UK shares added to earlier gains at midday on Tuesday as stock markets made a tentative recovery following steep losses in recent days. However, pre-market futures prices indicate further losses when US markets open later while the VIX, the so-called fear index points to continued heightened volatility.
Sterling held steady at $1.3485 after falling back sharply from its highs against the dollar in the past week, while Brent crude oil was steady at $86.90 per barrel, retaining most of its recent gains.
At 12pm the FTSE 100 index was up 0.9% to 7,362 points led by mining and financial stocks, while utilities and staples, which provided a hiding place during the sell-off, eased back.
COMPANY NEWS
After their best day for many months yesterday, shares in consumer goods group Unilever (ULVR) dropped 1% to £39.07 after chief executive Alan Jope presented a new corporate structure to make the firm simpler and ‘more category-focused’.
The firm said the new model would result in the loss of around 1,500 managerial jobs, making it quicker for it to respond to changes in channel and consumer demand.
Shares in Royal Mail (RMG) were among the best performers in the FTSE, gaining 3.7% to 452.9p after the firm reported a sharp increase in parcel volumes and revenues for the third quarter to December as well as a solid increase in turnover at its GLS logistics business.
The company said its Pathway to Growth restructuring programme had delivered £35 million of cost savings during the quarter and it was on track to deliver between £55 million and £80 million of benefits in the financial year to March.
Social housing energy services firm Sureserve (SUR:AIM) posted its first results under new chief executive Peter Smith, with a 25% increase in revenues and a 77% jump in pre-tax profits for the year to September.
During the year the firm won a record 167 contracts values at £147 million, and as it stands almost three quarters of this year’s revenue is already covered by the order book. Investors approved, sending the shares 7.7% higher to 92.7p.
Shares in diagnostics company Novacyt (NCYT:AIM) fared less well, compounding yesterday’s 12% fall by dropping another 17.8% to 196.5p after its first results under new chief executive David Allmond.
While the results were as expected, the firm’s view that Covid-related sales could be 50% below last year’s level disappointed investors, as did the lack of certainty around product approval and availability.
Car parts supplier TI Fluid Systems (TIFS) said it expected revenues for the full year to December to come in just shy of €3 billion with an average margin on EBIT (earnings before interest and taxes) of 7% or slightly higher. The shares gained 2.5% to 247p.
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