ADVFN Morning London Market Report: Tuesday 24 March 2020

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London open: Stocks rise on Asian cues; PMIs in focus

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London stocks rose in early trade on Tuesday, taking their cue from a positive session in Asia, which was boosted by the Federal Reserve’s latest stimulus announcement.

At 0840 GMT, the FTSE 100 was up 3.6% at 5,172.24, while sterling rose 0.9% against the dollar to 1.1644.

London Capital Group analyst Jasper Lawler said: “The Federal Reserve kitchen sinking it has gone some way to calm markets. With a little time to review, there were some astonishing measures taken.

“For us there were three standout measures were Number 1: Open ended QE, which means the Fed will just keep buying as they see fit with no restraint. Number 2: Lending directly to businesses completely bypassing high street banks in the process. Number 3: Corporate bond buying where the Fed can even buy corporate bond ETFs in the stock market.”

Market participants were still waiting for Congress to agree on a roughly $2trn rescue package.

Meanwhile, news that Italy was starting to a see a slowdown in new cases of the coronavirus also helped to underpin sentiment.

On home shores, Prime Minister Boris Johnson declared the start of a three-week lockdown on Monday evening, albeit a much less restrictive one than Germany, Italy and France.

Later in the day, all eyes will be on the release of UK manufacturing and services PMIs.

Spreadex analyst Connor Campbell said: “Analysts are estimating that the UK manufacturing reading will arrive at 45.1 against February’s 51.7, with its services counterpart at 45.0 compared to last month’s 53.2. It wouldn’t exactly be a surprise, however, to see that both sectors had contracted far faster than those estimates would suggest.”

In equity markets, miner BHP was the standout gainer, closely followed by oil giants Shell and BP, as investors sifted through a few more Covid-19 updates.

Rio Tinto said it will curtail operations in South Africa and Canada to comply with measures imposed by the countries’ governments in response to the Covid-19 crisis. The FTSE 100 miner said all mining at its Richards Bay Minerals operation in South Africa would cease by midnight on 26 March for three weeks.

JD Sports Fashion said it was pulling guidance and delaying publication of full-year results after the UK government ordered non-essential shops to close down in response to the Covid-19 pandemic.

Homeware retailer Dunelm confirmed it was closing all of its stores and said it will not be paying a dividend due to the virus outbreak.

House builder Redrow cancelled its dividend and said it expected its sales rate to be “seriously impaired” over the coming weeks, forecasting labour and materials shortages.

Miniature wargames manufacturer Games Workshop said its performance has been hit by the Covid-19 outbreak and that it will be closing its stores, headquarters, factory and warehouses in the UK and the US with immediate effect.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Royal Dutch Shell Plc +10.58% +113.00 1,180.60
2 Bhp Group Plc +10.22% +113.00 1,218.80
3 Evraz Plc +9.57% +20.10 230.20
4 Bp Plc +9.52% +24.45 281.35
5 Carnival Plc +9.25% +76.60 904.60
6 Royal Dutch Shell Plc +9.08% +102.40 1,229.80
7 Antofagasta Plc +7.79% +48.20 666.80
8 Intercontinental Hotels Group Plc +7.27% +188.50 2,780.50
9 Rio Tinto Plc +6.84% +212.00 3,312.00
10 Anglo American Plc +6.65% +72.60 1,164.40

 

Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Itv Plc -3.23% -1.94 58.08
2 Marks And Spencer Group Plc -1.85% -1.70 90.00
3 United Utilities Group Plc -1.83% -14.00 749.60
4 Persimmon Plc -1.71% -27.00 1,555.00
5 Severn Trent Plc -1.43% -29.00 2,005.00
6 Associated British Foods Plc -1.14% -18.50 1,609.00
7 Unilever Plc -1.03% -40.50 3,892.00
8 Rolls-royce Holdings Plc -0.42% -1.40 334.70
9 Melrose Industries Plc -0.32% -0.28 87.02
10 National Grid Plc -0.19% -1.50 798.20

 

