London close: Stocks finish firmer as EU Covid summit kicks off
London stocks managed to close in positive territory on Friday, as investors eyed an EU summit in Brussels to discuss a coronavirus rescue fund.
The FTSE 100 ended the session up 0.63% at 6,290.30, and the FTSE 250 managed gains of 0.15% to close at 17,347.93.
“It has been a quiet trading session as the much-awaited EU summit to discuss the rescue fund began today,” said CMC Markets analyst David Madden.
“It has been proposed that the bloc’s €750 billion rescue package will be divided up as follows, €500bn in grants and €250bn in loans.
“The Netherlands, and a few other nations are against the idea of such a big percentage of the fund being dished out as grants without any conditions.”
Madden said that on the other side of the debate, countries such as Italy - which have been hit hard by the health crisis - would prefer it if a larger portion of grants were issued.
“The eurozone was already lagging behind the UK and the US in terms of economic health before the pandemic stuck, so if action isn’t taken quickly, that is likely to add to its problems.
“The old north-south divide is alive and well in continental Europe - the region has a track record of limping for one crisis to another, but in the end, some sort of compromise is usually reached.
“The political wrangling is likely to be intense, and dealers are not optimistic about a quick resolution, hence why stocks are showing modest gains.”
Market participants were also mulling the latest results from Netflix, whose shares fell overnight after second-quarter earnings per share missed expectations but revenue beat.
In addition, the streaming giant’s subscriber growth guidance for the third quarter failed to impress.
Despite the positive tone in markets, worries about the coronavirus outbreak continued to weigh on sentiment after cases in the United States rose by 75,000 in 24 hours, marking a fresh daily record.
“It’s a continuation of the push-pull factors influencing stocks,” said Russ Mould, investment director at AJ Bell.
“On one hand there is ongoing nervousness about the pandemic and localised flare-ups.
“On the other hand, there is the hope of more stimulus measures until there is firm evidence that the pandemic is under control and economies are getting back on track.”
In equity markets, Homeserve rose 3.61% after saying it expected a solid performance in the current financial year as the home repair company indicated trading was picking up well after Covid-19 lockdowns.
Iron ore miner Rio Tinto was up 2.45% in London after it reported a 1.5% rise in second-quarter iron ore shipments and said demand from China was improving as the country’s economy recovers from the pandemic.
Asset manager Ninety One was 2.1% higher as it said assets under management rose to £118bn as at 30 June from £103.4bn at the end of March.
Renishaw surged 10.16% after the engineer lifted its full-year revenue expectations but downgraded its expectations for statutory pre-tax profit.
Sales, marketing and support services group DCC was 0.34% firmer as it said trading in the first quarter was better than it expected but down on the year before because of Covid-19 lockdown restrictions.
Essentra closed flat after saying it has reached a settlement with the US Department of Justice and will pay a $666,543 cash penalty related to unauthorised transactions dating back to 2018 by two employees of its subsidiary, Essentra FZE, and linked to North Korea.
On the downside, British Airways and Iberia owner IAG was 2.32% weaker after BA announced late on Thursday that it was retiring all of its Boeing 747s as the travel industry takes a hit from the pandemic.
Market Movers
FTSE 100 (UKX) 6,290.30 0.63%
FTSE 250 (MCX) 17,347.93 0.15%
techMARK (TASX) 3,829.49 1.80%
FTSE 100 - Risers
Fresnillo (FRES) 1,091.50p 4.55%
AstraZeneca (AZN) 9,187.00p 3.88%
Homeserve (HSV) 1,350.00p 3.61%
BHP Group (BHP) 1,799.40p 2.86%
Hikma Pharmaceuticals (HIK) 2,258.00p 2.82%
SSE (SSE) 1,436.00p 2.79%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,404.00p 2.66%
Intermediate Capital Group (ICP) 1,401.00p 2.56%
Rio Tinto (RIO) 4,941.00p 2.45%
Smith & Nephew (SN.) 1,641.00p 2.43%
FTSE 100 - Fallers
WPP (WPP) 608.20p -2.56%
ITV (ITV) 66.82p -2.45%
International Consolidated Airlines Group SA (CDI) (IAG) 218.90p -2.32%
Barclays (BARC) 116.06p -1.84%
HSBC Holdings (HSBA) 379.55p -1.57%
Royal Dutch Shell 'A' (RDSA) 1,303.20p -1.47%
Hargreaves Lansdown (HL.) 1,560.00p -1.39%
Associated British Foods (ABF) 1,919.50p -1.39%
Compass Group (CPG) 1,135.00p -1.35%
Whitbread (WTB) 2,314.00p -1.28%
FTSE 250 - Risers
AO World (AO.) 161.00p 13.05%
Aston Martin Lagonda Global Holdings (AML) 57.50p 11.76%
Renishaw (RSW) 4,880.00p 10.16%
FirstGroup (FGP) 35.26p 8.69%
RHI Magnesita N.V. (DI) (RHIM) 2,652.00p 6.94%
Go-Ahead Group (GOG) 726.50p 5.29%
Telecom Plus (TEP) 1,396.00p 4.49%
Hammerson (HMSO) 78.80p 4.40%
Capita (CPI) 39.16p 4.37%
Spirent Communications (SPT) 265.00p 4.33%
FTSE 250 - Fallers
Bank of Georgia Group (BGEO) 896.00p -6.96%
TI Fluid Systems (TIFS) 178.60p -4.80%
Pagegroup (PAGE) 364.60p -4.05%
Euromoney Institutional Investor (ERM) 817.00p -3.88%
Micro Focus International (MCRO) 294.00p -3.86%
Hays (HAS) 120.20p -3.84%
Syncona Limited NPV (SYNC) 254.00p -3.79%
Fisher (James) & Sons (FSJ) 1,298.00p -3.72%
PayPoint (PAY) 555.00p -3.31%
easyJet (EZJ) 663.00p -3.24%