The major indices are mixed as uncertainty is circulating with respect to the UK-EU trade situation.
Europe
As a gesture of good faith, the UK will withdraw controversial elements of the internal markets bill so that should help create an environment for a potential deal to brokered. Tomorrow, Prime Minister Johnson will go to Brussels so the negotiations will be in centre stage. The mood in the markets today has been subdued as tomorrow will be the main focus of the UK-EU trade talks, most likely.
As far as the pandemic is concerned, today was historic because Pfizer’s-BioNtech’s Covid-19 vaccination was administered to a patient in the UK – the first in the world. The news made a huge amount of headlines but there was a relatively calm reaction by stocks because the vaccine news has already been priced in. The potential Covid-19 vaccine being developed by AstraZeneca and Oxford University received praise from the Lancet medical journal but it would appear that it needs more work.
Ashtead issued a positive update this morning and that pushed the share price to a record high, but it is off the highs of the session. The British plant hire group earns the bulk of its revenue in the US and there are high hopes for infrastructure projects that President-elect Joe Biden plans to introduce. Sterling has been soft recently on account of the trade fears between the UK and the EU and that has helped the Ashtead stock price too. The firm announced its unaudited second quarter numbers and even though revenue and underlying profit before tax slipped by 5.1% and 11% respectively, it predicts that full year figures will be ahead of previous expectations. The interim dividend was held steady at 7.15p.
Ferguson, the plumbing and heating specialist, saw an increase in business this year as a result of the pandemic. A large portion of the public decided to make home improvements, probably because the lockdowns promoted people to stay at home. In the first quarter, underlying trading profit increased by 12.2% to $486 million. Revenue edged up by 1.8% to $5.3 billion. The latest updates from companies that are connected to the home improvements business such as Lowe’s, Home Depot and Kingfisher have all been positive so it seems that Ferguson is keeping up with the rest of the pack.
Intercontinental Hotels is one of the biggest fallers on the FTSE 100 today after the US bank, Jefferies, downgraded it to underperform from hold, and lowered the price target from 4,100p to 3,550p. Yesterday the stock hit a 10 month high so the move by Jefferies acted as a nice excuse for traders to book some profit. The hopes in relation to mass vaccinations have assisted the leisure sector and Intercontinental have enjoyed the boost.
Morgan Stanley has resumed its coverage of
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