London close: Stocks fall, pound rallies as Covid cases continue decline
London stocks closed in the red on Tuesday as investors waded through a raft of earnings, with consumer goods giant Reckitt pacing the decline after disappointing results, as Covid-19 case numbers continued to drop.
The FTSE 100 ended the session down 0.42% at 6,996.08, and the FTSE 250 was off 0.24% at 22,877.01.
Sterling was in positive territory, meanwhile, last rising 0.48% on the dollar to $1.3885, and gaining 0.26% against the euro to trade at €1.1737.
“In the UK, we have continued to see case numbers decline, with a week-on-week drop of 21.5% raising confidence in the economic recovery,” said IG senior market analyst Joshua Mahony.
“However, Boris Johnson’s reminder to not jump to ‘premature conclusions’ highlights the fears of a surge as last week’s reopening efforts come into play.”
Mahony said market sentiment appeared to be improving for the pound, with the currency rising to a 12-day high against the dollar and euro.
“That optimism has also led to an impressive outperformance for the domestic UK-focused bus companies, with many hoping that this decline in Covid cases will ensure restrictions can remain at bay as businesses get back to normal.”
On the economic front, the latest survey from the Confederation of British Industry showed retail sales rose strongly in July but stocks fell to a record low and are set to dip further amid supply problems.
Sales rose at a rate well above the long-run average in the year to July and orders grew at their fastest pace since December 2010 as the economy picked up, the business lobby group said, adding that sales were expected to grow again in August with order growth slowing slightly.
Across the distribution sector, stock levels compared with expected sales reached a survey low for the second month running.
Retail, wholesale and motor sectors all reported stocks as too low, with store shelves left thinly stocked with Brexit and the pandemic combining to create a shortage of lorry drivers and some goods.
“While demand may be more stable, operational issues worsen,” said Ben Jones, the CBI's principal economist.
“Relative stock levels are at a record low and expected to fall further still, while the number one worry for many firms at the minute is labour shortages throughout the supply chain as staff self-isolate.”
In equity markets, consumer goods giant Reckitt slid 8.43% after saying it swung to a loss in the first half as it wrote down the value of its infant formula and China Nutrition assets.
Online greeting card company Moonpig also fell, losing 9.44% after saying it had doubled revenue and profits in its maiden results as a listed company, but warned of a drop in sales in the coming months as Covid restrictions were eased.
Ascential lost 6.47% after it raised £153m in a placing to provide the group with greater balance sheet flexibility.
The shares were placed 432p, which was a 4.9% discount to the closing share price on Thursday.
Games Workshop retreated 5.59% even as the miniature wargames manufacturer posted a jump in full-year profit and revenue and lifted its dividend as it continued to benefit from increased interest in its miniature figures since Covid restrictions were put in place.
On the upside, speciality chemicals company Croda jumped 5.62% after it said annual profit was set to be well ahead of expectations and reported record results for the first half.
Just Eat Takeaway gained 3.77% after Cat Rock Capital - one of its largest shareholders - said the company should explore combinations with other global players and consider selling non-core assets if it wants to defend itself against a potential hostile takeover.
Irish convenience food group Greencore rallied 3.34% as it lifted annual profits guidance after a strong third quarter, as Covid lockdown measures were relaxed.
FTSE 100 - Risers
Croda International (CRDA) 8,266.00p 5.62%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,240.00p 3.77%
Smith (DS) (SMDS) 426.90p 1.38%
Rolls-Royce Holdings (RR.) 98.27p 1.29%
United Utilities Group (UU.) 1,054.50p 1.01%
Smurfit Kappa Group (CDI) (SKG) 4,049.00p 1.00%
Experian (EXPN) 3,128.00p 0.90%
Admiral Group (ADM) 3,344.00p 0.90%
Tesco (TSCO) 234.40p 0.86%
Sainsbury (J) (SBRY) 281.60p 0.72%
FTSE 100 - Fallers
Reckitt Benckiser Group (RKT) 5,721.00p -8.43%
Scottish Mortgage Inv Trust (SMT) 1,279.00p -4.31%
Intermediate Capital Group (ICP) 2,179.00p -3.49%
Informa (INF) 487.00p -2.60%
Prudential (PRU) 1,336.50p -2.20%
Legal & General Group (LGEN) 259.90p -2.03%
Aveva Group (AVV) 3,914.00p -1.91%
Whitbread (WTB) 3,034.00p -1.72%
ITV (ITV) 119.00p -1.57%
Pershing Square Holdings Ltd NPV (PSH) 2,550.00p -1.54%
FTSE 250 - Risers
Mitie Group (MTO) 66.50p 6.23%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,240.00p 3.77%
Greencore Group (CDI) (GNC) 133.20p 3.34%
TUI AG Reg Shs (DI) (TUI) 337.90p 3.33%
Trustpilot Group (TRST) 365.40p 3.12%
CLS Holdings (CLI) 249.00p 2.87%
Trainline (TRN) 331.60p 2.79%
SSP Group (SSPG) 252.70p 2.52%
TP Icap Group (TCAP) 198.64p 2.37%
Meggitt (MGGT) 454.40p 2.25%
FTSE 250 - Fallers
Moonpig Group (MOON) 385.00p -9.33%
Ascential (ASCL) 424.40p -6.47%
Games Workshop Group (GAW) 11,140.00p -5.59%
Templeton Emerging Markets Inv Trust (TEM) 182.62p -4.89%
JPMorgan Emerging Markets Inv Trust (JMG) 124.40p -4.45%
Fidelity China Special Situations (FCSS) 342.00p -4.34%
Baillie Gifford US Growth Trust (USA) 337.50p -3.43%
Moneysupermarket.com Group (MONY) 254.00p -3.05%
Schroder Asia Pacific Fund (SDP) 575.00p -3.04%
Tullow Oil (TLW) 47.15p -2.90%