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FTSE 100 closes firmly higher as prospect of lockdowns easing buoys sentiment

Britain's blue-chip benchmark finished on Monday up over 94 points, or 1.64%, at 5,846

BP PLC -
London stocks headed north on Monday as investors' mood improves
  • FTSE 100 index finishes 1.64% ahead
  • Admiral dips after withdrawing special dividend
  • Supermarkets and housebuilders out of favour

5.10pm: FTSE 100 finishes positively

FTSE 100 index closed convincingly higher on Monday as markets are more optimistic about the easing of lockdown restrictions amid the pandemic.

Britain's blue-chip benchmark finished up over 94 points, or 1.64%, at 5,846.

"In recent weeks, a number of countries have taken tiny measures to reopen certain aspects of their economies, and that has spurred speculation about other nations following suit," said David Madden, at CMC Markets.

"Overnight, the Bank of Japan made it clear they are likely to throw more money at the problem as the central bank removed the limit on its Japanese Government Bond purchases, and it is poised to buy more corporate bonds and commercial paper. This week we will hear from the Fed and the ECB, so traders will be wondering if the central banks will also reveal plans to stimulate their respective economies," he added.

Over on Wall Street, as traders brace for a raft of first quarter company earnings, the Dow Jones added over 271 points, while the S&P 500 gained nearly 35. The Nasdaq index added over 91 at 8,725.

3.45pm: Housebuilders and supermarkets left behind

More than 4mln UK workers have been furloughed, the chancellor of the Exchequer, Rishi Sunak told parliament today.

The finance minister also revealed that more than 20,000 coronavirus business interruption loans have so far been approved.

The FTSE 100 was up 65 points (1.1%) at 5,818.

Among the blue-chips not getting with the programme are supermarkets and housebuilders.

Car insurer Admiral Group PLC (LON:ADM) was another in the red, down 0.6% at 2,357p, after it withdrew plans to pay a special dividend.

3.05pm: US markets on the front foot

US markets have opened higher, albeit not as strong as expected, as US oil prices take another tonking.

The Dow Jones industrial average was up 149 points (0.7%) at 23,931 and the S&P 500 waa up 26 points (0.9% at 2,863.

On the futures market, the price of West Texas Intermediate (WTI) for June delivery looks like it is going the same way as the May contract – negative – with the contract down US$4.74 (28%) to US$12.23 a barrel.

Brent crude for June delivery, meanwhile, is faring a little better, down US$1.82 to US$19.62 a barrel.

In London, the FTSE 100 has had a bit of mid-afternoon dip, ebbing to 5,815, up 64 points (1.1%) on the day.

1.40pm: US markets set to get off to a flyer

A strong start is in store for Wall Street, in keeping with the global trend.

Spread betting quotes suggest the Dow Jones industrial average will open on or around 24,000, which would represent a rise of 225 points from Friday’s close.

The S&P 500 is seen opening at 2,865, up 28 points.

“It's been a strong start to the week for global stock markets, with sentiment buoyed by more encouraging signs as countries around the world fight the coronavirus pandemic,” said Craig Erlam, the senior market analyst at OANDA Europe.

“Europe and North America have been the worst hit by the coronavirus so far but both are seeing improvements in new cases and deaths as the extreme lockdown measures bear fruit. We're by no way out of the woods, with a second wave almost inevitable in many people's eyes but this is encouraging and means we're a huge step closer to the re-opening of economies around the world,” he added.

In London, the FTSE 100 has been gently rising over the lunchtime trading session, hitting 5,842, up 90 points (1.6%).

US-focused tool hire firm Ashtead Group PLC (LON:AHT) leads the advance after a well-received trading update.

“Ashtead has weathered the first part of the current crisis rather well, buoyed by the fact its stores have been designated essential services and allowed to continue trading,” said Nicholas Hyett, an equity analyst at Hargreaves Lansdown.

“Rental revenue is lower but stable, and given the group’s forecasting positive free cash flow in all its modelling that should provide some reassurance Ashtead will emerge from the current disruption in one piece.

