London midday: Stocks maintain losses but BP, Shell buck trend
By Michele Maatouk
Date: Monday 30 Mar 2020
(Sharecast News) - London stocks were down but off lows by midday on Monday as oil prices slid and as investors came to terms with the prospect of a prolonged lockdown.
The FTSE 100 was down 1.1% at 5,451.40.
Investors were digesting news that the People's Bank of China has cut its seven-day reverse repo rate - which covers short-term loans - to 2.2% from 2.4%, which is the largest cut in half a decade.
Oanda analyst Craig Erlam said: "The news over the weekend was no more pleasant, with the death count nearing 34,000, up almost 7,000 since Friday. Italy will be hoping that two consecutive days of fewer deaths is cause for optimism, although it may be cautious optimism following last week's false dawn.
"The raft of global stimulus measures continued on Monday, with the People's Bank of China cutting the reverse repo rate by 20 basis points, Monetary Authority of Singapore lowering the midpoint of the currency band and Australia preparing to commit to $80 billion of spending over the next six months which includes wages subsidies.
"As we've seen already though, these measures aren't having the same impact in the market as they have in the past. While they may soften the blow of any downturn, they stand no chance of preventing it altogether and a global recession is coming. The hope though is that these measures will ensure it is as brief as possible and maybe even turbo charge the recovery."
In equity markets, Rolls-Royce slid as the Telegraph reported that the aerospace and defence engineer was facing a cash flow crisis due to the collapse in air travel caused by the coronavirus. Also on Monday, JPMorgan cut its estimates for the European civil aerospace sector and said there is now a 75% chance that Rolls-Royce will need to issue equity. JPM also said that Standard & Poor's and possibly other ratings agencies will downgrade RR to non-investment grade.
Aerospace engineer Meggitt was sharply lower.
Convenience food group Greencore fell after saying it was suspending its full-year guidance and scrapping its interim dividend amid a drop in demand for its food to go products due to the coronavirus outbreak.
Budget airline easyJet slid as it said it was grounding its entire fleet in response to "unprecedented" travel restrictions and lockdowns imposed by governments in response to the coronavirus pandemic. The company said it had reached agreement with the Unite union on furlough arrangements for its cabin crew. The deal would be effective from April 1 for two months and meant that crew will be paid 80% of their average pay through the government's job retention scheme.
Shopping centre owner Hammerson tumbled after it pulled its final dividend and guidance as government lockdowns forced many of its tenants to shutter their stores.
Dixons Carphone was knocked lower by a downgrade at RBC Capital Markets, while Cineworld slumped after a downgrade at JPMorgan.
On the upside, oil giants BP and Royal Dutch Shell were both on the front foot even as oil prices fell to 18-year lows.
Pennon gained ground as it said its performance for 2019/20 was in line with management expectations, with revenue down due to prolonged wet weather.
Johnson Matthey rose even as the specialty chemicals company warned annual results would miss expectations after the coronavirus crisis reduced demand and delayed shipments.
Market Movers
FTSE 100 (UKX) 5,451.40 -1.07%
FTSE 250 (MCX) 14,281.67 -3.30%
techMARK (TASX) 3,166.75 -2.45%
FTSE 100 - Risers
Polymetal International (POLY) 1,348.50p 3.77%
Royal Dutch Shell 'A' (RDSA) 1,313.80p 2.42%
Pearson (PSON) 530.80p 2.31%
Royal Dutch Shell 'B' (RDSB) 1,256.80p 2.13%
BP (BP.) 311.35p 1.91%
Johnson Matthey (JMAT) 1,791.50p 1.88%
BHP Group (BHP) 1,209.60p 1.85%
Pennon Group (PNN) 1,091.50p 1.77%
Smiths Group (SMIN) 1,117.50p 1.31%
Rentokil Initial (RTO) 366.60p 1.30%
FTSE 100 - Fallers
Meggitt (MGGT) 266.30p -14.10%
Rolls-Royce Holdings (RR.) 328.70p -9.87%
Melrose Industries (MRO) 96.08p -9.53%
Ashtead Group (AHT) 1,539.00p -8.56%
Coca-Cola HBC AG (CDI) (CCH) 1,491.50p -8.38%
Land Securities Group (LAND) 532.80p -7.34%
easyJet (EZJ) 552.60p -7.09%
Carnival (CCL) 912.20p -7.07%
Centrica (CNA) 37.20p -6.93%
British Land Company (BLND) 319.60p -6.55%
FTSE 250 - Risers
PureTech Health (PRTC) 241.00p 12.09%
BMO Commercial Property Trust Limited (BCPT) 63.20p 7.85%
Cranswick (CWK) 3,630.00p 4.37%
Avast (AVST) 379.80p 4.00%
Capita (CPI) 32.45p 3.34%
Cairn Energy (CNE) 83.35p 2.90%
Synthomer (SYNT) 234.20p 2.27%
Worldwide Healthcare Trust (WWH) 2,745.00p 2.23%
Elementis (ELM) 50.50p 2.10%
Centamin (DI) (CEY) 127.10p 1.84%
FTSE 250 - Fallers
Hammerson (HMSO) 69.98p -18.15%
Dixons Carphone (DC.) 66.24p -17.80%
Airtel Africa (AAF) 40.38p -17.59%
Cineworld Group (CINE) 44.92p -16.01%
Frasers Group (FRAS) 180.80p -13.99%
Aston Martin Lagonda Global Holdings (AML) 240.20p -13.63%
Provident Financial (PFG) 193.75p -12.05%
Just Group (JUST) 50.00p -11.97%
Marston's (MARS) 35.30p -11.71%
Hill & Smith Holdings (HILS) 859.00p -11.67%
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