FTSE drifts into the red in subdued trading session

PA City Staff
·3 min read

The FTSE 100 sleepwalked into the red as a lack of major economic news resulted in a muted trading day on Monday.

Traders were cautious as they await positive updates regarding the global economic recovery, with few ready to sell off despite the good news currently priced into international markets.

The US markets were on holiday for the day, driving a lack of urgency among European counterparts.

London’s top flight closed 15.06 points, or 0.22%, lower at 6,720.65 at the close of play on Monday.

Connor Campbell, financial analyst at Spreadex, said: “In a sign, if one was needed, that Europe is often lost without American direction, the markets essentially took Martin Luther King Day off this Monday.

“Lacking a US intervention, broadly unimpressed with China’s Q4 GDP rebound due to a drop in retail sales, and anxious about how Wednesday’s inauguration is going to play out across the States, the European indices dozed through the session.”

David Madden, market analyst at CMC Markets UK, added: “The current environment is not exactly upbeat as things are getting worse with respect to the lockdowns.”

The UK Government’s clampdown on travellers arriving into the country without negative Covid-19 tests, harsher restrictions in Portugal and France, and increased localised lockdowns in China have dampened hopes regarding economic recovery.

Elsewhere in Europe, traders were slightly optimistic than in London, although gains were still very subdued.

The German Dax was 0.31% higher and the French Cac moved 0.02% higher.

Meanwhile, sterling dipped as it retreated from its four-month high at the end of last week.

The pound decreased by 0.09% versus the US dollar to 1.358 and was down 0.07% against the euro at 1.125.

Mining stocks were broadly lower as the likes of Glencore and BHP were out of favour among traders due to a strong session for the US dollar.

In company news, insolvency firm Begbies Traynor leapt in share value after it agreed a £20.8 million deal to snap up southern rival CVR Global.

Shares rose by 7.3p to 105.5p after Begbies Traynor told shareholders the move would be “immediately earnings-enhancing”.

Animal genetics firm Genus saw its shares jump to an all-time after it raised its profit outlook on the back of strong demand for pig and bull semen.

Shares in the company moved 180p higher to 4,492p after it said its pig division was buoyed by strong demand in China from pork producers looking to grow herds following the impact of African swine fever.

Defence and outsourcing firm Babcock saw shares slide again as brokers at Liberum and Morgan Stanley lowered their target prices for the stock.

It closed 15p lower at 205.3p, after an even larger slump on Friday after it warned a contract review could hit its balance sheet.

The price of oil nudged lower amid worries that lockdowns will dent demand in the energy market.

The price of Brent crude oil decreased by 0.2% to 54.99 dollars per barrel.

The biggest risers on the FTSE 100 were Ocado, up 64p at 2,577p, Barclays, up 2.52p at 151.32p, Natwest, up 2.2p, and Burberry, up 22.5p at 1,738.5p.

The biggest fallers on the FTSE 100 were Ferguson, down 178p at 9,088p, Hikma, down 45p at 2,495p, Pearson, down 11.4p at 666.6, and M&G, down 3.1p at 193.2p.