“Having said that Ashtead is a cyclical business. While survival is a good starting point the group needs the economy, and construction sector in particular, to be on an even keel if it’s to thrive. While government spending on infrastructure is likely to increase in the short term, a boom in the wider construction sector looks like a big ask,” he added.

Ashtead’s shares were up 6.4% at 1,947.5p.

12.20pm: Footsie can't quite sustain a triple-digit rise

The FTSE 100 can’t quite sustain a triple-digit gain and with sterling surging against the dollar is seeing its gains pared.

The FTSE 100 was up 80 points (1.4%) at 5,832.

On the foreign exchange markets, sterling has risen by three-quarters of a cent to US$1.2440, which won’t please the many big dollar-earners in the Footsie.

Oil prices are on the slide again, with Brent crude for June delivery 82 cents cheaper at US$20.62 a barrel.

Oil giants BP PLC (LON:BP.) and Royal Dutch Shell (LON:RDSB) don’t seem too fazed by the oil price weakness; the former is up 0.7% at 310.8p and the latter is 0.4% firmer at 1,353.6p.

Elsewhere in the oil sector, tiddler Aminex PLC (LON:AEX) topped the risers with a 45% increase to 0.725p after it formally received the extension of the Mtwara Licence from the Ministry of Energy of Tanzania, thus clearing one of the last obstacles to the signing of a farm-out agreement with ARA Petroleum Tanzania.

The company also announced that non-executive director Robert Ambrose has been appointed interim chief executive officer (CEO), replacing Tom Mackay.

On a day when the thinktank, the High Pay Centre, pointedly observed that FTSE 100 company that are claiming millions of pounds in government support for furloughed workers an average of £3.6mln before the coronavirus hit, Aminex scored a public relations hit with the news that Ambrose will take an annual salary of £60,000, compared to the £180,000 salary trousered by the previous CEO.

Sector peer Columbus Energy Resources PLC (LON:CERP), the oil and gas producer and explorer focused on onshore Trinidad and Suriname, was wanted after it said the Saffron well has discovered oil in the Lower Cruse and Middle Cruse, located in the South West Peninsula, onshore Trinidad.

Columbus’s shares rose by a third to 2p.

11.10am: Lockdown optimism drives markets

European markets are rising, apparently on hopes that lockdown restrictions will be eased.

The UK’s prime minister, Boris Johnson, has said it is too early for the UK to contemplate easing up on the physical distancing restrictions but it is a reflection, perhaps, of the FTSE 100’s international nature that the index is in step with other European indices, rising 93 points (1.6%) to 5,847.

“I know that there will be many people looking now at our apparent success and beginning to wonder whether now is the time to go easy on those social distancing measures,” the UK prime minister, Boris Johnson said in a speech this morning as he ruled out an early end to the UK’s lockdown.

Not everyone was convinced that many people will be looking at “our apparent success” – or rather, not everyone was convinced that the UK’s success has been apparent.

Pantheon Macroeconomics’ daily coronavirus update noted that UK deaths are falling faster than new cases “as increased testing finds more cases”.

“Sweden's cases and deaths might now be peaking too, though the weekend data could yet be revised up. Clear success in Sweden, which has not imposed strict lockdowns, would be encouraging to other European countries and US states seeking to re-open,” said Pantheon’s Ian Shepherdson.

“US confirmed case growth rose 2.9% yesterday, the smallest increase since the crisis began, and down from a 3.6% rise on the same day last week,” Shepherdson reported.

“The number of reported new cases rose by 27.6K, slightly more than on the same day last week, but given that tests were up 53% over the same period, this is a good result,” he declared.

One company that more than most would like to see lockdowns end sooner rather than later is hotels group Intercontinental Hotels Group PLC (LON:IHG).

The shares were up 4.6% at 3,518p after it revealed it had secured new financing to give it more liquidity and that it is an eligible issuer for the UK government’s COVID corporate financing facility.

“In March IHG said hotel demand was at the lowest levels ever seen and today’s results, unfortunately, support that. While RevPAR [revenue per available room] was down 25% in the first quarter overall, it was 55% lower in March, highlighting the real cost of lockdown on the business,” reported Emilie Stevens, an equity analyst at Hargreaves Lansdown.

