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FTSE 100 closes on front foot as traders eye easing of restrictions

FTSE 100 index closes up 111 points
Carnival among top risers on hopes of a relaxation to physical d..

By admin , in Cambridge , at April 29, 2020

  • FTSE 100 index closes up 111 points
  • Carnival among top risers on hopes of a relaxation to physical distancing guidelines
  • Burford Capital emerges from the doghouse after portfolio successes

5.15pm: FTSE 100 closes up

FTSE 100 index closed on the front foot but Wall Street was downbeat as tech stocks weighed.

Britain's top share benchmark finished the day up over 111 points at 5,958, while FTSE 250 added over 338 at 16,291.

"There is growing sense of optimism the lockdowns have helped contain Covid-19, and a loosening of restrictions seems to be on the horizon," noted David Madden, market analyst at CMC Markets.

"A number of countries have already reopened some small aspects of their economies, and there is hope the trends will continue. Sadly, the pandemic is still spreading, but it would appear the growth rate has cooled, so dealers have another reason to be bullish."

On Wall Street, the Dow Jones shed around six points, while the tech heavy Nasdaq was off around 81 points.

Oil was mixed with the US benchmark down around 5% to US$12.14 a barrel, while Brent crude was up a shade at US$20.25, up 1.3%.

3.50pm: Happy days are here again for the Footsie

The FTSE 100 was clinging on to its triple-digit gain entering the last hour of trading.

In a sure sign that traders are punting on lockdown restrictions being relaxed in the near future, cruises operator Carnival PLC (LON:CCL), up 10% at 1,015p, is the second-best performer on the Footsie, which is up 106 points (1.8%) at 5,953.

“Naturally the mood is helped by reports of cities and states around the world either starting to reopen or at least planning for it,” said Craig Erlam at OANDA.

“We appear to have moved beyond peak virus, for now, in the worst affected parts of Europe and North America, which is a relief, but any reopening is going to be extremely gradual so a return to normal is not going to happen any time soon. The new normal, that is,” he added.

Burford Capital Limited (LON:BUR), the litigation backer that came under fire from hedge fund Muddy Waters back in what now seems a different era, shot up 21% to 491.5p after updating on its portfolio.

In the first four months of 2020 Burford has obtained court results or arbitral awards that, if paid in full, would generate substantial income and cash receipts, the company claimed.

Another company that has been under fire in the past, outsourcing firm Mitie Group PLC (LON:MTO), hardened 4.0% to 67.3p after it reassured the market that results for the year to the end of March would be in line with the guidance given on 30 January – if you strip out the effects of the coronavirus situation on its business.

3.20pm: US consumer confidence slumps

Some more US economic data for investors to ignore … US consumer confidence plummeted in April.

The Conference Boards Consumer Confidence Index slumped to 86.9 in April from 118.8 in March.

The Present Situation Index, which is based on consumers' assessment of the current business and labour market conditions, plunged to 76.4 in April from 166.7 in March, although on the plus side, the Expectations Index, which is based on consumers' short-term outlook for income, business and labour market conditions, rose to 93.8 from 86.8 in March.

“Consumer confidence weakened significantly in April, driven by a severe deterioration in current conditions," said Lynn Franco, the senior director of Economic Indicators at The Conference Board.

"The 90-point drop in the Present Situation Index, the largest on record, reflects the sharp contraction in economic activity and surge in unemployment claims brought about by the COVID-19 crisis,” Franco added.

“Consumers' short-term expectations for the economy and labour market improved, likely prompted by the possibility that stay-at-home restrictions will loosen soon, along with a re-opening of the economy; however, consumers were less optimistic about their financial prospects and this could have repercussions for spending as the recovery takes hold. The uncertainty of the economic effects of COVID-19 will likely cause expectations to fluctuate in the months ahead,” Franco predicted.

Ignoring the above, the Dow Jones extended its gains, rising to 24,393, up 265 points.

In London, the FTSE 100 was up 117 points (2.1%) at 5,969.

Conference Board Consumer Confidence Index for April; 2020 https://t.co/cKvWpULDi6

— TARRReport (@StaceyAnfindsen) April 28, 2020

2.50pm: US stocks off to a flyer

US stocks got off to a flying start as traders take heart from positive noises about lockdown restrictions around the world being eased.

The Dow Jones index was up 230 points (1.0%) at 24,363 while the S&P 500 was up 26 points (0.9%) at 2,904.

The strong start was despite some dismal US advance goods trade data.

