(Alliance News) - Stock prices in London opened in the red on Tuesday despite futures pointing to a higher open, while Ferguson was the best performer in the FTSE 100 after resuming dividend payments.
The large-cap FTSE 100 index was down 23.11 points, or 0.4%, at 5,904.82. The mid-cap FTSE 250 index was down 113.22 points, or 0.7%, at 17,257.05. The AIM All-Share index was down 0.2% at 954.11.
The Cboe UK 100 index was down 0.6% at 587.92. The Cboe 250 was down 0.4% at 14,687.42, but the Cboe Small Companies was up 0.3% at 9,179.05.
In mainland Europe, the CAC 40 in Paris was down 0.3% while the DAX 30 in Frankfurt was 0.6% lower early Tuesday.
On the London Stock Exchange, Ferguson was the best blue-chip performer, up 6.5% after the plumbing and heating products supplier resumed dividend payments and reported annual results that beat estimates.
For the financial year ended July 31, revenue slipped 0.9% to USD21.82 billion from USD22.01 billion in financial 2019; however, the figure was higher than the company-compiled consensus forecast of USD21.76 billion.
Pretax profit was down 4.8% to USD1.26 billion from USD1.32 billion, while trading profit, which excludes exceptional items and amortisation of acquired intangible assets, was USD1.67 billion, up 8.6% from USD1.54 billion. The trading profit figure beat the consensus forecast of USD1.59 billion.
Ferguson proposed a final dividend for the year of 208.2 cents which it said "effectively reinstates" the previously withdrawn interim dividend, and was in line with last year's payout.
"Indeed, the most striking proof that the financial measures taken have been successful, as well as signposting confidence in future prospects is the full restoration of the dividend. The full-year payment is maintained from the previous year, which effectively reverses the previous decision to suspend the interim dividend. This returns the yield to its previous level of around 3% which, although somewhat pedestrian, nonetheless places Ferguson in a minority of stocks which have been able to weather the dividend storm," commented Interactive Investor's Richard Hunter.
B&M European Value Retail was up 5.0% after the discount retailer said it performed well in the first half of its financial year, as its knock-down prices and spacious stores were a hit among customers during the pandemic.
B&M European Value Retail said it has seen strong momentum for the period March 29 to September 26, with its easily accessible out-of-town locations continuing to prove attractive to customers during the pandemic.
B&M reported revenue growth in the first half of 25%, with B&M UK stores generating revenue growth of 30% including like-for-like growth of 23%.
The retailer - which joined the FTSE 100 index of London blue-chips on Monday last week - expects to open new stores in this financial year as a result of a pick-up in leasing activity, in a range of 40 to 45 B&M UK gross openings, most of which scheduled to open in the fourth quarter.
Standard Life Aberdeen was up 3.5% after JPMorgan upgraded the asset manager to Overweight from Neutral.
At the other end of the large caps, Next was down 2.5%. Berenberg downgraded the clothing and homeware retailer to Sell from Hold.
In the FTSE 250, gold miners Hochschild Mining and Centamin were up 1.7% and 1.2% respectively, tracking spot gold prices higher, quoted at USD1,881.50 an ounce, up from USD1,871.99.
At the other end of the midcaps, Greggs was down 4.3% after the bakery chain flagged an uncertain outlook.
Greggs said September company-managed shop like-for-like sales improved to 76% of the same time in 2019 in the four weeks to September 26, with higher levels of activity following a slower August.
The Newcastle-based firm said that due to its seating option being closed, it was not in a position to participate in the UK government's 'Eat Out to Help Out' scheme and this, along with high temperatures made August a "difficult month" for baked goods.
"The outlook for trading remains uncertain, with rising Covid-19 infection rates leading to increasing risks of supply chain interruption and further restrictions on customer activities out of the home. In these challenging conditions our teams continue to work hard and have proven our ability to operate with social distancing and adapt to new digital channels," the company said.
eToro analyst Adam Vettese said: "The problem for food-on-the-go outlets like Greggs is that they have positioned themselves to attract passers-by in city centres and the lunchtime workers crowd. With the government now urging workers to work from home for the next six months, we can safely assume that won't happen until at least the second or third quarter of next year."
The pound was priced at USD1.2850 early Tuesday, flat from USD1.2855 at the London equities close Monday.
The ninth round of trade talks between London and Brussels is set to get underway as the two sides continue to clash over the controversial UK Internal Market Bill.
At talks in Brussels on Monday, European Commission Vice President Maros Sefcovic reiterated calls for British ministers to scrap provisions in the legislation which could see the UK unilaterally tear up elements of the Brexit divorce deal.
At a news conference following the meeting of the joint committee on the implementation of the agreement, Sefcovic said the EU "will not be shy" in taking legal action if the UK does not withdraw measures from the draft Bill by the end of the month.
However, cabinet office minister Michael Gove, who co-chairs the committee with Sefcovic, said the UK government intended to continue with passage of the bill, which is due to go through its report stage in the Commons on Tuesday.
The euro was priced at USD1.1671, up from USD1.1653 at the European equities close on Monday. Against the yen, the dollar was quoted at JPY105.57, flat from JPY105.58.
In Asia, the Japanese Nikkei 225 index ended up 0.1%. In China, the Shanghai Composite closed down 1.7%, while the Hang Seng index in Hong Kong is down 0.5%.
Brent oil was trading at USD42.07 a barrel Tuesday morning, flat from USD42.10 a barrel at the London equities close Monday.
In the economic calendar for Tuesday, German inflation is due at 1300 BST and US consumer confidence at 1500 BST. In addition, the first televised US presidential election debate takes place at 9pm local time in Cleveland, Ohio between President Donald Trump and Democratic challenger Joe Biden.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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