Rio Tinto to curtail some operations, JD Sports pulls guidance
By Josh White
Date: Tuesday 24 Mar 2020
(Sharecast News) - London open
The FTSE 100 is expected to open 226 points higher on Tuesday, having closed down 3.79% at 4,993.89 on Monday.
Stocks to watch
Rio Tinto 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. In Canada the company is working with the authorities to reduce its business activity to a minimum after an order from the premier of Quebec.
JD Sports Fashion said it was pulling guidance and delaying publication of full year results after the UK government ordered nonessential shops to close down in response to the Covid-19 pandemic.
Dunelm Group updated the market given the "rapidly changing developments" around the Covid-19 coronavirus outbreak on Tuesday, confirming it had now closed its stores entirely, having previously planned to offer click and collect and deliveries for the vulnerable. The FTSE 250 home furnishings retailer said it had access to ?175m of financing facilities through a committed revolving credit facility of ?165m and a ?10m overdraft, was in contact with suppliers and landlords, and intended to make use of the government's job retention scheme. It said that in the past two weeks, it had seen an 8.8% reduction in like-for-like sales as the pandemic led to a drop in footfall.
Newspaper round-up
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 the 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 allowing 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
US close
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."
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