LONDON MARKET CLOSE: Stocks Pare Losses As UK PM Sets Out Roadmap

(Alliance News) - Stocks in London ended lower, with the FTSE 100 held back by strength in the pound, but recovered from earlier losses as travel and hospitality stocks reacted positively to the UK government's lockdown easing plans.

UK Prime Minister Boris Johnson announced a four-stage plan could see England's coronavirus restrictions finally lifted by June 21.

In the first phase, all pupils in England's schools are expected to return to class from March 8.

Socialising in parks and public spaces with one other person will also be permitted from that date.

A further easing of restrictions will take place on March 29 when the school Easter holidays begin - with larger groups of up to six people or two households allowed to gather in parks and gardens.

Making a statement in the Commons, the prime minister said: "The threat remains substantial with the numbers in hospital only now beginning to fall below the peak of the first wave in April.

"But we are able to take these steps because of the resolve of the British people and the extraordinary success of our NHS in vaccinating more than 17.5 million people across the UK."

The internationally-exposed FTSE 100 index closed down 11.78 points, or 0.2%, at 6,612.24. The FTSE 250 ended down 54.87 points, or 0.3%, at 20,981.09, and the AIM All-Share closed down 12.27 points, or 1.0%, at 1,201.91.

The Cboe UK 100 ended down 0.3% at 658.77, the Cboe UK 250 closed up 0.2% at 18,632.18, and the Cboe Small Companies ended up 0.9% at 12,908.66.

In Paris the CAC 40 ended flat, while the DAX 30 in Frankfurt ended down 0.3%.

The pound was quoted at USD1.4060 at the London equities close, up from USD1.4020 at the close Friday, reacting positively to the light at the end of the tunnel.

"Boris' slow and cautious plan to put the UK economy back on its feet has been greeted with a small bounce off the lows for the FTSE 100, but for this index to thrive it will need a much broader global reopening effort. Nonetheless UK markets have remained relatively steady, and should everything go according to plan the FTSE 250 looks well-placed to make another run toward record highs the economy begins its slow recovery from its worst year in decades," said IG Group's Chris Beauchamp.

On the London Stock Exchange, International Consolidated Airlines ended the best blue-chip performer, up 7.5%. The airline operator said its British Airways unit has secured two finance-support pacts worth GBP2.45 billion in total.

The UK flag carrier is to drawdown an export development guarantee term-loan of GBP2.0 billion before the end of this month after reaching a final agreement with UK Export Finance.

UKEF is the UK's export credit agency and provides an export development guarantee to support the working capital and capital expenditure needs of UK exporters that meet set criteria.

The travel stock was also benefitting from Johnson's roadmap out of lockdown. Hotels and group holidays will resume from May 17 - this can only be for two households, with no limit on people, or the rule of six from more than two households. Hotels and group holidays with no restrictions will go ahead from June 21.

Jet engine maker Rolls-Royce ended up 6.9%. Midcap travel stock Carnival, Tui and easyJet closed up 8.2%, 8.7% and 7.3% respectively. Irish carrier Ryanair finished up 4.5%. An announcement on global travel will be on April 12.

In addition, blue-chip hotel operators Whitbread and InterContinental Hotels ended up 3.4% and 4.0% respectively.

Elsewhere, pub chains JD Wetherspoon and Mitchells & Butlers closed up 8.3% and 4.5% respectively. Hospitality venues will be permitted to reopen but for outdoor purposes only from April, meaning restaurants and pubs will only be able to serve customers outside, where the rule of six or two households will apply.

At the other end of the large-caps, online grocer Ocado and Just Eat Takeaway - which saw demand for their services surge during stringent restrictions - ended the worst performers, down 6.2% and 4.6% respectively.

The euro stood at USD1.2145 at the European equities close, up from USD1.2139 late Friday. Against the yen, the dollar was trading at JPY105.07, down from JPY105.53 late Friday.

Stocks in New York were lower at the London equities close were lower as continued valuation and inflation fears overwhelmed upbeat news about the economic recovery.

The DJIA was down 0.1%, the S&P 500 index down 0.6% and the Nasdaq Composite down 1.1%.

On the plus side, the US Congress is moving towards approving a huge USD1.9 trillion economic stimulus package. But Treasury markets reflect fears that borrowing rates may rise sooner than expected, despite repeated assurances from the Federal Reserve.

Markets will be watching Fed Chair Jerome Powell's two days of testimony in Congress on Tuesday and Wednesday, where he is likely to repeat his oft-stated message that the central bank has no plans to raise the benchmark interest rate until employment has recovered and inflation begins to rise.

On the corporate front, Boeing dropped 1.1% after an engine failure in one of its 777 aircraft forced an emergency landing of a flight out of Denver, and prompted grounding of 128 planes with the same Pratt & Whitney engine.

Brent oil was quoted at USD64.45 a barrel at the equities close, up sharply from USD63.72 at the close Friday.

Gold was quoted at USD1,810.01 an ounce at the London equities close, higher against USD1,786.45 late Friday.

The economic events calendar on Tuesday has UK unemployment figures at 0700 GMT and eurozone inflation at 1000 GMT. Financial markets in Japan are closed for a holiday.

The UK corporate calendar on Tuesday has annual results from Asia-focused lender HSBC Holdings and from InterContinental Hotels Group.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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