London midday: Stocks push up despite dismal UK data
By Michele Maatouk
Date: Tuesday 24 Mar 2020
(Sharecast News) - London stocks were firmly in the green by midday on Tuesday, extending gains despite the release of dismal UK data, with sentiment underpinned by the Federal Reserve's latest stimulus package.
The FTSE 100 was up 4.2% to 5,201.62.
The gains came despite the release of data showing that the coronavirus caused a record slump in UK business activity even before the government imposed extraordinary measures to curb the spread of the disease.
The IHS Markit/CIPS flash purchasing managers index plunged to 37.1 in March from 53.0 in February. The result was the lowest recorded, exceeding the fall at the peak of the financial crisis, and was far below expectations for a score of 45.0.
The latest industrial trends survey from the Confederation of British Industry was nothing to rave about either, showing that the total orders balance fell to -29 in March from -18 in February. Still, this was above consensus expectations of -35.
IG said: "As the Fed turns its stimulus efforts up to 11, and even Germany mulls over some fiscal stimulus for the 'post-virus economy', perhaps the most encouraging comment we have seen so far, investors have been able to put the dire PMI figures this morning behind them. Everyone was prepared for a set of shockers, and that is precisely what we got, but they are not a surprise; it is at times like this that the market's propensity to look forward is demonstrated most effectively.
"While the headlines major on the UK lockdown and the dire PMI figures, investors are looking to a world beyond March and April. New cases and deaths in Italy have been declining for several days, and if the US and UK follow this pattern eventually, then worrying about more bad news will be old news.
"Signs of life in the market, even in the hard-pressed FTSE 100, are there to be seen, and the 25% bounce in BP, along with double-digit percentage gains in Shell, point towards a bigger rebound for equities. Both companies are holding above their 2016 lows, which at least provides hope they have found a floor, at least for now."
Meanwhile, market participants were still waiting for Congress to agree on a roughly $2trn rescue package.
In equity markets, corporate releases were almost exclusively Covid-19 updates again.
UK insurer Prudential was the standout gainer on the FTSE 100 after saying it was actively looking at other options for its US unit Jackson along with plans for a minority public offering, as market turmoil continued due to the coronavirus outbreak. It also said it remains "financially resilient" in the face of the pandemic, which has hammered financial markets.
Taylor Wimpey fell after it scrapped almost ?500m of dividends as the housebuilder halted construction and closed show homes in response to the Covid-19 crisis. Fellow housebuilder Redrow - which has already drawn criticism for deciding to keep its sites open - cancelled its dividend and said it expected its sales rate to be "seriously impaired" over the coming weeks. It pointed to labour and materials shortages as the UK government ordered restrictions on movement to combat the coronavirus.
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 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 pulled guidance and said it was delaying publication of full-year results after the UK government ordered non-essential shops to close down in response to the Covid-19 pandemic.
Retailer Dunelm confirmed it was closing all of its stores and said it will not be paying a dividend due to the virus outbreak.
Miniature wargames manufacturer Games Workshop said its performance had 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.
Market Movers
FTSE 100 (UKX) 5,201.62 4.16%
FTSE 250 (MCX) 13,605.67 4.03%
techMARK (TASX) 3,013.53 2.27%
FTSE 100 - Risers
Prudential (PRU) 913.20p 14.69%
Royal Dutch Shell 'B' (RDSB) 1,203.20p 12.70%
Evraz (EVR) 236.10p 12.38%
Polymetal International (POLY) 1,267.00p 11.98%
Intermediate Capital Group (ICP) 750.00p 11.52%
Royal Dutch Shell 'A' (RDSA) 1,255.80p 11.39%
Phoenix Group Holdings (PHNX) 517.80p 10.77%
BP (BP.) 283.85p 10.49%
M&G (MNG) 128.40p 9.93%
RSA Insurance Group (RSA) 358.90p 9.79%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 190.80p -4.31%
Taylor Wimpey (TW.) 109.55p -3.95%
ITV (ITV) 58.00p -3.37%
Pennon Group (PNN) 967.40p -2.20%
Berkeley Group Holdings (The) (BKG) 3,085.00p -1.47%
United Utilities Group (UU.) 755.20p -1.10%
Johnson Matthey (JMAT) 1,834.50p -0.97%
AstraZeneca (AZN) 6,776.00p -0.81%
Ocado Group (OCDO) 1,257.00p -0.67%
Unilever (ULVR) 3,912.50p -0.51%
FTSE 250 - Risers
IWG (IWG) 161.60p 22.19%
Cineworld Group (CINE) 48.95p 20.57%
Hochschild Mining (HOC) 130.30p 19.21%
3i Infrastructure (3IN) 220.50p 18.55%
Energean Oil & Gas (ENOG) 428.50p 17.88%
Hyve Group (HYVE) 19.34p 14.17%
Kaz Minerals (KAZ) 325.60p 14.09%
Marston's (MARS) 29.02p 13.71%
Airtel Africa (AAF) 44.18p 13.51%
Centamin (DI) (CEY) 130.05p 12.26%
FTSE 250 - Fallers
Games Workshop Group (GAW) 3,986.00p -7.13%
WH Smith (SMWH) 855.50p -6.81%
Vistry Group (VTY) 569.50p -6.33%
B&M European Value Retail S.A. (DI) (BME) 272.40p -3.98%
Sirius Real Estate Ltd. (SRE) 46.80p -3.70%
Bellway (BWY) 1,894.00p -3.64%
Crest Nicholson Holdings (CRST) 183.70p -3.37%
Biffa (BIFF) 230.00p -3.36%
Ninety One (N91) 150.20p -3.10%
Pets at Home Group (PETS) 237.00p -3.03%
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