Lacklustre index buffeted by contrasting company news
YESTERDAY was a lacklustre day on the FTSE 100 with the blue-chip index preferring to take its movements on the back of company results, rather than any major geopolitical or economic news.
The morning started confidently, with the leading index rising 0.6% thanks to Vodafone, but by the end of the day it closed down 0.14%, dragged lower by GlaxoSmithKline (GSK), which released its results at noon. The FTSE 100 closed down 8.83 points at 6,516.65.
US sentiment failed to excite – typically impacting the European indexes by proxy – despite big profits reported overnight on Tuesday from Amazon and Google parent, Alphabet.
Connor Campbell, financial analyst at Spreadex, said: “The US open sapped some of the life out of the European indices.
“There were things for the Dow to celebrate. Alphabet was up 7.5% following last night’s record-breaking, better than forecast Q4 figures, while there are early signs of progress regarding Biden’s Covid-19 stimulus package.”
In Paris, the CAC 40 ended flat, while the DAX 30 in Frankfurt rose 0.7%.
The pound was down 0.17% against the dollar at 1.364 and off 0.03% against the euro at 1.134 as markets closed.
In company news, shareholders in pharmaceuticals giant GSK were left unimpressed with a lacklustre set of fourth quarter results, hitting a six-year low. A strong set of full year results was knocked by a poor final quarter, with falls in its pharma and consumer healthcare divisions, sending total sales in the period down 2% to £8.74 billion. Pre-tax profits dropped 52% to £821 million. Shares closed down 86p at 1,282p.
Conversely, telecoms giant Vodafone enjoyed a surge in shares, closing up 7.48p at 134.86p. The jump came despite a slump in revenues for the past three months as the coronavirus pandemic hit roaming revenues. Total revenues fell 4.7% to 11.2 billion euros (£9.9 billion) for the third quarter of its current financial year. But growth in organic service revenues and positive signs at its German division were where shareholders focused their attentions in the FTSE 100 firm.
Wizz Air reported passenger numbers dropped 82% year-on-year to 573,692 in January as its operations were impacted by coronavirus lockdowns and restrictions. But shareholders remain confident the firm will emerge as a big winner once restrictions are lifted. Shares closed up 172p at 4,788p.
Oil majors rebounded from some of their falls of Tuesday, when BP revealed huge losses. Shell reports its results on Thursday and analysts hoped they had accurately predicted an expected fall in cash flow.
BP closed up 3.3p at 258.3p, Royal Dutch Shell A shares were up 19.2p at 1,336p, with Shell’s B shares rising 22.2p to 1,272.4p.
The biggest risers on the FTSE 100 were Vodafone, up 7.48p to 134.86p; Aviva, up 12.6p to 356.9p; M&G, up 4.2p to 187p; BT, up 2.25p to 128.7p and Shell ‘B,’ up 22.2p to 1,272.4p.
The biggest fallers on the FTSE 100 were GlaxoSmithKline, down 86p to 1,282p; RollsRoyce, down 2.88p to 91.88p; Melrose Industries, down 3.95p to 174.2p; Diageo, down 65p to 2,979p and Hikma, down 49p to 2,364p.