Weekly review

The FTSE 100 ended the week 31.25 points higher, closing at 6,969.81 on Friday.

Equity view

AstraZeneca said it expected performance to accelerate as the drugs company reported "robust" revenue growth for the first quarter. Revenue increased 15% to $7.3bn in the three months to the end of March, or by 11% excluding currency movements. At constant currency and excluding the Covid-19 vaccine revenue rose 7% to $7.05bn.

Valve and instrumentation maker Rotork said first quarter performance continued to improve in line with expectations despite the impact of the Covid-19 pandemic. The company on Friday said revenue was up mid-single digits year-on-year on an organic constant currency basis, in part reflecting the weighting of first half 2020 sales to the second quarter.

Hikma Pharmaceutical said it made a good start to 2021 and that annual revenue from generic treatments would be at the top of guidance. The FTSE 100 drugs company said its injectables business was performing well with product launches and general demand in the US partly offsetting reduced demand for Covid-19 related products and the gradual return of elective surgeries.

Smurfit Kappa reported first quarter corrugated volume growth of around 7% in both Europe and the Americas in its first quarter on Friday. The FTSE 100 packaging giant said containerboard prices had increased in the quarter, and again at the start of the second quarter, as a result of strong demand and higher recovered fibre and other costs.

NatWest's first-quarter profit rose 82% as the bank released money set aside for bad debts early in the pandemic. Operating pre tax profit for the three months to the end of March increased to £946m from £519m a year earlier as revenue dropped to £2.66bn from £3.16bn. The FTSE 100 bank wrote back £102m of impairment costs after taking an £802m charge in the first quarter of 2020.

St. James Place experienced an "exceptional" start to the year as investors piled their accumulated savings into longer-term investments. Activity was further boosted by tax year-end planning, the asset manager said.

Unilever announced a €3bn (£2.2bn) share buyback as the consumer goods company predicted first-half sales growth near the top of its target range. Underlying sales rose 5.7% in the first quarter and turnover fell 0.9% to €12.3bn, the FTSE 100 group said in a trading update. Turnover declined because of currency movements, Unilever said.

Medical products supplier Smith & Nephew reinstated full year guidance after a rise in first quarter revenues driven by increased surgery volumes, acquisitions and new products. Revenue for the three months to April 3 came in at $1.26bn, up 11.5% on a reported basis and 6.2% on an underlying basis and including a 3.4% boost from foreign exchange and 1.9% from acquisitions.

London Stock Exchange said it had a good first quarter as it reported a 4% increase in its favoured profit measure driven by growth in data and analytics and capital markets transactions. Gross profit excluding currency fluctuations and a deferred revenue adjustment rose 4% to £1.54bn in the three months to the end of March from a year earlier as total income excluding recoveries rose 3.9% to £1.68bn.

Precious metals miner Fresnillo announced in-line first quarter production of gold and silver and reiterated its full-year guidance. For the three months ending on 31 March, silver output was down 2.4% quarter-on-quarter at 12.6m ounces, dragged lower processed ore volumes at San Julian and lower ore grades at Saucito and at the Pyrites plant, offset by higher development ore at Juanicipio.

Sainsbury's annual profit fell 39% as rising food sales were outweighed by higher costs during the Covid-19 crisis but the company kept its annual dividend unchanged. The UK's second-biggest grocer's underlying pretax profit fell to £356m in the year to 6 March from £586m a year earlier, broadly in line with guidance for at least £330m. Sainsbury's swung to a statutory pretax loss of £261m from a profit of £255m a year earlier.

Reckitt reported a “good start” to the year on Wednesday, with group like-for-like net revenue rising 4.1% to £3.51bn. The FTSE 100 consumer products giant said the growth was driven by a focus on execution, continued investment and strong demand for its brands.

Halma has acquired North Carolina-based PeriGen, it announced on Tuesday, for $58m (£42m). The FTSE 100 company said PeriGen develops software to protect mothers and their unborn children by alerting doctors, midwives and nurses to potential problems during childbirth.

