(Alliance News) - Stock prices in London opened lower on Monday amid a rise in global Covid-19 cases, while JD Sports was making a positive start to 2021 after upping profit guidance.
Senior ministers in the UK have discussed the prospect of introducing tighter lockdown controls in an effort to improve compliance with the current rules, according to media reports.
The Daily Telegraph reported that the UK government was considering scrapping the exemption allowing people to exercise with one other person from outside of their household or support bubble.
The Cabinet Office, asked to confirm what tighter restrictions were discussed at the meeting, pointed to words by Health Secretary Matt Hancock about the public needing to follow the stay-at-home guidance first and foremost.
Hancock, asked about the prospect of sterner measures, told BBC One's Andrew Marr Show: "I don't want to speculate because the most important message is not whether the government will further strengthen the rules. The most important thing is that people stay at home and follow the rules that we have got."
The FTSE 100 index was down 5.55 points, or 0.1%, at 6,867.71. The mid-cap FTSE 250 index was flat at 21,073.03. The AIM All-Share index was down 0.1% at 1,178.17.
The Cboe UK 100 index was flat at 683.85. The Cboe 250 was down 0.1% at 18,315.11, and the Cboe Small Companies was flat 12,184.56.
In Paris, the CAC 40 was down 0.2%, while Frankfurt's DAX 30 was 0.4% lower.
Spreadex analyst Connor Campbell said: "Without the artificial buzz of the New Year, or a seismic event like a pair of Senate races, the markets were forced to contend with the day-to-day realities of trading in 2021. For the FTSE, that means the prospect of even tighter restrictions in the UK, as experts believe the current level of lockdown isn't having the desired effect.
"Practically, any further measures the government could implement should have minimal impact on the blue chip index's individual components. Symbolically, however, the shift towards harsher constraints may undermine the FTSE's recent growth."
In the FTSE 100, JD Sports Fashion was the best performer, up 3.0% after the sportswear retailer raised its annual profit guidance as it said demand remained robust despite Covid-19 restrictions.
The retailer said total revenue for the twenty two week period to January 2, was more than 5% ahead of the prior year as consumers switched between physical stores and online channels.
JD Sports stated that for the year ending January 30, pretax profit is expected to be significantly ahead of the current market expectations, which average around GBP295 million. It is now anticipated that profit for the full year will be at least GBP400 million, it said. The company posted pretax profit of GBP348.5 million in financial 2020.
At the other end of the large cap index, Smith & Nephew was the worst performer, down 2.5% after the medical equipment manufacturing company fell victim to the coronavirus pandemic.
Smith & Nephew said it expects to post a fourth-quarter underlying revenue decline of approximately 7.0%. The medical devices maker said sales were hurt by increased rates of Covid-19 infection from mid-October onwards, particularly in the US and Europe, as surgical procedures unconnected to the pandemic were postponed following the reintroduction of restrictions.
Smith & Nephew said annual underlying revenue is expected to have declined by around 12%. The company also reiterated that trading profit margin will be substantially lower year-on-year, with negative operating leverage due to lower volumes partially offset by cost control measures. It posted a trading profit margin of 22.8% in 2019.
Entain was down 1.5% after the gambling firm said Chief Executive Officer Shay Segev has given notice of his intention to leave the company to become Co-CEO of sports streaming platform DAZN. Entain said Segev has a notice period of six months and will remain in his current role for that period or until a successor is in place and the process is "well under way to find his successor".
The company, formerly known as GVC Holdings, is a takeover target for US casino operator MGM Resorts International and reiterated its stance that the bid "significantly undervalues the company and its prospects".
Segev said: "Entain is in great shape after the successful launch of our new strategy. I also want to emphasise that the recent interest from MGM Resorts has had absolutely no bearing on my decision, and I fully support the board's decision to reject their proposal. Entain has a great team of leaders and an exciting future ahead through its growth and sustainability strategy, and I will do all I can to continue to support the company."
The US logged a record new daily virus caseload as Joe Biden, the incoming president, slammed the Trump administration's vaccine roll-out as a "travesty" and millions in Asia woke up to new lockdowns.
Almost 1.9 million people have now died from the virus, with new variants sending cases soaring and prompting the re-introduction of curbs on movement, even as some countries begin mass inoculation campaigns.
Almost 290,000 new cases were reported in the US within 24 hours on Friday according to Johns Hopkins University, a day after the world's worst-hit country recorded a daily record of nearly 4,000 deaths.
Despite nearly a year of intermittent restrictions across the globe, many countries are still recording record coronavirus numbers, including the UK which on Friday announced new highs of 1,325 deaths and 68,053 cases over 24 hours.
In China, where the novel coronavirus first emerged in late 2019, authorities also tightened restrictions on two cities near Beijing to stamp out a growing cluster.
In China, the Shanghai Composite closed down 1.1%, while the Hang Seng index in Hong Kong is up 0.1%. Financial markets in Japan were closed on Monday for the Coming of Age day holiday.
The pound was quoted at USD1.3497 Monday morning, down from USD1.3585 at the London equities close Friday.
The euro was priced at USD1.2185, down from USD1.2250. Against the yen, the dollar was trading at JPY104.15, up from JPY103.86.
Brent oil was trading at USD55.44 a barrel Monday morning, down slightly from USD55.50 late Friday. Gold was quoted at USD1,845.27 an ounce, lower against USD1,856.00.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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