LONDON MARKET CLOSE: Stocks close out impressive April to end higher

(Alliance News) - Stocks in London ended higher on Friday rounding off an impressive month for domestic equities, characterised by robust earnings.

The FTSE 100 index closed up 8.33 points, or 0.1%, at 6,969.81 and ended up 0.5% for the week overall. Over the month, the flagship index rose 3.5%.

The FTSE 250 ended up 104.43 points, or 0.5%, at 22,497.37 and rose 0.7% since the start of the week and 5.0% over the month, during which the second-tier index hit fresh record-setting levels.

The AIM All-Share closed up 8.55 points, or 0.7%, at 1,282.71, gaining 1.5% over the course of the week.

The Cboe UK 100 ended up 0.1% at 694.00, the Cboe UK 250 closed up 0.5% at 20,143.90, and the Cboe Small Companies ended up 0.4% at 14,659.80.

In Paris the CAC 40 ended up 0.5%, while the DAX 30 in Frankfurt ended down 0.1%.

"After a decent start to the month the last two weeks have seen the FTSE 100 take a bit of a pause, and though we've struggled to maintain a foothold above 7,000, the index is still up for the third successive month in a row. It's also important to note that while the FTSE 100 has underperformed the FTSE 250 has made new record highs this month," said CMC Markets analyst Michael Hewson.

In the FTSE 100, AstraZeneca ended the best performer, up 4.3%, after the Anglo-Swedish drugmaker retained its full-year guidance as profit grew in the first quarter, expecting an "acceleration" in performance as the Covid-19 pandemic eases in the second half of this year.

Total revenue for the first three months of the year was up 15% year-on-year at USD7.32 billion, with Product Sales revenue rising 15% to make up the bulk of group revenue at USD7.26 billion, while Collaboration revenue rose 43% to GBP63 million.

Revenue from its beleaguered Covid-19 vaccine totalled USD275 million for the quarter. The jab's use has been restricted by age in many countries over links to rare blood clots - with this also listed as a side effect for the Johnson & Johnson Covid-19 vaccine - but regulatory agencies have stressed that the benefits outweigh the risks. Pretax profit for the quarter jumped 72% to USD1.61 billion from USD935 million a year ago.

Chief Executive Pascal Soriot said: "Given the performance in the first quarter, in line with our expectations, we reiterate our full-year guidance. We expect the impact of Covid to reduce and anticipate a performance acceleration in the second half of 2021."

Smurfit Kappa closed up 4.2% after the Irish corrugated packaging company said its earnings grew in the first quarter of 2021, shaking off cost pressures.

Smurfit Kappa said underlying revenue rose 6% to EUR2.27 billion in the first three months of the year. Earnings before interest, tax, depreciation and amortisation were 1.6% higher year-on-year at EUR386 million from EUR380 million.

Corrugated volume growth in Europe and the Americas was 7%, with the company citing its exposure to the e-commerce sector. Online shopping has surged due to Covid-19 lockdowns.

Hikma Pharmaceuticals ended up 3.2% after the generic drugmaker said the year is off to a "good start" with its Injectables, Generics and Branded divisions performing well and in line with expectations.

Hikma said its full-year outlook is unchanged and that it remains confident in its "ability to deliver consistent long-term, sustainable growth".

The Generics business has seen continued demand for Covid-19 related products, Hikma said, and a good performance from recent launches, which more than offset increased competition on certain products.

"We now expect our full-year Generics revenue to be towards the top end of our guidance range of USD770 million to USD810 million and core operating margin to be around 20%," said Hikma.

At the other end of the large-caps, Barclays ended the worst performer, down 7.0%. The bank posted a record quarterly profit figure as credit impairment charges were reduced.

Pretax profit was a "record" GBP2.40 billion for the first quarter of 2021, up sharply from GBP913 million a year ago, even as total income fell 6% to GBP5.90 billion. Credit impairment charges were cut by 97% to GBP55 million from GBP2.12 billion.