“With earnings taking a real hit, it’s important IHG’s improved its funding position with access to total liquidity of $2bn. Lending restrictions attached to IHG’s borrowing have also been amended, providing the group which some much-needed breathing room, a minimum liquidity requirement of $400m has replaced all previous rules for now. IHG’s also joined Whitbread in the UK government’s COVID Corporate Financing pool too, borrowing £600m so far,” she added.

10.10am: Footsie adds to gains as Johnson's Damascene conversion continues

Things are getting strange in Westminster. The prime minister, Boris Johnson, has called on Britons to “contain your impatience” as the lockdown drags on.

“I refuse to throw away all the effort and the sacrifice of the UK people and risk a second major outbreak and huge loss of life and the overwhelming of the NHS,” said Johnson.

There was no mention this time in Johnson’s speech of the “‘ancient inalienable British right to go down the pub”.

Johnson delivered his address outside 10 Downing Street, resisting the urge to shake hands with all and sundry on his way to the podium.

The prime minister said it would refine the current restrictions when the time is right and pledged that more details would be outlined “in the coming days”.

The FTSE 100 lengthened its gains following Johnson’s speech, advancing to 5,850, up 98 points (1.7%).

 

9.30am: BP confirms it will go ahead with sale of its Alaska business

As is often the case, after a sharp initial movement the Footsie has moved into cruise mode.

London’s index of heavyweight shares was up 85 points (1.5%) at 5,838.

“Markets kicked off the week in a good mood thanks to a plethora of information about how certain countries plan to come out of lockdown and further central bank stimulus,” said Russ Mould, the investment director at AJ Bell.

“Investors are starting to be more hopeful that the virus has peaked in many parts of the world and so there will be a greater focus on reviving economies.

“The next two weeks should see businesses slowly start to reopen in places like Italy, Belgium and Switzerland, and there is talk that Australia may not be too far off the stage where it can begin to lift restrictions on public movement.

“The journey back to normality is likely to be very long but every small step towards getting people back to work and not stuck indoors should act as a positive catalyst for stock markets,” he added.

BP PLC (LON:BP.) was doing its bit to support the Footsie, with a 1.3% rise to 312.75p after it confirmed its commitment to completing the sale of its Alaska business to Hilcorp. The disposal was announced back in August of last year.

8.30am: Solid early gains

The FTSE 100 began what is expected to be a busy trading week firmly on the front foot, buoyed by Japan’s bond bail-out announcement that also lifted Asia’s main markets.

The index of UK blue-chips opened 77 points higher at 5,829.00.

Sentiment was aided by a belief the later-affected areas of the world such as Europe and the US are past peak pandemic.

Here at home, it is the first day back to work for Prime Minister Boris Johnson after his near-death encounter with coronavirus.

There is a suggestion in the press Monday morning he may be minded to ‘modify’ lockdown protocols rather than lift them; the aim being to allow certain businesses to begin trading.

“Attention will be on him, and in particular the government more broadly, to announce some sort of pathway out of lockdown, as it becomes increasingly apparent of how much economic damage is being done to the UK economy,” said Michael Hewson of CMC Markets.

The insurers Legal & General (LON:LGEN) and Aviva (LON:AV.), whose fortunes are tightly hitched to the market, were marked up early on, reflecting the rise of the Footsie. Both advanced 5.1%.

Elsewhere, British Airways owner IAG (LON:IAG) was up 4.8% amid hopes the furlough scheme will be extended further and that there may additional bailout measures for beleaguered UK carriers.

Ashtead (LON:AHT) stock rose 3.8% after the plant hire group’s 'cash optimisation' proposals were roundly applauded by the market.

There appeared to be a knock-on benefit for building supplies giant Ferguson (LON:FERG), which similar to Ashtead, has significant US exposure. Its shares were up 4.7%.

Finally, the market welcomed builder Redrow’s (LON:RDW) return to work with a 7.4% mark-up to the share price.

