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21 Jan 2021 | 16:16

London close: Stocks weaker as ECB leaves policy unchanged

(Sharecast News) - London stocks closed in the red on Thursday, as investors digested the latest policy announcement from the European Central Bank. The FTSE 100 ended the session down 0.37% at 6,715.42, and the FTSE 250 was 0.42% weaker at 20,793.72.

Sterling was well into positive territory, meanwhile, last rising 0.46% on the dollar to $1.3717, and advancing 0.18% against the euro to €1.1300.

"Today's ECB meeting did little to lift European stocks, with US markets outperforming in the wake of Joe Biden's inauguration," said IG senior market analyst Joshua Mahony.

Earlier in the afternoon, the European Central Bank kept all of its policy levers unchanged, but did leave the door open to further easing if needed.

In her press briefing following Thursday's meeting of the ECB's Governing Council, Christine Lagarde said "a lot of uncertainty about the pandemic" remained.

The bank projected that Covid-19 lockdown measures would remain in place across the first quarter, while vaccinations would initially proceed slowly.

Lagarde stressed that the central bank's compass would be financial conditions in the euro area, which were "clearly anchored" to inflation, the monetary authority's target by mandate.

Overall, she described the ECB's assessment as "steady" but added that the council was "ready to adjust and use all instruments in [the] toolbox if necessary."

IG's Mahony said the bank surprised few by keeping core interest rate steady, with the "relatively busy" December ensuring little reason to expect another adjustment this time around.

"However, while Draghi used to pride himself on the ability to talk down the euro to the benefit of stocks, Lagarde has clearly shown a relative lack of interest in that field," he said.

"With the eurozone faced with further lockdowns, near-term risks remain geared towards the downside.

"While the ECB 'stands ready to adjust all instruments where necessary', there was little to justify further euro weakness given the like-for-like outlook from other central banks."

In equity markets, software group Sage gained 4.92% after saying it traded in line with expectations in the first quarter as recurring revenue grew strongly.

Total revenue rose 1.4% to £447m in the three months to the end of December from a year earlier as recurring revenue increased 4.7% to £408m.

Sainsbury's was boosted 2% by an upgrade to 'hold' from 'sell' at Berenberg, while Ocado gained 2.98% after Berenberg bumped up its price target.

Brick maker Ibstock rose 7.32% after it said it now expected to report adjusted EBITDA for 2020 "modestly above" the previous guidance of £50m.

4imprint rallied 4.42% after the direct marketer of promotional products said that full-year underlying pre-tax profit is set to be in line with the board's expectations, as order intake continues to recover.

Pets at Home gained 2.18% after it stuck to its outlook for annual results as the company posted an 18% increase in third-quarter revenue amid a boom in pet product sales.

On the downside, Informa was 2.18% weaker after a downgrade at UBS, while Hiscox was knocked 1.47% lower by a downgrade to 'hold' at Jefferies.

IG Group slumped 8.47%, even as it agreed a $1bn deal to acquire American broker tastytrade and posted record interim numbers.

Energy producer and explorer Energean lost 4.88% after it said delivery of first gas from its Israeli fields could slip by up to three months due to manpower shortages.

Market Movers

FTSE 100 (UKX) 6,715.42 -0.37% FTSE 250 (MCX) 20,793.72 -0.42% techMARK (TASX) 4,176.88 -0.37%

FTSE 100 - Risers

Sage Group (SGE) 601.20p 4.92% Just Eat Takeaway.Com N.V. (CDI) (JET) 8,400.00p 4.87% Ocado Group (OCDO) 2,672.00p 4.00% Aveva Group (AVV) 3,893.00p 2.99% Auto Trader Group (AUTO) 585.20p 2.93% Kingfisher (KGF) 272.80p 2.79% B&M European Value Retail S.A. (DI) (BME) 515.40p 2.68% Rightmove (RMV) 631.40p 2.64% Intermediate Capital Group (ICP) 1,770.00p 2.56% M&G (MNG) 197.70p 2.28%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 103.30p -3.82% BP (BP.) 293.10p -3.14% International Consolidated Airlines Group SA (CDI) (IAG) 156.95p -3.03% Royal Dutch Shell 'B' (RDSB) 1,376.80p -2.91% Royal Dutch Shell 'A' (RDSA) 1,436.80p -2.72% Smith & Nephew (SN.) 1,625.50p -2.64% British Land Company (BLND) 437.50p -2.57% Land Securities Group (LAND) 640.40p -2.34% BAE Systems (BA.) 481.00p -2.34% Pearson (PSON) 720.00p -2.33%

FTSE 250 - Risers

Ibstock (IBST) 211.00p 7.32% Just Eat Takeaway.Com N.V. (CDI) (JET) 8,400.00p 4.87% 4Imprint Group (FOUR) 2,360.00p 4.42% Aston Martin Lagonda Global Holdings (AML) 1,800.40p 4.19% WH Smith (SMWH) 1,788.00p 3.84% Marks & Spencer Group (MKS) 142.80p 3.70% Avon Rubber (AVON) 3,375.00p 3.55% Diploma (DPLM) 2,328.00p 3.28% Royal Mail (RMG) 413.80p 2.94% Kainos Group (KNOS) 1,140.00p 2.90%

FTSE 250 - Fallers

IG Group Holdings (IGG) 827.00p -8.52% Aggreko (AGK) 636.50p -5.78% Energean (ENOG) 877.20p -4.88% BMO Commercial Property Trust Limited (BCPT) 76.10p -4.70% CMC Markets (CMCX) 409.00p -4.66% Meggitt (MGGT) 423.70p -4.25% Petrofac Ltd. (PFC) 105.00p -4.11% IWG (IWG) 312.00p -4.01% Hammerson (HMSO) 21.95p -3.98% Shaftesbury (SHB) 535.50p -3.89%
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