LONDON MARKET CLOSE: Steady gains as Thanksgiving damps volatility

(Alliance News) - European markets moved higher on Thursday in the absence of any direction from ...

Alliance News 25 November, 2021 | 5:02PM
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(Alliance News) - European markets moved higher on Thursday in the absence of any direction from the US, with New York sitting out the session for Thanksgiving.

Hospitality firms helped the FTSE 100 extend its winning streak into a fourth day, while gains for Vivo Energy, Hochschild Mining and Capita boosted the more mid-cap FTSE 250 index.

The FTSE 100 index closed up 24.05 points, or 0.3%, at 7,310.37. The FTSE 250 ended up 112.90 points, or 0.5%, at 23,279.96, and the AIM All-Share closed up 2.79 points, or 0.2%, at 1,203.96.

The Cboe UK 100 ended up 0.3% at 724.71, the Cboe UK 250 closed up 0.5% at 20,759.01, and the Cboe Small Companies ended flat at 15,235.96.

In European equities on Thursday, the CAC 40 in Paris ended up 0.5%, while the DAX 40 in Frankfurt ended up 0.3%.

"In a fairly subdued session European markets have edged modestly higher, with the absence of US markets due to Thanksgiving keeping volatility, as well as interest, fairly low," said Michael Hewson, chief market analyst at CMC Markets.

Stocks in mainland Europe steadied, snapping the week's losing streak which had been driven by worries over a return to lockdown across the continent.

Europe on Thursday reached the grim milestone of 1.5 million coronavirus deaths as nations scramble to tackle a worsening crisis with winter approaching, with Austria at the start of the week going back into lockdown.

Compounding a tough week, scientists in South Africa said Thursday they had detected a new Covid-19 variant with multiple mutations, blaming it for a surge in infection numbers.

In Paris, Health Minister Olivier Veran said Covid-19 booster shots, until now only available to people over 65 or with health problems, would be accessible to all adults starting this weekend. Neighbouring Germany meanwhile reported record coronavirus fatalities and infections Thursday as its total death toll passed 100,000 – a "grim milestone", said Bild daily – just as a new government prepared to replace Angela Merkel's coalition.

A release from Gfk on Thursday showed German consumer sentiment is "being squeezed from two sides" as Covid cases mount.

The advance GfK consumer sentiment index for Germany fell to minus 1.6 in December, from a revised positive 1.0 in November, below the consensus of minus 0.5.

"On the one hand, the number of cases in the fourth wave of the coronavirus pandemic is exploding, which threatens to overwhelm the health system and could lead to further restrictions. On the other hand, the purchasing power of consumers is dwindling due to a high inflation rate of 4%," said Rolf Burkl, GfK consumer expert, adding that the outlook for Christmas is "somewhat bleak".

Despite gloom surrounding the virus situation in the eurozone, the single currency notched some modest gains on Thursday. The euro stood at USD1.1211 at the European equities close, up against USD1.1195 at the same time on Wednesday.

The Japanese yen also advanced. Against the yen, the dollar was trading at JPY115.34, edging down from JPY115.38 late Wednesday.

The same could not be said for the pound, which eased to USD1.3321 at the London equities close Thursday from USD1.3328 at the close on Wednesday.

In London, Whitbread ended as the one of the best performers in the FTSE 100, up 2.8%, following an upbeat note from Jefferies.

"As we move from lockdowns through pent-up demand and on to vaccine-led normalisation, we expect a churn in investor attention by Leisure sub-sector. Encouraging data puts the focus on hotels for 2022, in our view," said Jefferies in its note.

Jefferies upgraded InterContinental Hotels Group to Buy from Underperform and retained its Buy rating for Premier Inn owner Whitbread. IHG shares rose 2.8%.

Vodafone finished at the bottom of the blue chip-index, down 3.1%, as the stock went ex-dividend, meaning new buyers no longer qualify for the latest payout.

There were some dramatic moves in the mid-cap FTSE 250 index, with Vivo Energy jumping 18% after accepting a USD2.3 billion takeover offer from energy and commodity trading company Vitol Group, its largest shareholder.

Vivo, a pan-African retailer of Shell and Engen-branded fuels and lubricants, will recommend a USD1.85 per share offer from Vitol Investment Partnership. The offer price includes planned dividends - a USD0.04 final dividend for 2021 and a USD0.02 special dividend for 2022.

The offer equates to 139 pence per share. In sterling terms, it is roughly a 25% premium to its closing price of 111.40p on Wednesday.

Hochschild Mining ended up 14% - though is still 15% lower since the week began - after welcoming clarified comments from the Peruvian government.

The stock tanked on Monday after Hochschild noted the risk that the Peruvian government may close two of its three running gold and silver mines. But on Wednesday, the government backtracked on earlier plans to shutter mines.

"In particular, the company notes the government's commitment to upholding the rule of law and that its express recognition of the continued rights of mining companies to request extensions and modifications of existing permits for mining and exploration activities," Hochschild said.

Gold was quoted at USD1,789.81 an ounce at the London equities close Thursday, soft against USD1,790.62 at the close on Wednesday.

Brent oil was quoted at USD81.92 a barrel at the London equities close Thursday, pulling back from USD82.73 late Wednesday.

Back in the FTSE 250, Capita rallied 9.6% after RBC upgraded the outsourcer to Outperform from Sector Perform.

Hill & Smith fell 8.6% as it noted supply chain headwinds relating to the availability of materials and labour, but said these continue to be "appropriately managed". It remains on track to deliver full-year underlying operating profit in line with analyst consensus expectations, which stand at GBP85.9 million.

Elsewhere in London, NewRiver REIT surged 17% after the UK retail and leisure property investor reported improving market sentiment, which is set to support higher valuation for its properties. It posted EPRA net tangible assets per share at September 30 of 131 pence, falling 13% from 151p at the end of March.

However, it said rent collection is normalising and brought back an interim dividend of 4.1p per share.

The UK corporate calendar on Friday has half-year results from car dealer Caffyns.

Friday's economic calendar has German import prices at 0700 GMT. After being shut on Thursday, US markets reopen for a half-day on Friday, closing at 1800 GMT.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
NewRiver REIT PLC 88.40 -
Hill & Smith Holdings PLC 1,666.00 -
Capita PLC 45.11 -
InterContinental Hotels Group PLC 4,600.00
Vivo Energy PLC 131.80 -
Hochschild Mining PLC 130.40 -
Whitbread PLC 2,875.00 -
Vodafone Group PLC 110.12

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