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Share Type Amount Price Return Ex-Date Pay Date
Capital & Regional plc Final 11p £1.57 7.00% 02-Apr-20 26-May-20
Standard Life Aberdeen Plc Final 14.3p £2.05 7.00% 02-Apr-20 19-May-20
Provident Financial plc Final 16p £2.79 5.70% 02-Apr-20 22-May-20
Somero Enterprises Inc – Ordinary Shares – Reg S Final 11.123p(14c)(E) £2.12 5.20% 02-Apr-20 24-Apr-20
Phoenix Group Holdings Plc Final 23.4p £5.65 4.10% 02-Apr-20 19-May-20
Man Group Limited Final 4.052p(5.1c) £1.02 4.00% 02-Apr-20 15-May-20
Mondi Final 49.475p(55.72¢) £13.00 3.80% 02-Apr-20 14-May-20
TP ICAP Plc Final 11.25p £3.17 3.50% 02-Apr-20 19-May-20
IMI plc Final 26.2p £7.70 3.40% 02-Apr-20 15-May-20
Travis Perkins plc Final 33p £10.56 3.10% 02-Apr-20 13-May-20
Moneysupermarket.Com Group Plc Final 8.61p £2.76 3.10% 02-Apr-20 14-May-20
Taylor Wimpey Final 3.8p £1.57 2.40% 02-Apr-20 15-May-20
Melrose Industries Plc. Final 3.4p £1.41 2.40% 02-Apr-20 20-May-20
Synectics Plc Final 3.5p £1.48 2.40% 02-Apr-20 07-May-20
CLS Holdings Final 5.05p £2.33 2.20% 02-Apr-20 29-Apr-20
Intercontinental Hotels Group Final 68.246p(85.9c) £33.32 2.00% 02-Apr-20 14-May-20
ConvaTec Group Plc Final 3.162p(3.98c) £1.63 1.90% 02-Apr-20 14-May-20
VinaCapital Vietnam Opportunity Fund Limited Interim 4.688p(5.9c)(E) £2.47 1.90% 02-Apr-20 24-Apr-20
Murray International Trust plc Quarterly 17.5p £9.41 1.90% 02-Apr-20 15-May-20
Invesco Enhanced Income Limited Quarterly 1.25p £0.68 1.80% 02-Apr-20 30-Apr-20
Henderson High Income Trust plc Quarterly 2.475p(E) £1.43 1.70% 02-Apr-20 24-Apr-20
Smiths Group plc Interim 14.6p(E) £10.16 1.40% 02-Apr-20 24-Apr-20
Lowland Investment Co plc Quarterly 16p(E) £11.20 1.40% 02-Apr-20 30-Apr-20
Fisher (James) & Sons Final 23.4p £16.42 1.40% 02-Apr-20 08-May-20
Smith & Nephew plc Final 18.353p(23.1c) £13.19 1.40% 02-Apr-20 06-May-20
Chemring Group plc Final 2.4p £1.96 1.20% 02-Apr-20 24-Apr-20
Finsbury Growth & Income Trust Plc Interim 8.5p(E) £6.95 1.20% 02-Apr-20 15-May-20
Schroder Income Growth Fund plc Quarterly 2.5p(E) £2.20 1.10% 02-Apr-20 27-Apr-20
Primary Health Prop. Quarterly 1.475p(E) £1.40 1.10% 02-Apr-20 22-May-20
Ferguson Plc. Interim 55.137p(69.4c)(E) £53.82 1.00% 02-Apr-20 28-Apr-20
Capital Partners plc Interim 17.5p £17.96 1.00% 02-Apr-20 30-Apr-20
Softcat Plc Interim 5.1p(E) £9.37 0.50% 02-Apr-20 08-May-20
F&C Investment Trust Plc Quarterly 2.97p(E) £5.77 0.50% 02-Apr-20 06-May-20

 

US close: Stocks sink as investors hold breath for stimulus

Shares on Wall Street finished in the red after a turbulent session on Monday, even after the US central bank announced its plans for open-ended asset purchases, as traders expressed their disappointment that a proposed $1.6trn government spending package had failed to pass muster overnight in the Senate.

