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London close: FTSE finishes higher after turbulent session

By Josh White

Date: Tuesday 22 Sep 2020

London close: FTSE finishes higher after turbulent session

(Sharecast News) - London's top-flight index closed in positive territory on Tuesday, steadying after heavy losses in the previous session as investors mulled updates from the likes of Kingfisher and Whitbread.
The FTSE 100 ended the session up 0.43% at 5,829.46, while the FTSE 250 was down 0.29% at 16,821.66.

Sterling was weaker during afternoon trading, however, last falling 0.6% on the dollar to $1.2740, and losing 0.08% against the euro to €1.0879.

"There was some indecision in the first few hours of trading as stocks got off to a strong start, before giving up some of their gains, but the positive momentum continued throughout the session," said CMC Markets analyst David Madden.

"The FTSE 100 was the most volatile European index today as the UK government announced tighter restrictions in a bid to tackle the health crisis."

Madden noted that stocks in London gained ground in the wake of the update, as the rules weren't as tough as some had been fearing.

"The restrictions have more to do with social distancing and health precautions, and the economic impact is unlikely to be as bad as initially thought.

"European stocks took a beating yesterday and it seems the bargain hunters have been out in force today."

The main index had lost more than 3% on Monday, amid worries about rising coronavirus cases and tighter restrictions.

Prime Minister Boris Johnson announced fresh restrictions during the afternoon, including a 10pm curfew for pubs, bars and restaurants in England and table-service only.

The requirement to wear face masks was also extended to all retail staff, everyone in taxis or hire cars, and all staff and customers in indoor hospitality venues, other than when they are eating.

In addition, the amount of people allowed to attend weddings was halved to 15, although a maximum of 30 could still attend funerals, while the so-called 'rule of six' was being extended to all indoor adult team sports.

Meanwhile, cabinet secretary Michael Gove told Sky News that those who can work from home should in a shift from just a few weeks ago, when the government was urging workers to get back to the office.

"What a difference a month makes - only a few weeks ago we were being implored to get out and about to help out," said Neil Wilson, chief market analyst at Markets.com.

"It's almost like they don't know what they are doing.

"While pub shares fell on curfew news, several earnings reports today highlight the uneven nature of the recovery so far, and the uncertain path ahead."

Investors were also digesting the latest comments from Bank of England governor Andrew Bailey, who pretty much ruled out negative interest rates in the near future but left the possibility on the table.

In equity markets, B&Q owner Kingfisher rose 9.9% after it posted a 23.1% jump in first-half adjusted pre-tax profit thanks to a strong sales recovery in the second quarter.

British American Tobacco was up 3.8% and Imperial Brands added 3.21%, after an upgrade to 'outperform' from 'sector perform' at RBC Capital Markets.

Online supermarket Ocado rose 1.28% and food delivery service Just Eat Takeaway was in the black by 2.15%, as demand for both companies is expected to increase amid tighter Covid-19 restrictions.

British Airways and Iberia parent IAG reversed earlier gains to close up 4.94%, and engine maker Rolls-Royce was flat, after the pair fell on Monday amid concerns about the impact of further restrictions on the airline industry.

Pub chain JD Wetherspoon, which already suffered heavy losses on Monday amid expectations of a government-imposed curfew, closed up 1.42% even as boss Tim Martin announced that between 400 and 450 jobs will be cut from pubs at UK airports.

Mitchells & Butlers was 8.07% higher, having also tumbled a day earlier on news of further restrictions.

On the downside, Hikma Pharmaceuticals slumped 4.49% as it cut 2020 guidance for its generics business following another delay in approval for the asthma drug candidate it is developing with Vectura.

Hotel and restaurant chain Whitbread lost 2.69% as it said it was cutting 6,000 jobs after suffering a slump in trading due to the coronavirus pandemic.

The Premier Inn owner announced the 18% cut in its workforce as like-for-like sales plunged by more than 77% as it felt the full force of the lockdown from March to June.

Insurer Beazley fell 14.05% after it said Covid-19 claims were set to double from the $170m expected in April, mainly due to event cancellation losses.

The sector was also hit after the Financial Conduct Authority said it was consulting on a "radical" package that would mean loyal customers would not pay more for home or motor insurance than new customers.

RSA, Admiral, Direct Line, Moneysupermarket and Hiscox were all weaker, by 3.99%, 2.7%, 7.33%, 3.51% and 1.25%, respectively.

Market Movers

FTSE 100 (UKX) 5,829.46 0.43%
FTSE 250 (MCX) 16,821.66 -0.29%
techMARK (TASX) 3,716.34 -0.20%

FTSE 100 - Risers

Kingfisher (KGF) 290.90p 9.90%
International Consolidated Airlines Group SA (CDI) (IAG) 102.00p 4.94%
British American Tobacco (BATS) 2,733.00p 4.11%
NATWEST GROUP PLC ORD 100P (NWG) 96.46p 3.36%
Imperial Brands (IMB) 1,384.00p 3.21%
Royal Dutch Shell 'B' (RDSB) 996.10p 3.17%
Smiths Group (SMIN) 1,413.50p 3.14%
Royal Dutch Shell 'A' (RDSA) 1,033.80p 2.89%
Pearson (PSON) 497.40p 2.77%
BP (BP.) 242.00p 2.52%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 2,470.00p -4.49%
RSA Insurance Group (RSA) 452.90p -3.99%
Admiral Group (ADM) 2,700.00p -2.70%
Barratt Developments (BDEV) 432.60p -2.44%
Whitbread (WTB) 2,058.00p -2.42%
Prudential (PRU) 1,074.00p -2.36%
St James's Place (STJ) 910.40p -2.13%
Flutter Entertainment (FLTR) 11,615.00p -2.11%
Anglo American (AAL) 1,836.80p -2.11%
Berkeley Group Holdings (The) (BKG) 4,073.00p -2.07%

FTSE 250 - Risers

Network International Holdings (NETW) 295.00p 25.00%
Mitchells & Butlers (MAB) 127.40p 8.07%
Big Yellow Group (BYG) 1,064.00p 4.42%
GCP Student Living (DIGS) 133.60p 4.38%
Scottish American Inv Company (SAIN) 436.00p 3.81%
Close Brothers Group (CBG) 1,007.00p 3.79%
Calisen (CLSN) 154.15p 3.46%
Future (FUTR) 1,890.00p 3.17%
FirstGroup (FGP) 38.58p 2.93%
Capita (CPI) 28.03p 2.90%

FTSE 250 - Fallers

Beazley (BEZ) 335.20p -14.05%
Direct Line Insurance Group (DLG) 279.30p -7.33%
Chemring Group (CHG) 239.50p -4.77%
Provident Financial (PFG) 195.10p -4.55%
Morgan Sindall Group (MGNS) 1,156.00p -4.47%
Bellway (BWY) 2,080.00p -4.19%
Fisher (James) & Sons (FSJ) 1,140.00p -3.98%
PureTech Health (PRTC) 256.50p -3.93%
Ashmore Group (ASHM) 352.60p -3.71%
Liontrust Asset Management (LIO) 1,245.00p -3.53%

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