Proactive news headlines:

Columbus Energy Resources PLC (LON:CERP) has confirmed new discoveries as it announced results from the hotly anticipated Saffron well located in the South West Peninsula, onshore Trinidad. Drilling began in October and testing took place in February. Saffron was drilled down to 4,634 feet and it encountered some 2,363 feet of gross sands across six intervals of interest (with net-to-gross stated at 47%). Oil discoveries have been confirmed in the Lower Cruse and Middle Cruse formations, Columbus said in a statement. Six intervals have been earmarked for testing, and, three have been done to date - two in the Lowe Cruse and one in the Middle Cruse.

Partners Aminex PLC (LON:AEX) and Solo Oil PLC (LON:SOLO) have announced an extension of the Ruvuma licence by Tanzania’s Ministry of Energy by one additional year, commencing April 17, 2020. Importantly, the extension was one of the last remaining conditions required for Aminex to complete a farm-out transaction with ARA Petroleum. It is expected that the partners will acquire 200 square kilometres of 3D seismic (estimated gross cost of US$7mln) and drill the Chikumbi-1 exploration well (at least US$15mln). These programmes are expected to provide key inputs into an application for a development licence for the Ntorya project area.

Tiziana Life Sciences PLC (LON:TILS) (NASDAQ:TLSA) said it has acquired the slow release version of an antibiotic drug used to treat cancer and which could be deployed in the fight against coronavirus (COVID-19). The nano-particle formulation Actinomycin D, or Act, was developed by Dr Kunwar Shailubhai, the company’s chief executive, during his time at Rasna Therapeutics. Tiziana is handing over to Rasna an initial US$120,000 and will make additional milestone payments of up to US$630,000.

Union Jack Oil PLC’s (LON:UJO) has said it's West Newton A-2 well, which is located onshore, north of the River Humber in East Yorkshire has been given the green light for a testing programme. In a statement, Union Jack said a positive decision document has been issued by Environment Agency to well operator Rathlin Energy. Union Jack holds a 16.665% interest in the well, which will now be advanced with Rathlin approved to use mechanical methods (pumpjack/nodding donkey) for testing.

Faron Pharmaceuticals Oy (LON:FARN) (NASDAQFIRSTNORTH:FARON) has said it is donating interferon beta-1a drug supplies to treat 2,000 patients taking part in a globally crucial coronavirus (COVID-19) study. The World Health Organisation's Solidarity trial is assessing four drug options, including the Faron candidate, known as Traumakine, in combination with the HIV drug lopinavir. They will be compared with the current standard of care to assess efficacy. Faron believes its interferon beta-1a drug may help protect against serious lung complications.

CentralNic Group PLC (LON:CNIC) has said trading in the first quarter of 2020 was in line with expectations despite the spread of the coronavirus (COVID-19) as it reported record 2019 results. The provider of internet domain names and internet services also said it does not expect its business to be significantly hit by COVID-19. In its results statement covering the year ended December 31, 2019, CentralNic celebrated a record year with revenue up 95% to US$109.2mln from US$56.0mln in 2018; excluding the effect of acquisitions, revenue rose 61% year-on-year. Adjusted underlying earnings (EBITDA) were up 96% to US$17.9mln from US$9.1mln the previous year.

Greencoat UK Wind PLC (LON:UKW) has agreed to buy the South Kyle wind farm for £320mln from Vattenfall Wind Power. The consideration for the purchase will be due when the farm commences commercial operations, which is expected in the first quarter of 2023. South Kyle is located five kilometres to the east of Dalmellington on the boundary of Dumfries & Galloway and East Ayrshire in Scotland.

88 Energy Limited (LON:88E) (ASX:88E) has launched an all-paper takeover bid for XCD Energy, intending to create a consolidated Alaska-focused exploration company. XCD holds some 195,373 acres on the North Slope in Project Peregrine which would add to 88 Energy’s 480,000 acres which span across the Project Icewine and Yukon licences. The XCD assets are described as “attractive and complimentary”. 88 Energy’s unsolicited bid is worth A$7.5mln - the offer is 1.67 new 88 Energy shares per XCD share, plus 0.5 88 Energy shares per XCD listed option - and it already has the backing of major XCD shareholders accounting for 18.5% of the equity and 6.8% of the options.

