ADVFN Morning London Market Report: Thursday 21 May 2020

Share On Facebook
share on Linkedin

London open: Stocks fall as Sino-US relations sour, new Covid cases rise


London stocks fell in early trade on Thursday as growing tensions between the US and China and a rise in new coronavirus cases weighed on sentiment.

At 0840 BST, the FTSE 100 was down 0.7% at 6,024.63.

The downbeat mood came after the head of the World Health Organization warned on Wednesday that the number of new coronavirus cases hit a daily record high this week as countries across Europe begin to lift lockdown measures.

Meanwhile, relations between the US and China soured overnight, after the US Senate passed a bill that could ban some Chinese companies from listing on American exchanges. US President Donald Trump inflamed the situation further by taking to Twitter to lash out against China over the coronavirus pandemic.

Spreadex analyst Connor Campbell said: “Donald Trump’s increasingly inflammatory election tactics weighed heavy on the markets on Thursday.

“Having already recently threatened to pull the US out of the WHO due to the organisation’s ‘pro-China’ bias, while blaming the pandemic on the ‘incompetence’ of the rival superpower, Trump went further on Wednesday night, accusing Beijing of spreading ‘pain and carnage’ throughout the world. He also went on to state that China is on a ‘massive disinformation campaign’ because they want Joe Biden in the White House.

“Crucially, at the same time as this Twitter storm, the US government published a 20-page report detailing China’s so-called ‘malign activities’, covering its economic and military policies, as well as its human rights violations.”

In equity markets, pub and hotel operator Whitbread was under pressure after saying it was raising £1bn in a rights issue to bolster its balance sheet against the impact of the pandemic as it warned of a potential loss in 2021.

Car dealership Inchcape was in the red as it posted a 32% decline in revenue for the four months to the end of April and a 76% slump in like-for-like revenues in April, mainly due to Covid-19 disruption.

Pets at Home was also weaker as it said full-year revenue topped £1bn for the first time but warned that first-half pre-tax profit will take a hit from the virus outbreak.

Building materials group Grafton was knocked lower by a downgrade to ‘neutral’ at Davy.

On the upside, Intertek was the standout gainer after saying it would pay its final dividend as the company reported a 4.6% fall in revenue for the first four months of 2020.

EasyJet rallied as the budget airline said it would begin to restart flying on 15 June with extra measures to reduce the risk of infection from Covid-19.


Top 10 FTSE 100 Risers

Sponsored by
76.4% of retail CFD accounts lose money.


# Name Change Pct Change Cur Price
1 Marks And Spencer Group Plc +10.77% +9.24 95.04
2 Experian Plc +7.38% +186.00 2,708.00
3 Dcc Plc +6.01% +368.00 6,488.00
4 Ashtead Group Plc +3.98% +90.00 2,351.00
5 Rightmove Plc +3.97% +20.00 523.20
6 United Utilities Group Plc +3.20% +28.60 923.60
7 Smith & Nephew Plc +2.97% +48.00 1,661.50
8 Relx Plc +2.85% +52.50 1,893.50
9 Intertek Group Plc +2.70% +130.00 4,938.00
10 Royal Dutch Shell Plc +2.67% +35.00 1,344.20


Top 10 FTSE 100 Fallers

Sponsored by
76.4% of retail CFD accounts lose money.


# Name Change Pct Change Cur Price
1 Micro Focus International Plc -6.09% -27.50 424.10
2 Taylor Wimpey Plc -4.82% -7.00 138.30
3 Berkeley Group Holdings (the) Plc -4.78% -196.00 3,902.00
4 Land Securities Group Plc -4.48% -25.20 537.00
5 Barratt Developments Plc -3.85% -19.40 484.00
6 Carnival Plc -3.74% -37.50 964.00
7 Persimmon Plc -3.46% -76.00 2,120.00
8 Whitbread Plc -3.43% -101.00 2,843.00
9 Itv Plc -2.67% -2.04 74.46
10 Burberry Group Plc -2.47% -35.00 1,381.50


US close: Stocks close higher as markets shrug off Trump’s twitter fingers

US stocks closed higher on Wednesday, with major indices clawing back most of the losses recorded in the previous session despite some heightened rhetoric from the President aimed at China.

