UK stocks in the red as BoE maintains interest rates

by Jonathan Adams
UK stocks

The FTSE 100 index dropped 0.35% to 6,485, while the FTSE 250 index traded almost flat at 20,732

UK stocks fell into the red on Thursday after the Bank of England maintained interest rates at 0.1%, which came as a host of corporate updates got an increasingly negative reception.

The UK’s benchmark FTSE 100 index fell 0.35% to 6,485, while the midcap FTSE 250 index gave up earlier gains to trade almost flat at 20,732.

Consumer goods giant Unilever led the blue-chips loser board on Thursday with a 4% slump to £41.62 after emerging market performance in the fourth quarter missed some market expectations.

Sales in emerging markets rose 1.2%, hurt in part by strict lockdowns in the first half of the year and declines in Thailand, the Philippines and in Indonesia in the fourth quarter. That compared to long-term sales growth targets across the region of between 3% and 5%.

Oil and gas major Royal Dutch Shell fell 1.8% to £12.49 as profit plunged to a two decade low last year as the coronavirus pandemic hit energy demand worldwide. Adjusted earnings for 2020 slumped 71% to $4.8 billion, the lowest since at least 2000, according to Reuters data.

Telecoms giant BT fell 2.1 to 125.9p after it reported a fall in profit as performance was weighed down ongoing legacy product declines and the impact of Covid-19 on its consumer and its enterprise units.

But not every stock was falling as catering outsourcer Compass rallied 3.8% to £14.01, heading the FTSE 100 leaderboard after saying it anticipated second-quarter operating margins to improve by another 50 to 100 basis points, after its first-quarter operating margin rose to 2.7% from 0.6% in the preceding quarter.

The company reported a one-third fall in organic revenue for the December quarter after a tumultuous 2020 that was marred by school and office closures due to Covid-19 restrictions.

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