The FTSE 100 managed to stem losses this morning despite the assault on Capitol Hill that left four dead last night.
The main market ticked down 0.2%, or 14 points, but stayed resolutely above the 6,800 mark at 6,827 after armed supporters of Donald Trump staged a siege at the US Congress that saw one woman shot dead by police and three others die from ‘medical emergencies’ as they protested the approval of Joe Biden’s presidential election win.
Biden was certified as the next president hours after the attack but is yet to be sworn in. However, Spreadex analyst Connor Campbell said markets continued to focus on the stimulus package that should be forthcoming following the Georgia elections that give the incoming administration control of both the upper and lower chambers of Congress.
‘It is on the Biden government to show they can get things done – and from a market perspective that means a chunky stimulus package to compensate for the compromised bill agreed before Christmas,’ he said.
The positive outcome for the Democrats was ‘something of a double-edged sword’ for markets, said Richard Hunter, head of markets at Interactive Investor.
‘On one hand, the new balance of power is largely expected to result in increased fiscal stimulus and infrastructure spending, but it may also be accompanied by higher taxes and regulation,’ he said.
A mixed bag of UK stocks fell this morning, with Auto Trader (AUTO) leading blue chips lower as the car classifieds platform dropped 3%, or 18p, to 591p after yesterday’s warning that car sale volumes will be impacted by the fresh national lockdown.
British Land (BLND) lost 2.9%, or 14p, to trade at 474p, knocked lower by a downgrade by Morgan Stanley to ‘underweight’.
Coronavirus barometer International Consolidated Airlines (IAG) dropped 2.8%, or 4p, to 153p after the Irish transport minister heaped more woes on the travel industry by stating the need for UK passengers to take a Covid-19 test before entering the country will stay in place until at least the end of January.
Sainsbury’s (SBRY) was the bright spot on the main index, gaining 3.8%, or 9p, to trade at 241p after reporting strong Christmas trading, with like-for-like sales up 9.3%.
Hargreaves Lansdown analyst Susannah Streeter said the supermarket sector ‘has had to adapt quickly to the rapid change in consumer habits brought on by the pandemic’.
‘J Sainsbury’s is still on a conveyor belt of change but it’s certainly going in the right direction,’ she said. ‘Ongoing price cuts to stay competitive against its rivals are continuing, and that is likely to put pressure on margins if the bun fight for the value end of the market continues.’
The FTSE 250 index ticked down 95 points, or 0.4%, to 20,877, led lower by IP Group (IPO), which sunk 7.9%, or 8p, to 102p, after Invesco sold 61m shares in the intellectual property group.
In investment trust news, peer-to-peer lending trust Honeycomb (HONY) was up 1.5%, or 15p, at 965p after reporting performance is back to pre-Covid-19 levels. The fund has deployed £30m into credit assets including the acquisition of a portfolio of short-term real estate loans.
Private equity trust Pantheon International (PIN) moved 1.4%, or 35p, higher to £25.15 a net asset value update that showed 4.3% growth in the portfolio in November.
Oakley Capital Investments (OCI) edged 0.1%, or 0.5p, higher to 286p after selling the digital wholesale solutions part of its portfolio company Daisy Group, a communications provider, generating proceeds of £22m for the fund.