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What to watch: Smith & Nephew sinks, Moonpig's happy valentine, and Barclays shares drop

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Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·4 min read
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Smith & Nephew facility in Austin, Texas, US. Photo: Kristoffer Tripplaar/PA
Smith & Nephew facility in Austin, Texas, US. Photo: Kristoffer Tripplaar/PA

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

Smith & Nephew sinks

Shares in medical device maker Smith & Nephew (SN.L) sunk to the bottom of the FTSE 100 (^FTSE) after the company reported slumping revenues and profits.

Revenue fell 11.2% to $4.6bn (£3.£bn) last year, the company said. Profit dropped over 60% to $295m.

"Because of the focus Covid-19 has placed on the health care sector it would be easy to assume the pandemic had acted for a positive driver for earnings across the board," said Russ Mould, investment director at stockbroker AJ Bell.

“However, as today’s results from Smith & Nephew reveal that is not necessarily the case. This is because the coronavirus response has swamped other areas of patient care, particularly the elective surgeries which require Smith & Nephew’s replacement prosthetic hips and knees."

Smith & Nephew chief executive Roland Diggelmann said: "We start 2021 with three clear priorities: to return to top-line growth and recapture momentum; to drive further operational improvement; and to continue to respond effectively to COVID-19."

Shares dropped 5.4% to trail the FTSE.

Barclays shares drop

Barclays shares sold-off sharply despite better-than-expected full-year numbers.

The bank reported a full-year profit of £3bn ($4bn) on income of £21.8bn. Analysts had been expecting pre-tax profits of £2.8bn on income of £21.6bn. Full year profit was down 30% compared to 2019 but revenue grew slightly.

Barclays announced capital distributions worth 5p per shares, made up of a full-year dividend of 1p per share and a share buyback programme worth up to £700m. It comes after the Bank of England lifted its ban on shareholder distributions in December.

However, investors were put off by higher than expected provisions for bad loans and a warning that disruption from COVID-19 will continue this year.

Shares fell 3.4%.

Moonpig's happy Valentine's Day

Moonpig (MOON.L), the online greeting card retailer, has raised forecasts after a bumper Valentine's Day.

"Last week we saw the strongest ever trading week in the Group's history ahead of Valentine's Day," the recently floated business said in a trading update.

Moonpig said customers were ordering more often and making bigger orders when they did purchase. The retailer said it now expects revenues this year to be double last year's total. However, increased investment in marketing and extra costs associated with COVID-19 mean profits will likely be flat. Management warned that ordering habits would likely return to normal once the pandemic begins to fade.

Shares rose 4.2%.

Global stocks mixed as investors weigh recovery hopes and inflation fears

Global stock markets were mixed on Thursday, as investors weighed inflation fears against recovery hopes that have fuelled a global bull run and taken stocks to record highs this month.

The reflation trade had taken global stocks to record intra-day highs on Tuesday, and fuelled an 11-day winning streak for MSCI's world index. But the index shed 0.3% on Wednesday and was trading close to flat on Thursday.

European stocks were muted at the open. The continent-wide Stoxx 600 (^STOXX) opened 0.1% higher, after its worst day of the month on Wednesday had seen it dip 0.7%. Germany’s DAX (^GDAXI) also rose 0.1% after sliding 1.1% on Wednesday.

But Britain’s FTSE 100 (^FTSE) and France’s CAC 40 (^FCHI) opened close to flat, and were trading 0.4% and 0.2% lower by mid-morning in London.

Asian markets had been mixed overnight. Shares in Chinese largely rose as investors returned after the Lunar New Year holiday, with the Shanghai Composite index (000001.SS) rising 0.6%.

But the Hang Seng (^HSI) lost 1.6% in Hong Kong, and Japan's Nikkei (^N225) lost 0.2%. MSCI's Asia-Pacific index outside Japan dipped 0.1%, though remained close to record highs.

Stocks looked set for a lower open on Wall Street. S&P 500 (ES=F) futures were down 0.3 and Dow (YM=F) futures down 0.2%, as markets opened in Europe, while Nasdaq (NQ=F) futures were down 0.6%.

WATCH: What is inflation and why is it important?