London midday: FTSE pares gains as Sunak unveils fresh Covid relief package
London stocks had pared gains by midday on Tuesday as investors mulled the impact of England’s third national lockdown and news of a fresh £4.6bn package of Covid relief measures to help businesses get through it.
The FTSE 100 was up 0.2% at 6,585.85, holding up pretty well considering the backdrop.
Chancellor Rishi Sunak said earlier that firms in the retail, hospitality and leisure businesses will get one-off grants worth up to £9,000 each to help weather a lockdown set to last at least six weeks.
There is also a £594m discretionary fund to support other impacted businesses not eligible for the grants that might be affected by the latest restrictions. Sunak said the measures were designed to help firms get through the Spring period.
Neil Wilson, chief market analyst at Markets.com, said: "Although there is a lot of noise around this lockdown in the UK, the long-term narrative remains tentatively optimistic about vaccines allowing a return to relative normality by the spring.
"Whilst those of with children in school are disappointed that they are being asked to shoulder any of the burden, let alone see their lives upended again, the market is relatively comfortable with the fact Q1 is going to be tough."
In equity markets, Next surged after the retailer reported a smaller-than-expected drop in sales over Christmas and said online sales made up for almost all those lost in retail stores. In the nine weeks to 26 December, full price sales declined 1.1% on last year, coming in ahead of the retailer’s central guidance for an 8% drop in its October trading update.
Online sales during the period rose 38%, with UK online sales up 36%, while retail sales slumped 43%.
Softcat gained after it said trading has remained positive since its first-quarter statement in mid-November and that it is ahead of where it expected to be, amid strong demand from its public sector customers.
Iron ore pellet producer Ferrexpo was also sharply higher after announcing a special interim dividend of 13.2 US cents, reflecting "the strong operational and financial performance of the group in 2020, and strong balance sheet".
In broker note action, Aveva was boosted by an upgrade at Investec, while Royal Mail was lifted by an upgrade to ‘hold’ at Berenberg. British Land and TI Fluid Systems were hit by downgrades at Morgan Stanley and JPMorgan, respectively.
Market Movers
FTSE 100 (UKX) 6,585.85 0.21%
FTSE 250 (MCX) 20,698.81 0.78%
techMARK (TASX) 4,138.76 0.50%
FTSE 100 - Risers
Next (NXT) 7,342.00p 6.22%
Aveva Group (AVV) 3,459.00p 5.62%
Royal Dutch Shell 'A' (RDSA) 1,340.40p 2.93%
Royal Dutch Shell 'B' (RDSB) 1,292.20p 2.67%
BP (BP.) 260.50p 2.36%
Kingfisher (KGF) 281.50p 2.10%
Glencore (GLEN) 250.25p 1.98%
Ocado Group (OCDO) 2,406.00p 1.95%
B&M European Value Retail S.A. (DI) (BME) 532.40p 1.72%
Intermediate Capital Group (ICP) 1,752.00p 1.68%
FTSE 100 - Fallers
Associated British Foods (ABF) 2,171.00p -2.47%
British Land Company (BLND) 466.80p -1.89%
Pearson (PSON) 669.20p -1.85%
Smurfit Kappa Group (SKG) 3,516.00p -1.84%
Burberry Group (BRBY) 1,790.00p -1.62%
National Grid (NG.) 868.40p -1.61%
Melrose Industries (MRO) 174.70p -1.61%
Entain (ENT) 1,398.50p -1.51%
London Stock Exchange Group (LSE) 9,128.00p -1.45%
Experian (EXPN) 2,867.00p -1.44%
FTSE 250 - Risers
Softcat (SCT) 1,520.00p 8.57%
Ferrexpo (FXPO) 317.40p 7.16%
Hammerson (HMSO) 24.28p 5.02%
Aston Martin Lagonda Global Holdings (AML) 1,893.80p 4.86%
Provident Financial (PFG) 317.20p 4.82%
Cineworld Group (CINE) 64.24p 4.42%
National Express Group (NEX) 236.40p 3.68%
Avon Rubber (AVON) 3,280.00p 3.63%
FirstGroup (FGP) 70.20p 3.54%
Playtech (PTEC) 424.80p 3.43%
FTSE 250 - Fallers
Capita (CPI) 37.52p -3.07%
Rank Group (RNK) 133.60p -2.91%
Ascential (ASCL) 381.00p -2.51%
JTC (JTC) 548.00p -2.14%
Henderson Smaller Companies Inv Trust (HSL) 1,022.00p -2.11%
BMO Commercial Property Trust Limited (BCPT) 79.70p -2.09%
BlackRock Smaller Companies Trust (BRSC) 1,690.00p -1.63%
ICG Enterprise Trust (ICGT) 926.00p -1.49%
Computacenter (CCC) 2,422.00p -1.38%
Contour Global (GLO) 214.00p -1.38%