Ladbrokes and Coral owner Entain has made an improved offer of AUD$3.5bn (£1.95bn) for the wagering and media division of Australia’s Tabcorp. Tabcorp rejected offers valuing the unit at around AUD$3bn, with the board saying they did not adequately value the business.

IWG said occupancy at its serviced offices "stabilised" and then "improved modestly" towards the end of the first quarter. Over the three months to 31 March, open centre revenues were down 16.1% to £523.1m and pre-2020 sales fell 20.1% to £496.1m at constant currencies, with the firm pointing out that the year ago quarter saw the strongest start to a year ever.

Big Yellow said it had bought a site in London’s Kentish Town for £16.5m and would seek planning permission for a 68,000 sq ft self-storage centre on the site. The acquisition takes the number of stores in the group's pipeline to 14, of which eight have planning consent, the company said on Tuesday.

Tate & Lyle on Monday confirmed reports it was planning to sell a controlling stake in its primary products division to a “long term financial partner”. The 100-year-old firm said it believes that if a deal was completed it would enable Tate & Lyle and the new business “to focus their respective strategies and capital allocation priorities and create the opportunity for enhanced shareholder value”.

Morrisons and Dunelm said Paula Vennells stepped down as a non-executive director after presiding over a miscarriage of justice when she ran the Post Office. The FTSE 250 groups announced Vennells's departure in separate statements on Monday morning.

Educational publisher Pearson reported underlying first quarter revenue growth of 5% driven by demand for global online learning as it maintained annual guidance. The company on Monday said its online division revenue increased 25% with strong growth in Virtual Schools due to enrolment growth in the current school year in Partner Schools as well as in US district partnerships.

IMI shares rose to a near seven-year high after the company announced a £200m share buyback and raised its guidance for annual earnings. After group performance improved in the first quarter, the FTSE 250 company predicted earnings per share of between 81p and 87p a share - up from an earlier estimate of 75p to 82p. Organic revenue rose 7.7% in the three months to the end of March to £421m from a year earlier and 2.6% compared with the first quarter of 2019.

Economic news

House prices are surging back in the UK and the pace is set to pick up further in coming months, the results of a closely-followed survey revealed. Nevertheless, activity could slow, perhaps sharply, should unemployment jump at the end of 2021 as many economists were expecting.

Self-driving cars could be seen on British motorways later in 2021, the UK government announced on Wednesday. Drivers could soon be allowed to take their focus off the road via the car’s built-in screen during periods of slow-moving traffic, using automated lane-keeping system (Alks) technology that makes the car stay in lane and a safe distance from other vehicles.

Take-home grocery sales are continuing to grow, industry data showed on Tuesday, as the ongoing vaccine rollout and easing of lockdown restrictions boost demand. According to the latest grocery market share figures from Kantar, take-home grocery sales rose 5.7% over the 12 weeks to 18 April, as people returned to supermarkets. In the four weeks to 18 April, sales were ahead 6.5%.

British Airways CEO Sean Doyle believes that the company’s investment in refurbishing premium cabins will pay off with wealthy holiday makers buying premium seats. Doyle said he believed corporate travel would return after the coronavirus pandemic, “but exactly what shape that takes we’re not sure”.

A bid by Heathrow Airport to hike landing fees, in a bid to cover its pandemic losses, has been rejected by the Civil Aviation Authority, it was revealed on Tuesday. The capital’s largest airport had asked the regulator for an immediate adjustment of £800m to its regulatory asset base, and a total adjustment of £2.6bn by the end of 2021, which would have been recoverable through airport fees charged to airlines from 2022.

UK retail sales have grown at their fastest rate since 2018, a closely-watched industry survey showed on Tuesday, as non-essential shops start to reopen. According to the CBI’s April Distributive Trades Survey, a balance of +16% of retailers reported sales volumes as good for the time of year, a sharp improvement on March’s balance of -37% and the largest rise since June 2018.

