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Upbeat earnings lift FTSE 100 as lockdowns, Brexit uncertainty weigh

Published 20/10/2020, 08:23
© Reuters. FILE PHOTO: A worker shelters from the rain as he passes the London Stock Exchange in the City of London
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By Devik Jain

(Reuters) - London's FTSE 100 edged higher on Tuesday, boosted by a clutch of upbeat quarterly corporate earnings, although gains were capped by concerns over tougher coronavirus lockdowns in parts of England and Brexit-related uncertainty.

The blue-chip FTSE 100 (FTSE) rose 0.3%, with shares of Dettol and Lysol maker Reckitt Benckiser (L:RB) jumping 2.6% after it reported a bigger-than-expected rise in third-quarter sales.

The domestically focussed mid-cap FTSE 250 added 0.4%, led by a 6.1% jump for soft drinks maker Britvic Plc (L:BVIC) as it forecast annual adjusted operating profit ahead of market expectations.

New business restrictions due to surging COVID-19 infections and a stalemate over Brexit have pressured UK markets this month, with analysts also warning of a further slowdown in domestic economic growth.

A junior business minister said on Tuesday Britain saw no point in talking with the European Union until the bloc starts to treat Britain as a sovereign state, dashing earlier optimism that negotiations could carry on.

"Markets have been bracing themselves for a no-deal exit for some time, or certainly accepting that as a distinct possibility," said Russ Mould, investment director at AJ Bell.

A recent Reuters poll found the Bank of England was likely to supplement its quantitative easing war chest next month to offer more support to a faltering economic recovery.

Asian markets were also subdued due to concerns over an impasse in a new U.S stimulus package ahead of the Nov. 3 presidential election.

In company news, Bellway Plc (L:BWY) gained 0.9% after the homebuilder reported a 43% year-on-year jump in its forward order book and resumed dividend payment as demand for homes picked up after the initial round of lockdowns.

Petra Diamonds Ltd (L:PDL) slipped 4% after the diamond miner abandoned plans to sell the business in favour of a debt-for-equity restructuring.

© Reuters. FILE PHOTO: A worker shelters from the rain as he passes the London Stock Exchange in the City of London

Energy (FTNMX0530), mining (FTNMX1770) and insurance (FTNMX8570) stocks were among the biggest decliners of the day.

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