UK stocks carried on climbing on Tuesday as investor sentiment continued to be buoyed by yesterday’s positive vaccine news.

The benchmark FTSE 100 index was up 1.27% to 6,260, following on from yesterday’s 5% gain with the market optimistic over the possibility that a return to normality could potentially be within reach by Spring next year.

The more domestically focused FTSE 250 also continued its gains, rising 0.76% to 18,995.

Stocks beaten down in the wake of the pandemic continued to rise with aircraft engine maker Rolls-Royce the top gainer on the FTSE for the second day in a row. A slightly higher open for the S&P 500 was also implied by US futures markets.

CORPORATE NEWS

In company news, Persimmon (PSN) said it will pay a further interim dividend just before Christmas as house sales continued to go well in the third quarter.

The FTSE 100 housebuilder said it will pay a 70p per share payment on 14 December, replacing the 110p final dividend for last year that had been withheld due to the coronavirus.

Persimmon said that trading had remained strong since the first UK lockdowns were lifted in the summer, with average private weekly sales rates per site for the third quarter 38% ahead of 2019, only slightly down from the 49% reported in August.

Persimmon shares declined 4.7% to £26.57.

Distribution firm DCC (DCC) gained 0.6% to £56.36 as it raised its interim dividend and said it ‘remains very active from a development perspective’ despite COVID-19 disruption. The sales, marketing and support services group announced a distribution of 51.95p per share, 5% higher than last year.

Premier Foods (PFD), the maker of Oxo stock cubes and Bisto gravy, on Tuesday raised its full-year trading profit outlook for the second time as it expects stronger demand for its brands during pandemic-led government restrictions on eating out.

The Mr Kipling cakes maker said trading profit rose 28.7% to £65.8 million for the 26 weeks ended 26 September, ahead of a company-supplied consensus of £62 million, as more people cooked at home during the lockdown.

But Premier shares fell 5.6% to 97.23p, reflecting the strong run for the stock since May.

ELSEWHERE ON THE MARKETS

Aero-parts engineer Meggitt (MGGT) jumped 4.7% to 393p after it said it expected to make underlying operating profit of between £180 million and £200 million in 2020.

This is despite the slump in travel markets due to the pandemic.

British property developer Land Securities (LAND) rallied 6.7% to 686p despite posting a bigger first-half pre-tax loss as rent payments were hit by a raft of store closures and fall in consumer demand due to Covid-19 restrictions.

The company said its loss before tax in the six months to 30 September widened to £835 million from a loss of £147 million a year earlier.

Motor insurer Direct Line (DLG) posted lower premiums due to weak car sales in the face of the pandemic crisis, but said premium growth in its roadside rescue and recovery service business Green Flag returned to pre-pandemic levels.

Direct Line's gross written premiums for the third quarter dipped 0.8% to £851.5 million, with its biggest segment - motor insurance - recording a 2.3% drop.

Shares in the insurer fell 2% to 285.4p.

Fund management giant Schroders (SDR) aims to raise £250 million by floating its new British Opportunities Trust fund next month that will inject equity into high growth companies hit by the coronavirus pandemic.

Schroders believes that the coronavirus pandemic, and other economic factors, are having a dramatic effect on many companies in Britain, creating a ‘once in a generation’ need for new equity, the company said.

Schroders shares gained 1.87% to £30.53.

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Issue Date: 10 Nov 2020