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London open: Stocks little changed amid Covid worries; BP, HSBC in focus

By Michele Maatouk

Date: Tuesday 27 Oct 2020

London open: Stocks little changed amid Covid worries; BP, HSBC in focus

(Sharecast News) - London stocks were little changed in early trade on Tuesday as investors weighed up encouraging earnings from the likes of BP and HSBC against ongoing concerns about the Covid-19 pandemic and doubts about US stimulus.
At 0840 GMT, the FTSE 100 was up 0.1% at 5,795.29.

CMC Markets analyst Michael Hewson said: "While the prospect of a delay to new US stimulus measures is spooking investors in the US, events in Europe aren't looking particularly rosy either, with events in France, Spain and Italy suggesting that the virus is starting to run out of control again, as infection rates accelerate exponentially, and hospital admission rates start to rise sharply.

"This has raised the prospect that governments might even consider going down the full lockdown route again, a move that would be economically ruinous even if further fiscal help was available, which at the moment it clearly is not.

"Whether politicians are prepared to acknowledge it or not, the reality is dawning that there are no longer any good solutions when it comes to the next steps, only varying degrees of difficult ones. It is clear the virus isn't going away, and it is also becoming clear that further lockdowns would exact a ruinous price on populations that are becoming increasingly worn down by the fragmented and sometimes incoherent government policy responses."

In equity markets, HSBC was sitting pretty at the top of the FTSE 100 after saying it planned to move to a fee-based businesses model as it unveiled a less-than-expected 35% fall in third quarter profits. Pre-tax profit for the three months to 30 September came in at $3.1bn, compared with a $2.07bn average of analysts' estimates compiled by the bank.

HSBC also said that losses from bad loans were forecast to be at the lower end of the $8bn to $13bn range set out earlier this year.

Other banks followed suit, with Standard Chartered, Lloyds, NatWest and Barclays all higher, while the FTSE 350 banks index was up 3.6%.

Oil giant BP rallied as it turned in a profit of $0.1bn on a replacement cost basis, despite a "significantly" lower result in its oil trading arm, following the prior quarter's $6.7bn loss.

Whitbread was also in the black even as the Premier Inn owner revealed that it swung to a loss in the first half after its hotels were closed due to the coronavirus lockdown.

EasyJet flew higher after saying it had raised $398.6m (£305.7m) from the sale and leaseback of nine aircraft to bolster finances hammered by the coronavirus pandemic.

On the downside, contracts-for-difference platform Plus500 was firmly in the red despite reporting a jump in third-quarter revenue and earnings amid market volatility, and saying that results for the year were set to be line with market expectations.

Traders pointed to the fact that while customer income during the quarter was the second highest quarterly level in the company's history, it was down from the record peak levels achieved in the second quarter, with the gradual reduction from continuing into Q4.

Flutter Entertainment was knocked lower by a downgrade to 'sector perform' at RBC Capital Markets following a strong run.

Market Movers

FTSE 100 (UKX) 5,795.29 0.06%
FTSE 250 (MCX) 17,817.82 -0.20%
techMARK (TASX) 3,718.45 -0.22%

FTSE 100 - Risers

HSBC Holdings (HSBA) 337.40p 5.65%
Whitbread (WTB) 2,302.00p 2.58%
BP (BP.) 203.90p 1.95%
Standard Chartered (STAN) 400.10p 1.73%
Rolls-Royce Holdings (RR.) 229.60p 1.55%
Lloyds Banking Group (LLOY) 29.49p 1.51%
NATWEST GROUP PLC ORD 100P (NWG) 123.75p 1.39%
Barclays (BARC) 111.58p 0.96%
Johnson Matthey (JMAT) 2,350.00p 0.82%
AstraZeneca (AZN) 8,132.00p 0.68%

FTSE 100 - Fallers

M&G (MNG) 162.20p -2.44%
Smiths Group (SMIN) 1,402.50p -1.92%
Kingfisher (KGF) 303.10p -1.72%
St James's Place (STJ) 913.80p -1.70%
Anglo American (AAL) 1,924.00p -1.58%
InterContinental Hotels Group (IHG) 3,976.00p -1.41%
SSE (SSE) 1,327.00p -1.41%
Persimmon (PSN) 2,480.00p -1.39%
Rio Tinto (RIO) 4,424.50p -1.38%
Flutter Entertainment (FLTR) 12,330.00p -1.36%

FTSE 250 - Risers

XP Power Ltd. (DI) (XPP) 4,440.00p 4.96%
Coats Group (COA) 61.90p 3.17%
Frasers Group (FRAS) 401.00p 2.24%
Virgin Money UK (VMUK) 94.62p 1.98%
Cineworld Group (CINE) 27.05p 1.92%
AVI Global Trust (AGT) 760.00p 1.88%
TUI AG Reg Shs (DI) (TUI) 299.70p 1.87%
Impax Environmental Markets (IEM) 395.00p 1.28%
TR Property Inv Trust (TRY) 373.50p 1.22%
easyJet (EZJ) 525.60p 1.15%

FTSE 250 - Fallers

Plus500 Ltd (DI) (PLUS) 1,517.50p -6.38%
Helios Towers (HTWS) 161.20p -2.42%
RHI Magnesita N.V. (DI) (RHIM) 2,724.00p -2.01%
Capita (CPI) 24.85p -1.86%
Babcock International Group (BAB) 242.80p -1.58%
Kaz Minerals (KAZ) 570.20p -1.52%
Aggreko (AGK) 454.80p -1.43%
Synthomer (SYNT) 388.00p -1.42%
Wetherspoon (J.D.) (JDW) 931.50p -1.38%
Network International Holdings (NETW) 215.80p -1.37%

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