Crossword Cybersecurity PLC’s (LON:CCS) chief executive has predicted “a big year” ahead for the firm as it reported higher revenues for its 2019. For the 12 months ended December 31, the AIM-listed group posted revenue of £1.3mln, up from £1.07mln in the prior year, while its pre-tax losses fell to £2.1mln from £2.13mln. In the statement, Crossword's CEO Tom Ilube said the company’s pipeline is currently standing at around £6mln, split between both its products and consulting services, and that these funds will allow the firm to drive business growth over the next 12 months.

ADM Energy Plc (LON:ADME) has told investors that operations at the OML 113 assets in Nigeria remain largely uninterrupted during the global coronavirus pandemic, with production levels remaining stable. In a corporate update, the company said it is “well-positioned to withstand current market volatility", with coronavirus (COVID-19) protection measures implemented to reduce the cost base. It also said it has secured finance for working capital purposes and has agreed to a two-month extension for a refundable deposit payment.

accesso Technology Group PLC (LON:ACSO) has said its current liquidity will support its operations into the autumn as it predicted customer demand at its client theme parks and attractions is “likely to rebound strongly” following the coronavirus pandemic. In a business update on Monday, the electronic queuing and ticketing specialist said it has US$19.5mln currently available in cash and undrawn facilities, adding that its monthly operating cost run rate has been reduced by US$2.6mln to around US$3.8mln through several cost-saving initiatives. The company said it is in “constructive discussion” with an existing credit provider to increase its liquidity headroom as well as considering additional funding options.

In a separate announcement, accesso said it has appointed Fern MacDonald as its chief financial officer with immediate effect. MacDonald has served as accesso’s senior vice president of finance since May 2018, before which she worked as executive vice president, finance, at workforce management solutions firm Workforce Logiq.

Vast Resources PLC (LON:VAST) has confirmed that the first shipment of equipment for the construction of its Baita Plai project in Romania has arrived in the port of Constanta in Romania. The equipment, which includes railways tracks and locomotives, is currently being loaded onto trucks for transport to Baita Plai, which is located around 500 miles from Constanta. In a statement, Vast said the shipping schedules of the remaining containers of equipment remain on track. The first two shipments contain the integral equipment required to commence production at Baita Plai, it added.

Corero Network Security PLC (LON:CNS) has revealed that its chief executive officer (CEO), Ashley Stephenson, is to switch roles to become the chief technology officer. In his place, the company announced the appointment of Lionel Chmilewsky as an executive director and CEO designate of the company with effect from May 1. Chmilewsky has more than 30 years’ experience in the networking and telecommunications business and was most recently CEO of Cambridge Broadband Networks Limited, a wireless access solutions company. Meanwhile, Corero has also found itself a group financial director. Neil Pritchard, who has held senior financial positions at several companies such as Delta PLC and Synthomer PLC, will replace Andrew Miller as the company’s bean-counter.

Directa Plus PLC (LON:DCTA) has secured an EU-wide patent for Grafysorber, its graphene-based technology to treat water and sludge contaminated with hydrocarbons. The AIM-listed firm said the patent covers produced waters, refinery waters, and any kind of wastewater which contains relatively low but still dangerous amounts of hydrocarbons.

Chaarat Gold Holdings Ltd (LON:CGH) has closed its US$13.8mln fundraising following the issue of 42mln shares at 26p per share. Following admission, Chaarat chairman Martin Andersson will hold just under 40% of the shares, via a major stake held through his investment vehicle Labro, and a smaller personal holding.

Conroy Gold and Natural Resources PLC (LON:CGNR) said on Friday that it has received £25,000 of outstanding monies from a participant in its recent £302,000 fundraising. A further £150,000 remains outstanding from a participant in the placing element of the fundraising, the group added in a statement. The company has received some money from the investor in question, however, and said it “reasonably expects settlement in full” based on assurances given to it by its broker Brandon Hill Capital.

