ADVFN Morning London Market Report: Thursday 26 March 2020

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London open: Stocks fall ahead of BoE announcement, US jobless claims

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London stocks fell in early trade on Thursday as nervousness set in ahead of the release of the latest US initial jobless claims and a Bank of England rate decision.

At 0830 GMT, the FTSE 100 was down 2.9% at 5,524.65.

Neil Wilson, chief market analyst at Markets.com, said: “Wall Street posted its first day of back-to-back gains in a month, as the US Senate got its act together and passed the $2tn stimulus package. But Asian equities have failed to carry through and US futures are weaker.

“Markets are fretting over the US jobless claims numbers due at 1230 GMT. The estimate is anything from 0.8m to 4m, against a usual print around the 200k level.”

Wilson said this will be the first real measure of just how far and how fast the world’s largest economy has contracted because of the coronavirus. “Investors are also fretting over the second wave of cases in Asia. Tokyo and Hong Kong are bracing for a second front in the war,” he said.

On home shores, meanwhile, the Bank of England’s policy announcement is due at midday, following two emergency rate cuts already this month to a record low of 0.1%.

“We may see the central bank commit to further measures to help stabilise the economy, having seen the bank already announce another £200bn of purchases of government and corporate bonds, bringing the total to £645bn,” said CMC Markets analyst Michael Hewson.

On the corporate front, the Covid-19 updates kept coming.

Electrical retailer Dixons Carphone reported a 24% fall in like-for-like sales growth in the UK in the three weeks to March 21 as it pulled guidance and placed its final dividend on review as the coronavirus pandemic hit trading.

British Land cancelled its dividend, waived £3m of rents from smaller tenants and halted work at big developments in response to the Covid-19 crisis.

Capital & Counties announced it was temporarily suspending its share buyback programme and will defer some rental payments due to the outbreak, as it said it is still is too early to assess the impact.

Self-storage company Big Yellow said it was considering a number of initiatives to conserve cash in the short term, that it will agree rent holidays or deferrals for some customers, and that a decision about its final dividend will be made “in due course”.

Weir Group said it was scrapping its dividend and cutting costs to withstand declining demand caused by crisis.

Elsewhere, RBS slid as its stock went ex-dividend.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Legal & General Group Plc +16.16% +26.10 187.65
2 Persimmon Plc +15.28% +258.50 1,950.00
3 Associated British Foods Plc +15.21% +244.50 1,852.00
4 Royal Bank Of Scotland Group Plc +13.72% +16.50 136.75
5 Rolls-royce Holdings Plc +13.40% +46.90 397.00
6 Intercontinental Hotels Group Plc +12.46% +380.00 3,430.00
7 Kingfisher Plc +12.40% +18.85 170.85
8 Easyjet Plc +12.21% +70.80 650.80
9 Whitbread Plc +11.86% +319.00 3,009.00
10 Standard Life Aberdeen Plc +11.77% +23.70 225.10

 

Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Rentokil Initial Plc -8.18% -30.30 340.10
2 Morrison (wm) Supermarkets Plc -3.37% -6.05 173.70
3 Coca-cola Hbc Ag -2.97% -53.50 1,746.50
4 Melrose Industries Plc -2.76% -2.85 100.50
5 Land Securities Group Plc -2.02% -12.40 600.40
6 Hsbc Holdings Plc -0.99% -5.10 509.90
7 Bt Group Plc -0.95% -1.26 131.56
8 Spirax-sarco Engineering Plc -0.82% -70.00 8,485.00
9 Ocado Group Plc -0.80% -10.00 1,240.50
10 Hikma Pharmaceuticals Plc -0.74% -13.50 1,800.00

 

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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 mostly higher as Boeing and cruise lines surge

Stocks on Wall Street finished mostly higher by the close on Wednesday, with Boeing among the leading risers, after reports that lawmakers had agreed on a $2trn economic relief bill that included measures aimed specifically at the aerospace and defence engineer.

The Dow Jones Industrial Average ended the session up 2.39% at 21,200,55 and the S&P 500 added 1.15% to 2,475.56, while the Nasdaq Composite slipped 0.45% to 7,384.30.

According to Chris Beauchamp, chief market analyst at IG, with the US stimulus bill set to pass, investors could now be less pessimistic about the short-term economic outlook – but not optimistic.

“Former Fed chairman Ben Bernanke is right in that the current crisis is more like a natural disaster than the 2008 financial crisis, which might mean a faster recovery, but the flow of bad economic data will be replaced in due course by disappointing earnings figures,” Beauchamp said.

“Only some heroic assumptions on future guidance can rescue what promises to be a dark earnings season, with all the attendant downside for stocks that this implies.”

The latest batch of macroeconomic data was mixed, with the Department of Commerce reporting that total durable goods orders increased at a 1.2% month-on-month pace to reach $249.41bn, compared to consensus expectations for a decrease of 0.8%.

Still, the underlying details of the report were a bit weaker, as excluding transportation, orders fell by 0.8% against January, which was more than double economist projections of a 0.3% fall.

House prices, meanwhile, increased at a 0.3% month-on-month pace in January and at a 5.2% clip year-on-year, with the latter the same as during the previous month, the Federal Housing Finance Agency said.

Economists had anticipated an annual increase of 4.9%.

In equities, Boeing shares were ahead 24.32%, alongside hefty double-digit gains for the likes of Norwegian Cruise Lines, which rose 23.08%, and Royal Carribean, which was 23.5% firmer.

 

Thursday newspaper round-up: Primark, unemployment, emergency Covid-19 loans

Gordon Brown has urged world leaders to create a temporary form of global government to tackle the twin medical and economic crises caused by the Covid-19 pandemic. The former Labour prime minister, who was at the centre of the international efforts to tackle the impact of the near-meltdown of the banks in 2008, said there was a need for a taskforce involving world leaders, health experts and the heads of the international organisations that would have executive powers to coordinate the response. – Guardian

Dyson, along with a separate consortium of manufacturers led by Airbus, is expecting the government to give it the green light to start making up to 30,000 medical ventilators from next week, after finalising plans to supply thousands of devices to help the NHS fight Covid-19. The proposals differ, with the Airbus-led Ventilator Challenge UK consortium planning to scale up production of existing models and also expected to win backing from Westminster. – Guardian

Retail stalwart Primark has refused to pay its rent bill as it seeks more support from its landlords in a sign of the chaos sweeping the high street. The firm is scrambling to save cash after being forced to shut all of its stores at a cost of £650m a month in lost sales. A host of firms are thought to have refused to pay rent on Wednesday, the day when quarterly bills are due for a huge number of retail players. That Primark is among them despite being one of the most resilient names in the industry shows the huge pressure firms are under. – Telegraph

Government measures to protect workers and businesses hit by the coronavirus pandemic will save almost 900,000 jobs, assuming that there is a recession as deep as the 2008 financial crisis, a leading consultancy has claimed. Capital Economics, which has warned that the economy may shrink by an unprecedented 15 per cent in the three months to June, compared with a peak-to-trough fall of 6 per cent 11 years ago, expects about 700,000 jobs to be lost as unemployment jumps from 3.9 per cent to 6 per cent. – The Times

The government and the banking industry are being urged to revisit the terms of emergency coronavirus loans after some directors were told that they would be personally liable for bank debts underwritten by the taxpayer. The business department is to talk with lenders to discuss how this burden could be lightened after a backlash over the onerous terms being asked of the owners of small companies. – The Times

 

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