The advance goods deficit rose to US$64.2bn from US$59.9bn, which was more severe than the US$55.0bn economists had been expecting.

“The consensus forecast failed to account for the sharp fall in exports signalled by the drop in outward container movements from major ports,” said Ian Shpeherdson, the chief economist at Pantheon Macroeconomics.

“Total goods exports plunged by 6.7%, easily offsetting the 2.4% fall in imports. The drop in exports was led by autos, down 17.8%, but imports of consumer and capital goods also fell sharply. We expect a further steep decline in all these components in April, but May should be a bit better,” Shepherdson predicted.

In London, the FTSE 100 was up 115 points (2.0%) higher at 5,962, despite sterling rising by three-tenths of a cent against the US dollar to US$1.2459.

#Markets – Bets against #sterling at 2020-high amid concerns over #economy & #Brexit uncertainties, #Investors turn bearish on the #pound https://t.co/6Ej6Pq8WFV via @financialtimes

— Howard Archer (@HowardArcherUK) April 28, 2020

1.05pm: Wall Street expected to start higher

US markets are expected to head higher on Wednesday as the easing of coronavirus lockdown measures across several countries boosted market sentiment on Wall Street.

Investors may also be willing to look past the gloomy picture in the oil markets and more towards equities as US earnings season begins to hit its stride and the prospect of more central bank stimulus increases risk appetite for equities.

Some are expecting the Dow Jones Industrial Average to climb around 330 points, which would take it to a seven-week high.

Meanwhile, in London, the FTSE 100 was up 102 points at 5,948 just after 1pm.

12.25pm: Hopes of a relaxation of lockdown restrictions boosts sentiment

More news from the retail sector that appears to contradict some of the data published by market research group Kantar this morning.

The CBIs monthly Distributive Trades Survey (DTS), which was conducted between 27 March and 15 April, reported the sharpest fall in sales in the year to April since December 2008 – a balance of -55% in April, from -3% in March. This represented the joint lowest balance in the history of the survey.

The CBI reported that two-thirds of retailers surveyed declared that the coronavirus (COVID-19) is having a significantly negative impact on their domestic sales.

39% of retailers reported the total shutdown of UK activity because of COVID-19 while 44% of retailers reported temporarily laying off staff and 8% reported permanent staff lay-offs.

Nearly all retailers (96%) reported cash flow difficulties, with just under half facing difficulties meeting tax liabilities (40%). 31% of retailers also faced constraints on the availability of external finance, the CBI said.

“Its no surprise that the lockdown is hitting retailers hard. Two-fifths have shut up shop completely for now and sales of groceries and other essentials also fell, suggesting households may have been dipping into stockpiles built up prior to the lockdown or tightening their belts more generally as incomes take a hit,” said Rain Newton-Smith, the CBIs chief economist.

"Although the livelihoods of hundreds of thousands of employees in retail remain at risk, there are encouraging signs that the Governments Job Retention Scheme is providing genuine relief, with many opting for temporary rather than permanent lay-offs.

“Continued support for retailers to cover their fixed costs will be vital for ensuring that businesses are able to re-open when its safe and appropriate to do so,” he added.

Howard Archer, the chief economic advisor to the EY ITEM Club, noted that the British Retail Consortium has also reported that shopper footfall has fallen by 83% since the government closed non-essential retail outlets in March.

“Grocers and specialist food and drink shops bucked the weaker trend in April with very strong growth reflecting the stockpiling by some households that has been occurring,” Archer reported.

“Meanwhile, the near-term fundamentals for consumer spending have clearly taken a substantial downturn as a result of coronavirus. Some people have already lost their jobs, despite the supportive Government measures, while others may be worried that they may still end up losing their job once the furlough scheme ends. Additionally, many incomes have been impacted.

“Furthermore, consumers are likely to adopt a much more cautious approach to discretionary purchases given the current economic environment,” Archer said.

Online sales are coming increasingly to the fore, Archer noted but he added that they can only make up a limited amount of the lost business.

“Significantly, online sales as a share of total retail sales reached a record 22.3% in March,” Archer observed.

Unsurprisingly #CBI distributive trades survey shows substantially weaker #retail sales in April as sales balance sinks to equal record low of -55% from -3% in March https://t.co/pNbVZISvmI

— Howard Archer (@HowardArcherUK) April 28, 2020

The FTSE 100 was up 86 points (1.5%) at 5,932.