Caledonia Mining Corporation PLC (LON:CAL) announced that its annual general meeting (AGM) for 2020 will still be held on May 6, 2020, but that, as Jersey's Minister for Health and Social Services has now extended the coronavirus lockdown measures until May 11, attendance will be convened with the minimum necessary quorum of two shareholders, and other shareholders will not be allowed to attend. The group said shareholders are strongly encouraged to exercise their vote by appointing the chairman of the AGM or the management nominees in accordance with the instructions on the proxy form. It said the results of the voting will be announced as soon as practicable after the conclusion of the AGM.

Shield Therapeutics PLC (LON:STX), a commercial-stage, pharmaceutical company with a focus on addressing iron deficiency with its lead product Feraccru/Accrufer (ferric maltol), a novel oral iron treatment, announced that further to the announcement issued on April 22, Tim Watts has joined its board with immediate effect as the group's chief executive officer.

6.35am: Front foot start predicted 

The FTSE 100 looks set to take its cue from Asia’s main markets by kicking off the new trading week firmly in positive territory.

The UK blue-chip index is predicted by the spread betting firms to rise 84 points to 5,836.23 amid guarded optimism the coronavirus (COVID-19) curve in Europe and the US has begun to flatten 

Sentiment was lifted by a bond-buying scheme launched by Japan’s central bank with the Nikkei 225 index gaining 1.5% on Monday, and China’s main markets following suit.

Outside of this, prices were buoyed by the hope the world is now past peak pandemic with the number of new COVID-19cases starting to nudge lower.

“Whether COVID-19 returns in a second wave is a story for another day,” said Jeffrey Halley, OANDA’s senior Asia-Pacific analyst. “The hopes that even a partial return to regular economic activity begins, to draw a line under the economic carnage wrought by the pandemic, should see markets such as equities outperform this week.”

On the oil market, prices continued to groan under the strain of continued high supply of crude and ebbing demand with West Texas Intermediate bobbing around US$15.50 a barrel.

Turning to the week’s scheduled news, five of the UK’s largest companies are earmarked to report earnings with eyes on whether four of them will continue with their generous dividend payments.

Both oil majors BP (LON:BP.) and Shell (LON:RDSB) are expected to maintain some sort of payout even in the face of radically lower crude prices.

It is unclear, however, what sort of cash conservation measures, if any, will be taken by pharma giants GlaxoSmithKline (LON:HSK) and AstraZeneca (LON:AZN).

Of course, the banks have agreed to defer divis, which means no return from HSBC (LON:HSBA) investors.

Shell and BP were responsible for just under a quarter of the £75bn paid out by FTSE 100 companies last year, so they will be closely watched.

Just 20 blue-chip companies are currently forecast by analysts to return £54bn in dividends this year, out of a possible total of £63bn now expected from the biggest listed companies.

Significant announcements expected on Monday:

Trading updates: Mind Gym PLC (LON:MIND)

Finals: SIG PLC (LON:SHI), CentralNic Group PLC (LON:CNIC), Blackbird PLC (LON:BIRD), Lok’N Store Group PLC (LON:LOK), SpaceandPeople PLC (LON:SAL)  

Around the markets:

  • Pound worth US$1.2439, up 0.58%
  • Gold changing hands for US$1,741.50, up US$5.90
  • Brent crude US$20.58 a barrel, down 59 cents.

City headlines: 

Financial Times

  • BoE warns bank loan reserves risk choking business funding
  • China’s industrial profits plunge 35%
  • Britain risks losing access to valuable European legal pact
  • Global coronavirus death toll could be 60% higher than reported

Times

  • John Lewis seeks outside backer for services move
  • Firms face ‘extra barriers’ for coronavirus loans

Telegraph

  • Richard Branson races to find Virgin Atlantic buyer
  • Quarantine threat to tourism puts the ailing travel sector on the back foot
  • UK faces longer recession as Britons refuse to go out even after lockdown is lifted

Guardian

  • Bosses appeal to government for lockdown exit plan
  • FTSE 100 firms using furlough scheme pay CEOs average of £3.6m
  • Coronavirus: UK banks may need to put aside £5bn to cover losses in first quarter

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