Muted markets as US stimulus talk fails to excite

Traders spent most of Thursday sitting on their hands with markets barely moving as a dearth of economic news failed to excite prospects.

The FTSE 100 blue chip index closed the day up just 4.36 points at 6528.72 – a rise of 0.07%.

Initial excitement following soothing words on Wednesday night in the US failed to inspire as the day drew to a close, and mixed messaging over holidays in the UK meant investors waited for more substantial news before making a move.

David Madden, financial analyst at CMC Markets UK, said: “Volatility is low today as there has been little in the way of new news to trigger excitement.

“Yesterday, Jerome Powell, the head of the Federal Reserve, repeated the bank’s determination to support the economy.

“The Fed won’t even think about removing the stimulus package until the pandemic is well and truly behind us.

“There has been chatter that inflation could undergo a jump due to the extremely loose monetary policy of central banks and the aggressive stimulus plans of governments but a modest increase in US inflation won’t phase the Fed.”

Currencies were equally sluggish on Thursday, with the pound down 0.12% against the dollar at 1.382 and down 0.2% against the euro at 1.139 as markets closed.

France’s Cac 40 closed down 0.09% and Germany’s Dax closed up 0.74%.

In company news, AstraZeneca revealed pre-tax profits soared 153% to 3.92 billion US dollars (£2.83 billion) for 2020 with revenues up 27 billion US dollars (£19.5 billion) – a rise of 10%.

The company’s Covid-19 vaccine is being developed on a not-for-profit basis, but other medicines sold strongly. Shares closed down 1p at 7,246p.

Oil giant Royal Dutch Shell unveiled its “transition pillar” as part of plans to make the business green, although it said twice as much money would be used on developing natural gas compared to renewable energy.

Around four billion US dollars (£2.9 billion) every year will be spent to add another seven million tonnes of liquid natural gas production to its capacity by 2025.

Shell’s A shares closed down 31.2p at 1,332p and B shares closed down 27.4p at 1,278.6p.

Pubs group Marston’s revealed US private equity firm, Platinum Equity Advisors, has walked away from a possible deal for the business. An offer of 105p had been rebuffed.

As the suitors ended their interest, shares tumbled 12.55p, or 12.6%, at 86.8p.

Royal Mail said it would keep 10,000 of the 33,000 temporary workers taken on over the festive period. The decision came as bosses said operating profits will be “well in excess” of £500 million in the financial year ending in March.

Revenue in the first nine months of the financial year hit £9.3 billion, a rise of nearly 14%, with parcels up 31% to £1.3 billion, while letter numbers dropped 14% to 5.6 billion. Shares closed up 21.1p at 450.8p.

And struggling fashion chain Ted Baker said it has taken £5 million from Brexit as tumbling festive sales also laid bare the toll taken by the pandemic.

The company also said retail sales nearly halved in its crucial Christmas quarter, plunging 47% in the 13 weeks to January 30. Share closed down 9.35p at 94.95p.

The biggest risers on the FTSE 100 were Coca Cola HBC up 105p at 2,365p; Intertek up 204p at 5,794p; Avast up 15.8p at 507p; DS Smith up 11.4p at 381.9p; Burberry up 52p at 1,772.5p.

The biggest fallers were Shell A shares down 31.2p at 1,332p; Land Securities down 13.4p at 610.6p; Shell B shares down 27.4p at 1,278.6p; Anglo American down 49.5p at 2,663.5p and NatWest down 3p at 172.2p.