The FTSE 100 rose as the US unveiled its $ 2 billion (£ 1.5 billion) single generation infrastructure plan Next ((NXT), which boosted the main index as it reported that profits had increased during the pandemic, which boosted other retailers.
The main market rose 0.66%, or 44 points, to 6,757 in early trading as investors digested U.S. President Joe Biden’s spending package paid for by reversing former President Donald Trump’s 2017 tax cuts.
The plan includes billions for developing transportation infrastructure, $ 650 billion for “modern infrastructure” like broadband and water systems, $ 400 billion for “care infrastructure” like schools and hospitals, and more money for training projects and business incentives To create jobs in manufacturing country.
“It’s big, yes. It’s brave, yes. And we can do it,” said Biden.
Neil Wilson, an analyst at Markets.com, said the new stimulus plan was “barely weeks” after Biden’s $ 1.9 billion Covid-19 relief bill.
“It’s another 10% of GDP on top of the 10% added by his Covid-19 bill and roughly the same that was added last year,” he said.
“This time the package is being funded through tax increases. However, these will be phased in over 15 years and it is difficult to see how spending will not affect the deficit.” The plans are already criticized on several fronts – too much, too little, no taxes, even more, ”he said.
The focus may be on the US, but the blue-chip index was boosted by a more UK-focused stock as retail giant Next posted strong full-year numbers despite the Covid-19 crisis that saw its physical stores shut down delivered. Pre-tax profit was forecasted at £ 342m compared to £ 729m a year earlier and net debt decreased from £ 1.1b to £ 610m.
Despite the results, Richard Hunter, head of markets at Interactive Investor, said some investors may be disappointed with the decision not to pay a dividend and suspend buybacks. The shares rose 2% to £ 80.26.
However, he said, “The decision may turn out to be a prudent one if a wave of unemployment and subdued consumer sentiment can be attributed to the end of state aid later this year.”
“While the company’s financial resilience has been demonstrated at an exceptional time and despite an optimistic outlook, the general sentiment on the shares of no more than a strong ‘hold’ should remain intact,” said Hunter.
Next’s results also helped attract peers JD Sports ((JD), with the sporting goods retailer adding 2.7% to trading at 203 pence.
The FTSE 250 rose 0.36%, or 76 points, to 21,595 as it continues to be backed by leisure stocks that will benefit from the economic reopening.
Platform for booking train tickets Train line ((TRN) moved to the top of the mid-caps after 4.4% to trade at 479p and the cinema chain Cineworld ((CINE) increased by 3.2% to 99p. Elsewhere food-on-the-go group SSP ((SSP), owned by Upper Crust, rose 2.6% to 382p and tour operator Tui ((TUI) pressed 2.4% higher to change hands at 376p.
Land rent rebellion
Basic rents income ((GRIO) rose 2.3 pence, or 3.2%, to 73.8 pence after shareholders of the Real Estate Investment Trust registered their dissatisfaction with its performance at yesterday’s general meeting.
A quarter of the votes cast were against raising the limit on board fees from £ 100,000 to £ 150,000, while 23% were against the Board’s remuneration policy and 19% were against the re-election of Directors Paul Craig and Bill Holland.
The board, now led by Barry Gilbertson after Malcolm Naish’s proposed resignation, noted the significant number of votes against the resolutions and said it would contact shareholders to find out why.
The £ 102 million portfolio of land rents has struggled in recent years as the government tried to reform leases. Shares have fallen 31% over the past three years and are 32% discounted to net asset value, giving the Schroders-led fund a market value of £ 69 million.
In other real estate fund news, Commercial real estate in the UK ((UKCM) rose 1.25p, or 1.7%, to 73.4p after the sale of Kew Retail Park in London to a home builder for £ 41 million, slightly below book value.
Tritax Eurobox ((EBOX) consolidated half a cent to 101p after most of last month’s equity issue for the purchase of two logistics properties in Germany for EUR 290.9 million (£ 248 million) with combined rental income of EUR 11.4 million and a net initial yield of 3.9% was used.
Value and indexed property income ((VIP), the former Value & Income (VIN), confirmed that it had repaid its 11% debited loan or bond and withdrew 5.5p or 2.5% to 212.5p.
Outside property, Syncona ((SYNC), the highly valued life sciences fund, was down 3p, or 1.2%, after portfolio company Freeline Therapeutics announced annual results.
JPMorgan Multi-Asset ((MATE) declined 0.5p to 97.5p after adding “Growth & Income” to the name.
FTSE Rises as US Plans $ 2 Billion Spree; Next jumps