11.30am: Advance picks up pace

After a hesitant start, the Footsie has found its mojo and cruised past the 5,900 mark and is now eyeing a return to 6,000.

To put that into context, the last time the index was above 6,000 was on 6 March.

The index is currently up 91 points (1.6%) at 5,938.

“Further gains for the FTSE 100 look odd on a morning when major components like BP and HSBC report poor earnings, but for the most part the gainers in the index are those that will see an upturn in activity as lockdowns ease across most of the globe, if perhaps not yet in the UK,” said IG's Chris Beauchamp.

Financials are very much to the fore this morning, with life assurance pensions consolidator Phoenix Group Holdings PLC (LON:PHNX), up 6.8% at 608p, banking giant Barclays PLC (LON:BARC) and Royal Bank of Scotland Group PLC (LON:RBS) – up 6.3% at 96.82p and 5.5% at 113.45p – plus wealth management firm St Jamess Place PLC (LON:STJ), up 5.8% at 840.6p, the picks of the bunch.

Among the mid-caps, building materials supplier Travis Perkins PLC (LON:TPK) and fantasy wargames company Games Workshop PLC (LON:GAW) are both faring well.

Travis Perkins was up 4.0% at 1,060.5p after it highlighted that branches across all of its businesses remain open.

Irish investment bank Goodbody reckons the first-quarter trading update shows that the builders merchant “is one of the winners in spite of Covid-19”.

“Given a greater amount of time spent indoors and the boom in DIY prompted by the UK lockdown, the group has been working to increase activity and since April 20th and has been opening more merchanting branches with a third of the network open through the lockdown,” said Robert Eason, the co-head of Equities – Capital Markets at Goodbody.

Games Workshop battled its way 9.2% higher to 5,810p after it said it will begin taking online orders again from Friday.

9.45am: Hesitant progress

The FTSE 100 has made hesitant progress this morning with risers among its constituents outnumbering fallers by slightly more than two to one.

Londons index of leading shares was up 22 points at 5,868, with insurance companies – likely to be beneficiaries of a recovery in global stock markets – prominent among the risers.

“Stock markets in Europe are showing small gains as traders are still hopeful that lockdowns will be relaxed. There is a sense that social distancing policies have helped governments get a handle on the Covid-19 crisis as the infection and death rates are tapering off. Dealers are taking the view that looser restrictions are in the pipeline,” said CMCs David Madden.

COVID Qs #16. Where are the winners? Thin on the ground. Delivery, maybe but TSCO is cutting staff, SBRY says margins impacted by security, screening & MKS says food trading has been adversely affected by lockdown. Were all in this together? But not in a good way

— Mark Brumby (@brumbymark) April 28, 2020

The quoted supermarkets are not having such a jolly time of it following the release of the grocery market share data released this morning by market research group Kantar.

Take home grocery sales in Britain increased by 9.1% in the 12 weeks to 19 April, according to the latest figures from Kantar.

Spending at Sainsburys was 8.4% higher than this time last year and 7.2% higher at Tesco. Morrisons and Asda saw increases of 4.3% and 3.5% respectively.

Despite this, Wm Morrison Supermarkets PLC (LON:MRW) was down 1.6% at 183.2p, J Sainsbury PLC (LON:SBRY) was 1.6% weaker at 197.95p and Tesco PLC (LON:TSCO) was down 0.6% at 233.8p.

Take home grocery sales in Britain increased by 9.1% in the 12 weeks to 19 April as consumers settled into life under lockdown and stocked up on food and household essentials, according to the latest figures from Kantar. https://t.co/mdEEz1ximA

— Poultry Business magazine (@poultrybusiness) April 28, 2020

8.30am: Results weigh

The FTSE 100 got off to an insipid start with the benchmark held back by weak numbers from HSBC (LON:HSBA) and BP PLC (LON:BP), two of its biggest constituents.

The UK blue-chip benchmark subsided 9.5 points early on to 5,837.31. Overnight Wall Street closed in positive territory, but it was a different picture in Asia on Tuesday, where the markets registered a mixed performance as reality set in.

In London, HSBC shares lost 1.7% of their value in early trade after the Asia-focused banking giant announced its first-quarter profits had halved and told investors it was making financial preparations for the impact of the coronavirus lockdown.

“The fact HSBC has put aside a sizeable lump for coronavirus related loan defaults isnt exactly a surprise and were actually reasonably impressed at how performance has held up so far,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.