UK shop prices continued to fall in April, industry data showed on Wednesday, although the rate of decline has started to ease. According to the latest BRC-NielsenIQ Shop Price Index, prices fell by 1.3% year-on-year in April.

Around 40% of solar panels used in the UK are from Chinese firms that have been accused of exploiting forced labour camps in the region of Xinjiang. According to an investigation by the Guardian, solar projects commissioned by the Ministry of Defence, the UK government’s Coal Authority, United Utilities and other leading renewable energy developers in the country have made deals with these firms.

Cannabis oil specialist Voyager Life is to make its market debut, it was confirmed on Monday, following a successful crowdfunding campaign earlier in 2021. The Scottish firm, which supplies CBD and hemp seed oil products, intends to float on the Aquis Stock Exchange Growth Market during the second quarter. Aquis is aimed at companies that want to go public but are too small to qualify for the London Stock Exchange’s more high profile junior market AIM.

Britain's pubs and restaurants made a solid start to post-lockdown trading in England after they were allowed to serve customers outdoors, a survey indicated. Like-for-like sales in the week to Sunday 18 April were 24% lower than two years earlier despite being limited to al fresco trading and being up against a strong comparator week, the Coffer CGA business tracker showed.

International events

Ripple chief executive officer Brad Garlinghouse said there is a lack of clarity in US regulations on cryptocurrencies. He said that lack of clarity was “frustrating”, adding that Washington has yet to provide guidelines for cryptocurrencies unlike other countries.

Germany's economy fell back into contraction at the start of 2021, weighed down by the hit to construction and services from a value-added tax hike in January. Also weighing on activity was the reimposition of Covid-19 mobility restrictions.

Chinese officials said that the country still depends on coal power for now and will use it as a point of “flexible adjustment”. “China’s energy structure is dominated by coal power. This is an objective reality,” said Su Wei,Deputy Secretary-General of the National Development and Reform Commission, according to the translation from mandarin by CNBC.

Total global spending on Covid-19 vaccines is projected to reach $157bn by 2025, revealed the latest report by US health data company IQVIA Holdings released on Thursday. IQVIA said it expects the first wave of Covid-19 vaccinations to reach about 70% of the world's population by the end of 2022. The report also factored in the booster shots that are likely to follow initial vaccinations every two years.

President Joe Biden will mark his first 100 days in office by setting out a $1.8tn (£1.3tn) family support plan that would transform the role of the government in society, according to reports. In his first joint address to Congress, Biden will propose universal preschool provision, two years of free community college, $225bn for childcare and monthly payments of at least $250 to parents, Associated Press reported. The president will say taxing the rich is the best way to grow the economy by helping poor and middle-class families.

Policymakers at the Federal Reserve acknowledged the strengthening economy but continued to emphasise that risks to the outlook remained. Key, the rise in inflation was largely a reflection of transitory factors, the Federal Open Market Committee said in its statement.

German business sentiment edged only marginally higher in April, data showed on Monday, after morale was held back by the third wave of Covid-19 infections to hit the continent. The ifo Business Climate Index rose to 96.8 in April from 96.6 in March, below consensus for 97.8.

Moderna's Covid-19 vaccine will be reviewed on 30 April by technical experts for possible WHO emergency-use listing, a World Health Organization spokesman told Reuters on Monday. "We are discussing the Moderna COVID-19 vaccine on Friday [...]," WHO spokesman Christian Lindmeier said.

Global military expenditure rose by 2.6% to $1.98trn last year despite some defence funds being reallocated to fight the Covid-19 pandemic, the Stockholm International Peace Research Institute said in a report issued on Monday. The 2.6% increase when compared to the spending level of 2019 came even as global gross domestic product shrank by 4.4%.

Orders in the US for goods made to last more than three years fell short of market expectations last month, but only as a result of weakness in the often volatile category of civilian aircraft. According to the Department of Commerce, so-called durable goods orders grew at a month-on-month pace of 0.5% to reach $256.32bn.