What to watch: Ocado and Just Eat hit as lockdown eases, HSBC dividend, UK unemployment higher

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Tom Belger, Lucy Harley-McKeown and Oscar Williams-Grut
·5 min read
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Ocado stocks fell on Tuesday. Photo: PA
Ocado stocks fell on Tuesday. Photo: PA

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Delivery and tech stocks hit as 'end in sight' for UK lockdown

Shares in delivery companies took a hit on Tuesday after UK prime minister Boris Johnson set out his "roadmap" for easing coronavirus restrictions, telling the country the "end is in sight."

While many companies are desperate for restrictions to ease after a heavy toll from the pandemic and lockdown, others including delivery firms have seen benefits from millions of households spending more time at home.

With the UK government suggesting virtually all limits on social contacts could be eased by mid-June, investors appear to have grown concerned over their prospects.

Online grocery delivery and technology darling Ocado (OCDO.L) shed 4.4% on Tuesday, with a heavy tech sell-off on Wall Street on Monday also likely knocking the company. It was the third biggest faller on London's FTSE 100 ON Tuesday morning.

Meanwhile Just Eat Takeaway.com (JET.L), which has seen orders soar during the crisis, was the sixth biggest faller, sliding 3.5%. Royal Mail also shed 3.7%, in the fifth largest decline in daily trading on the FTSE 250 index.

UK travel stocks buoyed by Brits booking summer holidays

It marks a sharp contrast to the fortunes of travel companies on the markets on Tuesday. Travel stocks continued their flight on Tuesday morning as optimism reigned in the market, with the UK's roadmap out of lockdown leading people to consider booking to go abroad for the first time in months.

International Airlines Group (IAG.L), the company that owns carriers such as British Airways, had jumped nearly 9% by 9am in London. EasyJet (EZJ.L) was also up 8.8% and Ryanair (RYA.L) a slightly more subdued increase of 3.7%.

Package holiday supplier Tui (TUI.L) had also risen 6.8%, while cruise operator Carnival (CCL.L) was up 1.5%.

Hotels were also among the biggest risers in the market. Intercontinental Hotels Group (IHG.L) was up 3.8% in early trade, one of the biggest risers in the FTSE 100 (^FTSE), which itself had clocked overall gains on Tuesday morning of 0.1%.

The bump for IHG came even as the company reported a loss of $153m (£108m) in 2020 on Tuesday morning, due to crimped demand amid virus shutdowns. That was compared to a profit of $630m in 2019.

UK unemployment rate rises to highest since early 2016 at 5.1%

Unemployment continues to rise in the UK, hitting 5.1% in December.

The unemployment rate rose to 5.1% of the workforce in the three months to December, according to the latest data available from the Office for National Statistics (ONS). It marks a five year high for unemployment. December's figure was up from 5% a month earlier.

More recent payroll data shows employers have now slashed 726,000 jobs since February 2020, although there was an increase in payroll numbers month-to-month.

WATCH: How you can access COVID-19 finance help

HSBC resumes dividend as profits drop by a third

HSBC (HSBA.L) has reinstated its dividend and accelerated changes to its business, after annual profits slumped by a third.

The bank reported pre-tax profits of $8.8bn (£6.25bn) on income of $50.4bn in 2020. Analysts had been expecting profits of $8.3bn on income of $50bn.

Profits were down 34% on 2019. HSBC was hit by a big jump in credit loss provisions as a result of the COVID-19 pandemic. The bank set aside another $1.2bn In the fourth quarter of 2020 to cover an expected jump in bad loans. It took total loss provisions for the year to $8.8bn.

Stocks rebound as rising oil prices boost recovery hopes

European stocks opened higher on Tuesday, after gains in Asia overnight as rising commodity prices lifted hopes of global economic recovery.

US futures were also pointing to gains, with investor sentiment improving despite a sell-off on Monday amid inflation worries.

The FTSE 100 (^FTSE) rose 0.7% after UK prime minister Boris Johnson unveiled a "roadmap" out of lockdown for England on Monday. Cyclical stocks including hotels, airlines, banks, fashion retail and housebuilders made strong gains.

The CAC (^FCHI) in France was up 0.6%, and the DAX (^GDAXI) in Germany was 0.2% higher in early trading.

In the US, futures on the S&P 500 (ES=F) were 0.5% higher, after a fifth day of declines on Monday. Nasdaq futures (NQ=F) were up 0.7% after the tech-heavy index had slumped 2.5% on Monday, its worst day of the month. Meanwhile the Dow (YM=F) looked set to open 0.3% higher.

Analysts said strong demand for commodities had re-fuelled the reflation trade. Brent was trading 1.5% higher at $66.24 a barrel as European markets opened on Tuesday, while West Texas Intermediate (WTI) crude was up 0.3% to $61.69.

Stocks had wobbled overnight in Asia, but were boosted by commodity prices. Equities on MSCI's Asia-Pacific index excluding Japan had fallen to a two-week low in intra-day trading before advancing 0.4%. Japanese markets were closed for a holiday.