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London midday: Stocks fall amid inflation concerns, ahead of Johnson speech

Mon 22 February 2021 11:04 | A A A

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FTSE 100 | FTSE 250 | Paris CAC 40 | Dow Jones | NASDAQ

6947.99 | Negative 175.69 (2.47%)

Prices delayed by at least 15 minutes

(Sharecast News) - London stocks were still in the red by midday on Monday amid worries about rising inflation, as investors awaited further details of Prime Minister Boris Johnson's roadmap out of lockdown, much of which was leaked overnight.

The FTSE 100 was down 0.6% at 6,582.80, while sterling was 0.2% higher against the dollar at 1.4039.

IG analyst Joshua Mahony said: "European markets have kicked off the week on a somewhat unstable footing, with the fears over rising inflation and Treasury yields once again dampening sentiment on a day that had promised to be dominated by reopening hopes.

"Inflation and rising treasury yields remain a key concern for investors, with a gradual rise in both providing a warning sign for equity markets. The inverse correlation between gold and Treasury yields serves to dampen the 2021 outlook for the precious metal, despite the bounce we have seen from seven-month lows today. Aside from precious metals, copper has been leading a drive higher for industrial metals in a move that could provide yet another underlying reason for higher inflation going forward."

As far as the lockdown exit plan is concerned, reports suggested schools will be the first to reopen, on 8 March, with the "rule of six" returning on 29 March. Non-essential shops are expected to be allowed to open towards the end of April, while pubs and restaurants will begin a phased reopening from early May.

Spreadex analyst Connor Campbell said: "While investors are no doubt happy the country is loosening the restrictions once again, the reality is they don't hold positions in schools and picnics."

In equity markets, Just Eat and online supermarket Ocado - both of which have benefitted from lockdowns and Covid restrictions - were under the cosh.

Pub group Mitchells & Butlers nudged lower after saying it had been burning up to £35m in cash a month since the start of the year as it launched a £351m placing to bolster its balance sheet from the coronavirus pandemic.

G4S slumped after Canadian security services firm GardaWorld said it will not raise its offer for the company, paving the way for Allied Universal to buy the London-listed security services firm for 245p a share.

CMC Markets analyst Michael Hewson said the news about GardaWorld had disappointed those shareholders who were holding out for a better offer than Allied Universal's.

"G4S has been a business that has seen its fair share of problems over the past three years, its share price down sharply from the record highs seen back in July 2017. Last year the company reported a £91m loss after writing down the value of its cash handling business, and has also been involved in a number of incidents that have damaged its credibility," he said.

"The shareholder hold-outs need to accept that they are unlikely to wring any more out of this particular bid, and accept the money on the table now."

Smith & Nephew was knocked lower by a downgrade to 'hold' at Commerzbank, while B&M European Value Retail was weaker after a downgrade to 'hold' at Peel Hunt.

On the upside, travel and leisure stocks gained amid the prospect of easing restrictions, with Paddy Power owner Flutter Entertainment, British Airways owner IAG, Premier Inn owner Whitbread, InterContinental Hotels, Cineworld and TUI all higher.

IAG was in focus after saying it had boosted total liquidity by £2.45bn, via a loan deal and deferred pension deficit payments to help it weather the pandemic.

WH Smith, easyJet, Wizz Air and Wetherspoons also rallied.

Elsewhere, miner Glencore was boosted by an upgrade to 'overweight' at JPMorgan.

Market Movers

FTSE 100 (UKX) 6,582.80 -0.62%

FTSE 250 (MCX) 20,886.70 -0.71%

techMARK (TASX) 4,032.52 -0.50%

FTSE 100 - Risers

Flutter Entertainment (FLTR) 14,245.00p 4.55%

International Consolidated Airlines Group SA (CDI) (IAG) 170.45p 2.84%

Evraz (EVR) 566.20p 1.72%

Aviva (AV.) 370.30p 1.59%

Informa (INF) 515.20p 1.22%

Whitbread (WTB) 3,459.00p 1.20%

Glencore (GLEN) 303.20p 1.02%

Morrison (Wm) Supermarkets (MRW) 174.00p 0.99%

InterContinental Hotels Group (IHG) 5,160.00p 0.98%

HSBC Holdings (HSBA) 427.35p 0.80%

FTSE 100 - Fallers

Scottish Mortgage Inv Trust (SMT) 1,291.00p -4.09%

Just Eat Takeaway.Com N.V. (CDI) (JET) 7,266.00p -3.22%

Ocado Group (OCDO) 2,478.00p -3.17%

Avast (AVST) 470.20p -3.09%

Rightmove (RMV) 619.80p -2.94%

Kingfisher (KGF) 268.20p -2.90%

Spirax-Sarco Engineering (SPX) 11,010.00p -2.82%

Aveva Group (AVV) 3,651.00p -2.80%

Smith & Nephew (SN.) 1,435.00p -2.61%

B&M European Value Retail S.A. (DI) (BME) 565.20p -2.59%

FTSE 250 - Risers

Cineworld Group (CINE) 83.94p 3.91%

TUI AG Reg Shs (DI) (TUI) 370.50p 3.84%

XP Power Ltd. (DI) (XPP) 5,540.00p 3.75%

WH Smith (SMWH) 1,747.00p 3.74%

easyJet (EZJ) 862.00p 3.71%

Wizz Air Holdings (WIZZ) 5,020.00p 3.51%

Hilton Food Group (HFG) 1,086.00p 3.23%

Wetherspoon (J.D.) (JDW) 1,274.00p 3.07%

Babcock International Group (BAB) 235.70p 2.97%

Indivior (INDV) 131.00p 2.66%

FTSE 250 - Fallers

G4S (GFS) 242.50p -9.85%

Premier Foods (PFD) 88.50p -4.94%

Fidelity China Special Situations (FCSS) 465.00p -3.63%

Diploma (DPLM) 2,458.00p -3.61%

Network International Holdings (NETW) 333.80p -3.41%

Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 895.00p -3.24%

Just Eat Takeaway.Com N.V. (CDI) (JET) 7,266.00p -3.22%

Templeton Emerging Markets Inv Trust (TEM) 1,030.00p -3.01%

JPMorgan Emerging Markets Inv Trust (JMG) 146.10p -2.86%

Allianz Technology Trust (ATT) 3,100.00p -2.82%

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