The FTSE 100 endured a bumpy ride on Wednesday, reversing morning declines to finish the day higher as optimism gathered on ending lockdown restrictions in the coming weeks and that the summer tourist season may be saved if the planned timetable is met.
Fears of a return of meaningful inflation pushing interest rates higher had weighed on investors early on, with the strong pound also hitting exporters, with around 70% of blue-chip sales earned overseas.
London’s benchmark FTSE 100 ended the day 0.5% ahead at 6,658.97 as UK technology, mining, aerospace and engineering sectors gained, with oil firm BP (BP.) topping the FTSE leaderboard with a 5%-plus rise to 198.8p.
Mid-caps were firm, the FTSE 250 closing 1.2% up at 21,312.65.
LLOYDS RESUMES SHAREHOLDER PAYOUTS
High street bank Lloyds (LLOY) made 0.3% gains at 39.34p after resuming its dividend, proposing a final ordinary payout of 0.57p for 2020, the maximum allowed under the regulator’s guidelines and down from the previous year’s 1.12p shareholder reward.
Although the bank reported a fall in annual profit as lower rates weighed on income and more money was set aside to cover bad debts amid a pandemic-led deterioration in the economic outlook, Lloyds forecast net interest margin for 2021 to be in excess of 240 basis points, and also confirmed that subject to regulatory approval, new chief executive Charlie Nunn will get started on 16 August.
Durex-to-Dettol maker Reckitt Benckiser (RB.) went the other way, down 0.6% at £58.82 after reporting 11.8% like-for-like sales growth for 2020 and swinging to an annual profit as impairment charges fell, though underlying earnings were pressured by weaker margins.
Reckitt Benckiser kept its annual divided steady at 174.6p and forecast modest like-for-like sales growth of flat-to-2% for 2021.
The Slough-headquartered consumer goods giant also announced the sale of its Scholl foot-care brand to Yellow Wood Partners, as well as the acquisition of the Biofreeze topical pain relief brand from Performance Health, for undisclosed sums.
Communications giant Vodafone (VOD) led the FTSE 100 loser board after it announced plans to float its Vantage Towers infrastructure business in Germany before the end of March.
Vodafone had previously revealed plans to spin-out the business, which it will list on the Frankfurt Stock Exchange, targeting ‘a meaningful minority free float’.
But the stock reacted badly, losing more than 3% at 125.5p.
FTSE RESHUFFLE
Elsewhere water company Pennon (PNN) dipped 1% to 884p ahead of its possible demotion from the leading index.
‘Pennon and Weir (WEIR) are the two firms that look most likely to swap places’, said AJ Bell investment director Russ Mould.
‘Grocer Morrison (MRW) could also head out of the UK’s premier index, opening the way for a FTSE 100 debut for specialist distributor Electrocomponents (ECM).’
Meanwhile, Metro Bank (MTRO) slumped 8% to 137.9p as the challenger lender posted a deeper annual loss for 2020 after racking up more credit impairments due to the pandemic. Pre-tax losses for the year to December widened from £130.8 million to £311.4 million.
Life insurer Aviva (AV.) shed 0.7% to 372p after agreeing to sell its entire 40% shareholding in a Turkey joint venture to Ageas Insurance for £122 million.
Plastics manufacturer Synthomer (SYNT) edged 0.7% higher to 468.6p despite revealing it is not in talks about a possible takeover bid for the company. This was in response to press speculation suggesting CVC Capital Partners was exploring a possible bid.
And photonic components & systems maker Gooch & Housego (GHH:AIM) rallied 5% to £12.92, having seen improved levels of demand across the industrial laser sector, led by Asia.