The Dow Jones Industrial Average ended the session down 3.04% at 19,591.93, the S&P 500 lost 2.93% to 2,237.40, and the Nasdaq Composite was 0.27% weaker at 6,860.67.

An hour before the opening bell, the Federal Reserve opened the door to unlimited purchases of Treasury and mortgage securities , and agency commercial mortgage-backed securities, alongside a raft of other credit facilities for employers and consumers.

In the background, traders were also keeping a close eye on the latest lockdown measures across the globe in response to the pandemic.

“As long as we continue to see this kind of exponential growth around the world, the case for a stock market bounce is weak,” said Oanda senior market analyst Craig Erlam.

“Even stability will be hard to come by. If investors hate uncertainty, they’ll despite this.

“The v-shaped recovery is a hope of the past, everyone is now just hoping that the temporary unemployment spike doesn’t become more permanent or we have a real problem on our hands.”

At the weekend, in remarks to Bloomberg, St Louis Federal Reserve chief James Bullard said the US economy might shrink to half its size in quarterly annualised terms during the second quarter, resulting in a spike in the rate of unemployment to 30%.

He reportedly also laid out the case for a “powerful” fiscal programme that would substitute for the $2.5trn of lost income over the three months to June and eventually ensure a strong recovery.

Dollar General slipped 0.19% despite announcing 50,000 new hires, mostly temporary, by the end of April, to meet heightened demand for household essentials.

In the retailing space, JP Morgan slashed its target prices on a raft of companies, including Urban Outfitters from $25 to $18, Abercrombie & Fitch from $16 to $10, and Kohl’s from $42 to $22.

Shares in Urban Outfitters were down 10.24%, Abercrombie & Fitch was off 5.41%, and Kohl’s lost 17.41.%.

 

Tuesday newspaper round-up: Hinkley Point, Cineworld, supermarkets, pensions

Thousands of workers from across the country will continue to gather on the Hinkley Point C nuclear site – but work on the £106bn HS2 project could be halted – amid differing approaches in the construction industry to physical distancing aimed at containing the spread of Covid-19. Some of the 4,000-strong workforce at Hinkley, Britain’s biggest construction project, have raised concerns over an outbreak of coronavirus at the Somerset site after the government shut down restaurants, pubs and schools to contain the outbreak elsewhere. – Guardian

Former and current employees of the UK’s biggest cinema chains are protesting at treatment by their employers in the wake of the national cinema shutdown due to the coronavirus outbreak. The Cineworld Action Group has criticised the response from Cineworld CEO Mooky Greidinger after widespread outrage over to company’s decision to terminate the employment “with immediate effect” of staff working at both Cineworld and its “boutique” arm Picturehouse. – Guardian

You work for a chain of supermarkets. It is 2005. Alongside others, your job is to oversee the supply and keep the shelves stocked from the company’s headquarters. Your boss asks your team to “stress test” the systems in case of a pandemic, although there is no sign of one. You are shown fake news bulletins as the situation deteriorates. You go through multi-day exercises to keep the nation fed. This is not an exercise of imagination. Like governments across the world, supermarkets prepare for such scenarios. – Telegraph

Thousands of retail, hospitality and leisure firms have been given a last-minute reprieve allow them to suspend rent payments to landlords for at least three months. Landlords will be banned from evicting commercial tenants during the period as part of the latest government support for businesses during the coronavirus crisis. – Telegraph

About 7.5 million low and moderate earners in Britain have lost between 13 per cent and 18 per cent of their pension pots since the coronavirus crisis began. The National Employment Savings Trust, which is the default pension fund used by 400,000 employers auto-enrolling their staff, said that its members had avoided the worst extremes of the stock market slump, but were not immune. – The Times

Banks have been inundated with requests for emergency loans as a government-backed scheme that could underwrite more than £1.2 billion of credit to small businesses was launched. However, small companies whose trade has been damaged by the coronavirus pandemic said yesterday that they were struggling to reach their lenders as they sought access to the loans. – The Times

 

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