The annual results included a stronger recovery in the second half of the year amid improving demand.

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Issue Date: 04 Mar 2021