For the year ahead, Barclays said the outlook remains uncertain due to the pandemic but expects to deliver "meaningful" year-on-year improvement in [return on tangible equity] in 2021. The full-year impairment charge is expected to be "materially below" than of 2020's due to an improved economic outlook in the latter part of the first quarter - and if this persists, Barclays would expect to reduce the impairment provision level.

Generics revenue grew 3% to USD744 million with a core operating margin of 21.6%, improved from 17.2%.

Elsewhere in London, Darktrace closed at 330 pence, up 32% from its initial public offering price of 250p, on its first day of conditional trading in London on Friday.

This gives it a GBP2.7 billion market capitalisation and entree into the top tier among listed companies. Unconditional dealings begin on May 6.

The UK tech startup, founded in 2013, provides cybersecurity services to businesses using artificial intelligence.

The pound was quoted at USD1.3827 at the London equities close, falling from USD1.3950 at the close Thursday, as the domestic currency contends with allegations against the UK government, ahead of an eventful week.

This week, UK Prime Minister Boris Johnson has been forced to deny he broke the law, as a series of rows from lobbying to what the opposition Labour Party has dubbed "sleaze" threaten to inundate his government.

The Electoral Commission opened a probe into whether funding arrangements for the refurbishment of Johnson's apartment breached election legislation last year.

Meanwhile, next week's holiday shortened week contains the latest Bank of England monetary policy decision and economic updates on Thursday, which may well see the central bank begin to tighten policy by reducing the rate at which it purchases assets over the rest of the year.

In addition on Thursday, there are UK local elections and special attention needs to be paid to the Scottish elections where an SNP majority may see IndyRef2 back on the agenda, amid growing support for Scotland's independence from the UK.

The euro stood at USD1.2035 at the European equities close, down from USD1.2120 late Thursday, after data showed the eurozone economy shrank at the start of 2021.

Eurozone gross domestic product contracted 0.6% quarter-on-quarter for the first three months of 2021, following a 0.7% decline in the fourth quarter of 2020. The latest reading was slightly better than expectations, cited by FXStreet, for a 0.8% decline.

A technical recession is typically recognised as two consecutive quarters of GDP decline. The eurozone entered a technical recession after the second quarter print for 2020 showed a quarter-on-quarter slump of 12% after a 3.6% fall in the first three months of the year, but the bloc rebounded strongly in the third quarter of the year with growth of 13%.

Year-on-year, GDP fell 1.8% in the first quarter of 2021, moderating from the 4.9% decline seen in the previous quarter.

Against the yen, the dollar was trading at JPY109.26, up from JPY108.94 late Thursday.

Stocks in New York were lower at the London equities close, hit by a bout of profit-taking as a bountiful week of corporate earnings draws to a close.

The DJIA was down 0.5%, the S&P 500 index down 0.6% and the Nasdaq Composite down 0.3%.

Earnings and growth news have been "so good that more people are finding it hard to believe it can last," said Briefing.com analyst Patrick O'Hare. "That last thought is the essence of the 'peak growth' narrative that is emerging as a more forceful headwind for the bull market," he said.

Amazon.com was 1.1% higher after the e-commerce company other high-profile tech names in reporting blowout quarterly earnings in the wake of the coronavirus pandemic.

Social media company Twitter plunged 13% after announcing weaker-than-expected earnings and disappointing user growth, while cautious on its outlook.

Apple shed 0.8% after the EU formally accused the iPhone maker of unfairly squeezing out music streaming rivals through its App Store, which the Tim Cook-led firm firmly rejected.

Brent oil was quoted at USD67.32 a barrel at the equities close, down from USD68.35 at the close Thursday.

Gold was quoted at USD1,768.81 an ounce at the London equities close, flat from USD1,768.68 late Thursday.

The economic events calendar on Monday has manufacturing PMI readings from Germany, the eurozone and the US at 0855 BST, 0900 BST and 1445 BST respectively. Financial markets in the UK will be closed on Monday for the Early May bank holiday, while markets in Shanghai will be hut for Labor Day.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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