At the close, the Dow Jones Industrial Average was up 1.52% at 24,575.90, while the S&P 500 was 1.67% firmer at 2,971.61 and the Nasdaq Composite saw out the session 2.08% stronger at 9,375.78.

The Dow Jones closed 369.04 points higher on Wednesday, all but reversing its 390 point drop in the previous session that came after a report raised concerns about trial results for Moderna’s potential Covid-19 vaccine

As far as Wednesday was concerned, strong results from home improvement retailer Lowe’s despite ongoing coronavirus lockdowns helped buoy sentiment throughout the session after the group’s first-quarter same-store sales increased 11.2% year-on-year. Department store giant Target also pointed to a 10.8% increase in same-store sales on the back of some improved digital sales.

In terms of US-Sino relations, Markets seemed to shrug a heightened level of rhetoric from Donald Trump on Wednesday.

Trump tweeted: “Some wacko in China just released a statement blaming everybody other than China for the Virus which has now killed hundreds of thousands of people. Please explain to this dope that it was the ‘incompetence of China’, and nothing else, that did this mass Worldwide killing!”

Also still in focus were comments from Federal Reserve chairman Jerome Powell and treasury secretary Steven Mnuchin in front to the Senate Banking Committee on Tuesday.

Mnuchin said the Treasury and the Federal Reserve were both “fully prepared to take losses” on the remaining capital from the Covid-19 bailout programmes.

He added that he was prepared to distribute the entire $500bn allocated to help struggling businesses impacted by the pandemic, while Powell reiterated the Fed’s commitment to efforts aimed at keeping markets functioning and getting cash to Americans that needed it most during the crisis.

Market participants were also continuing to monitor how the reopening of several US states was progressing, with Connecticut allowing consumers to dine in at restaurants, while New York Governor Andrew Cuomo said the outbreak in the Empire State was right back to where it started.

On the macro front, mortgage applications to purchase a home rose 6% week-on-week in the US, according to the Mortgage Bankers Association‘s seasonally adjusted index. Purchase volume was just 1.5% lower than twelve months earlier, a sharp recovery from just six weeks ago when purchase volume was down 35% year-on-year.

Elsewhere, minutes from the Fed’s April meeting revealed deep concerns at the central bank about both the current state of the economy and its future.

Minutes from the 29 April meeting concluded with the Federal Open Market Committee holding steady on interest rates and discussing measures to come. However, while the minutes indicated that more action was likely still to come, they did not specify when – with members saying “further clarity” on asset purchases would likely be needed “later this year”.


Thursday newspaper round-up: Top earners, UK holidays, care homes

The highest paid 1% of British earners received nearly 17% of all the country’s income ahead of the Covid-19 crisis, according to a study making allowance for the concentration of taxable capital gains among the better off. Analysis by Warwick University, the London School of Economics and the Resolution Foundation of previously confidential HMRC data showed that the top 1% had a growing and much bigger slice of income than previously thought. – Guardian

Holidays within the UK could return as early as the beginning of July, the culture secretary has announced, saying that the government had ambitious plans to revive the tourism sector. Speaking at the daily Downing Street briefing, Oliver Dowden said any return of domestic holidays would have to be done cautiously, as reopening the industry only to close it again would be more damaging. – Guardian

Up to 1,000 care homes are predicted to close as financial pressures heaped on the sector by coronavirus could soon make business unsustainable, experts have said. At least two homes have already shut their doors temporarily. The closures are expected to trigger a domino effect across the long-term care sector, which employs more people than the NHS and is estimated to be worth about £31bn. – Telegraph

The biggest shake-up of insolvency laws for two decades has been launched to prevent a slew of coronavirus bankruptcies. Landlords will be temporarily banned from making legal claims for rent owed by businesses hit by Covid-19 under legislation introduced in the House of Commons on Wednesday. – Telegraph

PWC is being sued by the founder of Matalan over “negligent” advice on how to avoid paying taxes when he moved to Monaco. John Hargreaves, 76, who set up the retailer in 1985, moved to the tax haven in 2000. He alleges that the accountancy firm was negligent when it advised him on his move, which he timed so that he could avoid paying capital gains and income taxes when he sold £237 million of shares in Matalan. – The Times


CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

Do you want to write for our Newspaper? Get in touch:

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20201001 02:17:33