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22 Mar 2021 | 11:05

London midday: Stocks tick higher but gains limited amid travel & leisure slump

(Sharecast News) - London stocks had popped into the black by midday on Monday, helped along by a strong performance from Kingfisher, although gains were limited as travel and leisure issues slumped amid an EU-UK vaccine spat and rising Covid cases in Europe. The FTSE 100 was up 0.2% at 6,719.40.

Over the weekend, the European Union threatened to ban exports of the AstraZeneca vaccine to the UK, with European Commission president Ursula von der Leyen saying the EU can "forbid" vaccines made on the Continent from being sent to the UK.

Meanwhile, worries about a third wave in Europe were exacerbated by news that German Chancellor Angela Merkel has recommended a four-week lockdown extension.

IG analyst Joshua Mahony said: "Despite expectations that the worst is behind us, the Brazil variant poses a critical risk given its ability to sidestep many current vaccines. Thus while vaccination efforts continue to impress, we are seeing traders question whether this apparent straight line to normality is perhaps too good to be true.

"The threat of an EU ban on vaccine exports runs the risk of a tit-for-tat battle that could ultimately see the vaccination efforts stumble after the UK crossed the 50% threshold. The proposed EU ban from threatens to delay the UK vaccination programme by two months, bringing a benefit that amounts to just over a week to the EU."

Sentiment also took a knock after the Turkish lira slid 15% over the weekend as President Erdogan sacked hawkish central bank governor Naci Agbal and replaced him with Sahap Kavcioglu, who has been a critic of high interest rates.

Mahony said: "The risk here is that Agbal could reverse the recent rate hikes, causing huge capital outflows as a result. While some of that initial Lira weakness has abated thanks to comments from both the finance minister and Agbal himself, this latest bout of instability adds yet another layer of uncertainty around the future of policy in Turkey."

In equity markets, B&Q owner Kingfisher rallied after it reinstated its dividend as it reported soaring annual profits and a strong start to the new fiscal year on higher demand from "a new generation of DIYers" working from home during the Covid-19 pandemic.

AstraZeneca rose after it said a US trial of the coronavirus vaccine it has developed with the University of Oxford showed it is 79% effective at preventing symptomatic Covid-19 and 100% efficacy at preventing severe disease and hospitalisation.

On the downside, travel and leisure stocks slumped on reports that summer holidays abroad were looking unlikely due to new variants of Covid-19 and a surge in cases in Europe. British Airways and Iberia parent IAG, engine maker Rolls-Royce, InterContinental Hotels, Premier Inn owner Whitbread, budget airlines easyJet and Wizz Air, Tui and cruise operator Carnival all fell sharply.

IAG was also knocked lower by a downgrade to 'hold' from 'buy' at Deutsche Bank.

Hargreaves Lansdown was trading down after The Times reported that the investment platform is being sued for recommending Woodford Equity Income to investors.

Broker Peel Hunt said: "The claim is based on losses sustained directly and loss of opportunity for investors who could have invested elsewhere. The matter is still subject to a FCA inquiry. Inevitably, we expect this will take some time to resolve, with nothing in the article giving any sense on timelines from here.

"The news is likely to be a small negative for sentiment, although there have been rumours of such action for a while."

Market Movers

FTSE 100 (UKX) 6,719.40 0.16% FTSE 250 (MCX) 21,474.25 0.25% techMARK (TASX) 4,206.90 0.64%

FTSE 100 - Risers

Kingfisher (KGF) 323.30p 3.39% NATWEST GROUP PLC ORD 100P (NWG) 196.80p 2.82% Rightmove (RMV) 582.60p 2.61% Standard Life Aberdeen (SLA) 293.40p 2.34% AstraZeneca (AZN) 7,273.00p 2.29% Bunzl (BNZL) 2,295.00p 2.00% Reckitt Benckiser Group (RB.) 6,436.00p 1.93% Halma (HLMA) 2,287.00p 1.92% Ferguson (FERG) 8,708.00p 1.68% Smurfit Kappa Group (CDI) (SKG) 3,442.00p 1.65%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 194.20p -6.05% Rolls-Royce Holdings (RR.) 114.10p -2.48% Melrose Industries (MRO) 171.20p -2.14% InterContinental Hotels Group (IHG) 4,910.00p -1.66% Coca-Cola HBC AG (CDI) (CCH) 2,242.00p -1.58% Compass Group (CPG) 1,458.00p -1.42% SEGRO (SGRO) 895.00p -1.39% British Land Company (BLND) 511.00p -1.35% Whitbread (WTB) 3,268.00p -1.33% Land Securities Group (LAND) 679.60p -1.26%

FTSE 250 - Risers

XP Power Ltd. (DI) (XPP) 5,000.00p 4.82% C&C Group (CDI) (CCR) 295.50p 4.60% Just Group (JUST) 94.90p 4.46% Helios Towers (HTWS) 159.00p 3.92% Pets at Home Group (PETS) 390.60p 3.55% Computacenter (CCC) 2,244.00p 3.41% HGCapital Trust (HGT) 319.00p 3.40% PureTech Health (PRTC) 405.00p 3.18% 4Imprint Group (FOUR) 2,325.00p 3.10% Telecom Plus (TEP) 1,198.00p 3.10%

FTSE 250 - Fallers

Hammerson (HMSO) 32.61p -6.86% TUI AG Reg Shs (DI) (TUI) 372.20p -6.39% easyJet (EZJ) 936.40p -5.91% Cineworld Group (CINE) 115.05p -5.70% Watches of Switzerland Group (WOSG) 670.00p -4.83% Tullow Oil (TLW) 53.80p -4.37% Wizz Air Holdings (WIZZ) 4,740.00p -3.50% Sirius Real Estate Ltd. (SRE) 93.60p -2.50% Wood Group (John) (WG.) 276.90p -2.33% Meggitt (MGGT) 478.80p -1.89%
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