(Alliance News) - Vaccine optimism had tempered by the European market open on Tuesday, with a soft start in London as investors turned their attention back to rising coronavirus infections for the immediate future.
The FTSE 100 index was down 8.87 points, or 0.1%, at 6,412.42 early Tuesday. The mid-cap FTSE 250 index was down 11.70 points, or 0.1%, at 19,596.35. The AIM All-Share index was up 0.5% at 1,012.57.
The Cboe UK 100 index was down 0.3% at 638.42. The Cboe 250 also was down 0.3%, at 16,898.75, and the Cboe Small Companies up 0.3% at 10,960.94.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both flat early Tuesday.
"After solid gains in the previous session on the back of Moderna's vaccine news investors are pausing for breath," said City Index's Fiona Cincotta.
European stocks surged on Monday after US biotech firm Moderna released early results from a clinical trial with more than 30,000 participants, showing its vaccine was 94.5% effective. This came a week after fellow US pharmaceutical company Pfizer and its German partner BioNTech said their vaccine has proved 90% effective.
Asian markets were mixed on Tuesday. The Japanese Nikkei 225 index ended up 0.4%. In China, the Shanghai Composite closed down 0.2%, while the Hang Seng index in Hong Kong closed up 0.1%.
Cincotta said: "The fact that there is now light at the end of the Covid tunnel and an exit strategy from this health crisis and economic crisis has given investors plenty to cheer. However, it is also impossible to ignore the current Covid backdrop."
Globally, infections have neared 55 million with more than 1.3 million deaths, and experts caution there are still difficult and dangerous months ahead.
In hard-hit Europe, curbs have returned from Greece to Britain. Sweden, which has drawn attention for a softer approach to combating the virus, decided Monday to ban gatherings of more than eight people for the first time.
UK Health Secretary Matt Hancock was unable to rule out an extension to the lockdown as a health chief warned the tiered system that ministers want England to return to may have to be strengthened.
Hancock said it was "too early for us to know" whether coronavirus cases will be brought down sufficiently to ease the second shutdown on December 2.
Boris Johnson hopes the nation will return to local restrictions, but Public Health England's Susan Hopkins – standing alongside Hancock at the Downing Street press conference on Monday – said the lowest tier of earlier measures had had "little effect".
The dollar was lower against major counterparts early Tuesday.
Sterling was quoted at USD1.3211, higher than USD1.3186 at the London equities close on Monday. The euro traded at USD1.1862 early Tuesday in London, higher than USD1.1840 late Monday. Against the yen, the dollar softened to JPY104.39 versus JPY104.57.
Gold was quoted at USD1,887.76 an ounce early Tuesday, lower than USD1,889.70 on Monday. Brent oil was trading at USD43.99 a barrel, down on USD44.40 late Monday in London.
In London, Homeserve shares rose 3.4% in opening trade. The home emergency repairs firm said it now sees full-year profit ahead of prior expectations following a better-than-expected first half.
Revenue for the six months to September 30 grew 17% to GBP536.7 million, but pretax profit slumped 49% to GBP10.1 million.
The fall in profit was due to the absence of exceptional gains recorded in the prior period, of GBP7.4 million, and higher acquisition-related amortisation of GBP23.0 million versus GBP16.3 million a year ago. Adjusted pretax profit was up 16% to GBP33.1 million.
Homeserve lifted its dividend by 7% to 6.2p.
Homeserve said it exited the first half with the business "trading well", having recovered "earlier and more strongly" from the first global lockdown than originally anticipated.
With the firm performing better than expected in the first half, Homeserve said it expects to deliver adjusted pretax profit for the current financial year "slightly ahead" of current consensus.
"The latest wave of lockdowns has made no fundamental difference to our operations, and the good news for us and our customers is that engineers can continue to work in peoples' homes. Based on what we see today, we are confident of delivering a healthy mix of organic and acquired revenue growth at the full year, with profits ahead of our prior expectation
Imperial Brands rose 2.8% as it reported a "difficult" year but sees a stronger performance in 2021.
Imperial Brands said revenue in the financial year to September 30 rose 3.1% to GBP32.56 billion, and pretax profit increased 28% to GBP2.17 billion from GBP1.69 billion.
Revenue growth was supported by moderated tobacco volume declines, Imperial said, as well as share gains and a stronger second half price mix. Tobacco volumes were down 2.1% with "better market size trends" in several markets.
The performance from its Next Generation Products - which includes products such as vapes - was "disappointing", the firm said. It did note, however, a moderation in NGP net revenue decline over the year, with the first half down 43% and the second half down 9%, leaving the total down 27% for the year as a whole.
Imperial's dividend was chopped by a third to 137.7 pence from 206.6p, in line with a rebasing set out in May.
"Although this has been a difficult year, the resilience of our tobacco business and the measures we have taken to improve our NGP operations reinforce my confidence in the future potential of the business. With a more disciplined focus and better execution we can realise significant value for our stakeholders over time," said Chief Executive Stefan Bomhard.
Following the "difficult" year, Imperial expects to deliver a stronger performance in the 2021 financial year.
SSP Group was the worst performer in the FTSE 250, falling 6.3% after a downgrade from Morgan Stanley to Equal Weight from Overweight.
Shares in easyJet were 4.1% lower after the airline posted the first annual loss in its 25-year history.
Total revenue in the year to the end of September fell 53% to GBP3.01 billion, with passengers down 50% to 48.1 million. The low-cost airline swung to a pretax loss of GBP1.27 billion from a profit of GBP430 million the year before.
easyJet grounded its entire fleet for 11 weeks during the national lockdowns seen in the spring to early summer, as governments across the globe tried to halt the spread of Covid-19.
"Whilst there was some recovery in demand as travel restrictions eased during the summer, widespread quarantine measures introduced in September once again eroded demand and consumer confidence to travel," the firm noted.
Based on current travel restrictions, easyJet expects to fly no more than 20% of planned capacity for the first quarter of its new financial year.
"At this stage, given the continued level of short-term uncertainty, it would not be appropriate to provide any further financial guidance for the 2021 financial year," the FTSE 250 constituent said.
The economic events calendar on Tuesday has eurozone construction output at 1000 GMT and US retail sales at 1330 GMT.
By Lucy Heming; lucyheming@alliancenews.com
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