FTSE-100 drifts as markets digest Marks & Spencer and Rolls-Royce gloom

The FTSE-100 share index fell moderately in early trading today as markets continued digesting Monday's huge leap.

The leading share index fell 29 pointst to 5972.73 in early trading

Trading news from Marks & Spencer was closely watched after reporting a sharp plunge in profits, predictably led by clothing and homewares falls as shops were shuttered for covid lockdown. The annual profit figure of £403 million was slightly lower than City forecasts, but analysts focused instead on measures being taken to improve its future; store closures and reductions in poor-selling fashion and homeware lines among them. The shares gained 3%.

Inflation came in a shade lower than expectations, at 0.8% last month against expectations of 0.9%, hammering home the full extent of the crisis in the economy as unemployment and wage cuts prevented companies from passing on cost rises. While prices have stayed low so far, the huge amount of monetary and fiscal stimulus currently in play could cause big rises in future years, although rising unemployment could keep a lid on that.

March's inflation was 1.5%.

Big job cuts at Rolls-Royce's civil aerospace arm came as little surprise given speculation that 15% of the workforce was going to be canned, but added to the gloom shed by yesterday's weak numbers on the economy and unemployment. Shares in Rolls fell 3% as analysts dwelled on a gloomy outlook from the company flagging that it would take "several years" for the industry to recover from covid-19.

Markets in Asia have been through a mixed session this morning after data on the hoped-for covid vaccine from US drug group Moderna began to fade. One report suggested phase I studies were inconclusive.

Retail investors who got hold of shares in Compass group's £2 billion fundraiser yesterday may regret it already. Shares fell 4% today after sharp falls yesterday too.

Gloom around engineering triggered by Rolls seemed to infect Melrose, which was the biggest faller in the FTSE, down 6%.

AstraZeneca got a 1% share boost after its Lynparza drug got approved in the US for cancer patients, while Experian made a 7% gain after saying it would not be cutting its dividend despite ugly looking results.