Marks & Spencer shares soar in otherwise gloomy London market
London stocks were generally weaker on Wednesday, with heavily weighted HSBC dragging the index lower, along with British Land, although Marks & Spencer was a positive after well-received results.
The FTSE 100 UKX index,
fell 0.1% to 7,019.67, while UK 10-year gilts yield TMBMKGB-10Y,
fell 3 basis points to 0.76%. A steepening yield curve helps banks borrow more cheaply and then lend at higher interest rates. A falling yield curve works in the opposite direction.
Investors are watching central banks closely for signs that they may start to move away from accommodative policies put in place to tackle the pandemic. The Federal Reserve led the way with comments to reassure investors about inflation.
HSBC HSBC shares,
fell more than 1%, along with other banks like NatWest NWG,
and Barclays BARC,
down 2% each.
On the FTSE 250 MCX,
shares of Marks & Spencer MKS,
jumped 9%. The retailer moved to a pre-tax loss for fiscal 2021 due to lower revenue, but said that for the first six weeks of fiscal 2022, the business was ahead of a two-year benchmark plus early. Marks & Spencer also warned of lingering uncertainty and rising costs due to the pandemic and Brexit, but analysts were looking at the positives.
“MKS emerges from COVID with stronger B / S [balance sheet] and 21/22
got off to a good start, as improved mobility led to two-year stack growth in both
categories, ”said a Jefferies analyst team led by James Grzinic.
Royal Mail RMG Shares,
continued to rise, a day after FTSE Russell said the multinational postal and courier company would return to the FTSE 100 after more than two years of absence, replacing engineer Renishaw, RSW,
who joined just in March. Royal Mail shares rose 1.5% and Renishaw shares rose 0.8%.
British Land BLND shares,
slipped more than 4%, after the real estate company said pre-tax losses narrowed, but income fell in fiscal 2021 as the pandemic hit rental collections and valuations of wallet. Russ Mold, chief investment officer at AJ Bell, noted that this was the third consecutive annual loss for British Land.
“The company is selling assets to strengthen its balance sheet and reshaping its portfolio to update it, managing to sell retail assets above their book value,” Mold said.
“He will need to do more in this direction as his new strategy under the leadership of recently appointed CEO Simon Carter sees him focus his attention on London offices, mixed-use sites and retail parks where he believes he can add value by repositioning them as logistics, residential and office. space, ”he said, in a note to customers.