UK stocks jumped in early morning trading, mirroring gains seen elsewhere amid optimism that the US Federal Reserve would maintain a dovish stance on interest rates at a key meeting this week.
By 9am, the UK’s benchmark FTSE 100 index gained 0.57% to 6,788, while the midcap FTSE 250 index was trading 0.81% higher to 21,696.
It comes after a strong day for Asian stocks, with Japan’s Nikkei 225 gaining 0.52%, China’s Shanghai Composite increasing 0.78% and the Hang Seng in Hong Kong up 0.67%.
Meanwhile in commodities, gold remained virtually flat at $1,731.87 per ounce, while Brent crude oil futures were trading 0.63% lower to $68.31 a barrel.
ANTOFAGASTA HIKES DIVIDEND ON HIGHER COPPER PRICE
In company news, Chilean copper miner Antofagasta (ANTO) fell 0.6% to £17.25 despite hiking its dividend and reporting a big jump in 2020 earnings on the back of higher copper prices.
After experiencing a big fall to around $2.20 per pound as the pandemic hit, copper swiftly bounced back to trade at over $3.50 - well above 2019 levels - by the end of the year as optimism grew over a global economic recovery, and this was reflected in the miner’s full year results. Copper has since gone on to trade at over $4 per pound.
For the year ended 31 December 2020, Antofagasta’s earnings before interest, tax, depreciation, and amortization (EBTIDA) rose 12.3% to $2.7 billion year-on-year, with net cash costs standing at $1.14 per pound.
A final dividend of 48.5 cents per share was declared, bringing the total dividend for the year to 54.7 cents per share, significantly up from the 17.8 cents declared last year.
GREGGS’ FIRST LOSS SINCE IPO
Bakery chain Greggs (GRG) jumped 6.2% to £23.48 despite swinging to its first annual loss as a public company after lockdowns weighed on sales, as it touted optimism ahead and said it has made a better than expected start to 2021.
In the first ten weeks of 2021, company-managed shop like-for-like sales were down 28.8% year-on-year and delivery sales were 9.6% of total company-managed shop sales. The better-than-expected start comes as the hit to sales in 2020 from lockdowns was captured in the company’s annual results.
For the year ended 31 December, the pre-tax loss was £13.7 million compared with a profit of £108.3 million last year, as sales fell to £811.3 million from £1.16 billion.
The company continued to keep the dividend suspended and said it would need to return to a level of profitability and cash generation sufficient to resume payouts.
FERGUSON UNVEILS $400M SHARE BUYBACK
Plumbing company Ferguson (FERG) edged 0.1% higher to £90.42 as it unveiled a $400 million share buyback plan after reporting a rise in first-half profit on cost cuts and improving inflation.
The company said it would buy back $400 million of its shares over the next 12 months, citing a ‘strong’ financial position. For the half year ended 31 January, pre-tax profit rose 17.7% to $739 million year-on-year as revenue was up 4.2% to $10.31 billion.
The company declared an interim dividend of 72.9 cents per share. The outlook for the second half remains uncertain but the firm expects to generate growth, Ferguson said.
OTHER NEWS
Pharmaceutical giant AstraZeneca (AZN) climbed 1.9% to £71.12 after it agreed to supply 500,000 additional doses of its Covid-19 vaccine to the US. AstraZeneca also announced that it had sold its 26.7% stake in Viela Bio, owing to Horizon Therapeutics’s acquisition of Viela, for cash proceeds and profit of about $775 million.
Broker Plus500 (PLUS) gained 4.3% to £13.80 as it said trading during the first quarter remained ‘strong’, driven by growth in customer income that was tracking ahead of the fourth quarter of 2020.
Natwest (NWG), the bank formally known as Royal Bank of Scotland, fell 0.8% to 186.9p after authorities in the UK had launched criminal proceedings against the company over historic allegations of money laundering.
The Financial Conduct Authority had commenced criminal proceedings against subsidiary National Westminster Bank for alleged offences between 11 November 2011 and 19 October 2016. The accusations arose from the handling of the accounts of a UK incorporated customer.
Furniture and flooring retailer ScS (SCS) jumped 6.9% to 248p as it swung to a first-half profit, driven by pent-up demand, though it said more recent orders had been hit by the fresh UK lockdown.
Pre-tax profit for the six months to 23 January 2021 amounted to £17.7 million, compared to a year-on-year loss of £0.6 million, as revenue rose 14% to £173.9 million.
Plastic piping-system maker Polypipe (PLP) firmed 1.6% to 568p after it booked a 60% slump in annual profit, but hiked its dividend citing a second-half rebound in housing construction markets.