“Loan growth has offset pressure from lower interest rates, while increased volatility in financial markets can actually be good news for the investment bank. Meanwhile, the banks capital base has been able to absorb the impairment and an increase in the risk profile of the banks loans without deteriorating significantly – albeit with the help of the suspension of 2019s final dividend.”

Meanwhile, BP shares shed 2% as the oil major reported a historic US$4.36bn loss for its first quarter as the coronavirus (COVID-19) pandemic and a big drop in oil demand took its toll, although the firm maintained its dividend.

Away from the numbers, easyJet (LON:EZJ) landed with a bump, down 1.7% after a bout of profit-taking following Mondays positive performance.

Not only is the budget airline one of the major casualties of the coronavirus outbreak, but it is also embroiled in a resolve-sapping spat with its founder, Sir Stelios Haji-Ioannou, over new aircraft deliveries.

But on the upside, Games Workshop (LON:GAW) registered a 9% rise after saying it is on track to make profits of £70mln for the year ending next month. It has also secured a £25mln overdraft.

Proactive news headlines:

Gaming Realms PLC (LON:GMR) has reported reduced full-year losses and higher revenues for 2019 and said that trading for the first quarter of 2020 came in “ahead of expectations”. Posting results for the year ended December 31, 2019, the mobile gambling games firm reported a loss from continuing activities of £4.6mln, down from £5.6mln in 2018, while revenues jumped by 11.5% to £6.9mln.

Rockfire Resources PLC (LON: ROCK) has revealed that results from its January 2020 rock sampling programme have identified a gold-copper-nickel-cobalt-Platinum-palladium anomaly located only two kilometres north of the company's Plateau gold deposit on the Lighthouse tenement in North Queensland, Australia. In a statement, the new anomaly, named Split Rock, is likely to enhance the prospectivity of the immediate vicinity of Plateau. Split Rock shares access tracks with Plateau, enabling minimal mobilisation of rigs between the two prospects.

Sareum Holdings PLC (LON:SAR), the specialist small molecule drug development business, announced that its CEO, Dr Tim Mitchell, will give a presentation at BioTrinity 2020, which will be delivered digitally from April 28 to May 1, 2020. The group said the presentation will provide an update of Sareum's two proprietary TYK2/JAK1 kinase inhibitor programmes, SDC-1801 and SDC-1802, targeting autoimmune diseases and cancers, respectively. Dr Mitchell will also highlight the emerging potential of this mechanism to modulate the severe inflammatory responses and respiratory symptoms arising from coronavirus and other viral infections, it added. The presentation will be made through the BioTrinity virtual portal and will be available to registered participants during the conference and until at least May 9 at https://biotrinity.com/showcase. And a copy of the presentation will also be made available on the companys website.

ANGLE PLC (LON:AGL) (OTCQX:ANPCY) believes its ground-breaking liquid biopsy system could have a role to play helping guide trials of the next wave of cancer immunotherapies. Its Parsortix system is used to harvest circulating tumour cells. Now ANGLEs scientists are using whats called an immunofluorescence imaging assay to check for programmed death-ligand 1 expression. Known as PDL1, this particular protein helps keep immune cells from attacking non-harmful cells in the body. However, it also allows the cancer cells to trick the immune system and avoid being attacked as foreign. If a PDL1 expression from a patients cancer cells is high, she or he will likely benefit from immunotherapy.

Sure Ventures PLC (LON:SURE) has said that Sure Valley Ventures, in which it holds a 25.9% stake, participated in a €2.2mln (£1.9mln) funding round for a business named Buymie. Buymie has developed a platform which uses artificial intelligence (AI) to allow customers to access large grocery retailers and receive short notice delivery to a chosen destination in less than an hour. The company has signed a multi-year partnership with Lidl Ireland to provide a personalised online grocery service, while consumers are also able to use Buymie to shop from Tesco in the country.

IronRidge Resources Ltd (LON:IRR) said it has begun a second phase drill programme at the Zaranou gold project in Côte d'Ivoire. The license borders with Ghana and is along strike from significant operating gold mines including the five million ounce Chirano mine and the 5.5mln ounce Bibiani mine. In an update, the company said it will undertake approximately 8,000 metres of air core drilling and 1,000 metres of reverse circulation drilling.

Supermarket Income REIT PLC (LON:SUPR) announced that it has successfully raised £139.8mln from a substantially oversubscribed placing of 135,748,028 new ordinary shares at 103p each. The group said that, after careful consideration of the level and quality of demand in the Issue alongside the possibility of acquiring additional assets, its board had detRead More – Source

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