FTSE unfazed as UK braces for delay to reopening roadmap

UK equities managed to push higher this morning despite expectations that Boris Johnson will delay the final stage of the economic reopening by a month.

The FTSE 100 hit a post-pandemic high this morning as markets waited for news on whether the final stage in the Covid-19 reopening roadmap would be delayed a month.

The main market advanced above 7,180 in early trading, hitting its highest level since February 2020 before moderating gains back to 0.4%, or 28 points, to sit at 7,162 at 9am. The positive start was despite rumours that the final stage of reopening that was due on the 21 June is likely to be delayed by up to four weeks following a UK surge in the ‘delta’ variant of the coronavirus that has plagued India.

Prime minister Boris Johnson is expected to speak at 6pm this evening and tell the nation that continuing with the current rules until 19 July will prevent any further lockdowns.

AJ Bell analyst Russ Mould said the delayed lockdown easing ‘hasn’t troubled markets’ but the FTSE 100 still has ‘some way to go to hit the 7,400 levels seen before Covid-19’.

‘Many other major stock markets in the world have already recovered all of their Covid-19 crash losses and since rallied to Considerably greater heights, including the S&P in the US and the Nikkei 225 in Japan,’ he said.  

BT (BT) led the blue chips higher, adding 2%, or 4p, to trade at 195p as the telecoms giant continues to be lifted by positive sentiment towards French peer Altice taking a 12% stake in the group last week. Altice, which is now BT’s biggest shareholder, said it was not planning a takeover but saw the group as an investment opportunity.

Energy stocks tracked crude oil prices higher, with Royal Dutch Shell (RDSA) adding 1.7% to trade at £14.44 and BP (BP) gained 0.8% to hit 327p. Oil prices made fresh highs as demand improves and supplies remain tight.

‘West Texas Intermediate broke out clear of $71, its highest in almost three years,’ said Markets.com analyst Neil Wilson.

‘It comes after the International Energy Agency called on Opec and its allies to increase production.’

The domestically-focused FTSE 250 was undeterred by reopening woes, adding 0.45%, or 101 points, to hit 22,835.

Tullow Oil (TLW) was the biggest mid-cap gainer, up 5.9%, or 3p, at 63p as it benefited from strengthening oil prices and an insider purchase of £29,500 of the mining stock.

Serco (SRP) jumped 4.2%, or 5p, to 141p after the outsourcing giant upgraded its profit forecast for the year, boosted by revenues from its Covid-19 track and trace contract. The group expects underlying trading profit for 2021 to be £15m higher than previously expected at around £200m.

The profit it has made during the pandemic from its government contract has already paid for a £17m dividend.

Augmentum Fintech (AUGM ) fell another 7.8p, or 5.5%, to 136.3p as it lined up a £40m share issue at 135.5p per share, a 3.9% premium to net asset value and also said it would ask shareholders’ permission to invest in seed-stage businesses. Annual results showed NAV grew 12.3% in year to 31 March helped by gains in Tide, Farewill and Interactive Investor.

In other investment trust news, Draper Esprit (GROW) shed 13p, or 1.6%, to 826p as the highly-rated technology venture capital fund announced plans to raise £111m with share placing and PrimaryBid offer at 800p, priced at a 7.7% premium over NAV and a 4.6% discount to Friday’s closing price. Annual results confirmed NAV grew 34% in the year to 31 March.

Apax Global Alpha (APAX ) firmed 0.8p, or 0.4%, to 195.4p after investing €22.1m in the Apax X private equity fund buying a majority stake in Infogain, a California-based corporate digital platform provider.

JPMorgan European Income (JETI ) and Keystone Positive Change (KPC ) were among the leaders, up 3.8% to 157.5p and 302p respectively. 


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