London midday: FTSE pares gains ahead of jobless claims
By Michele Maatouk
Date: Thursday 09 Apr 2020
(Sharecast News) - London stocks were up but off earlier highs by midday on Thursday as investors eyed the release of the latest US jobless claims data.
The FTSE 100 was up 0.6% at 5,710.00, even as it emerged that the UK lockdown is set to be extended by three weeks.
London Capital Group analyst Jasper Lawler said: "The mood in markets continues to improve but it's patchy. Virus cases continue to rise at a rapid clip but markets are extrapolating the data forward and hoping we're close to a peak.
"The lockdown extension is a downside risk. The FTSE 100 is pushing higher even as it becomes clear that the UK lockdown will need to be extended. The incapacity of the Prime Minister only heightens the concern that there is just no exit strategy."
Lawler questioned the efficacy of lockdowns. "Are lockdowns only full eased when virus cases drop to zero? How long will that take? Will testing capabilities and hospital resources be good enough to mean lockdowns can be avoided if there is a second wave?"
Meanwhile, Spreadex analyst Connor Campbell pointed to "a couple of things that could derail Thursday's lovefest".
"OPEC and its fellow oil producing countries are set to meet, in a get-together that could produce a price war-ending agreement between Russia and Saudi Arabia. A lack of deal could really harm the market's, and especially FTSE's, hopes of ending this abbreviated week on the front foot.
"Of course Thursday also means its jobless claims time - another peak into America's brewing unemployment crisis. So far the country has seen 2 record-breaking readings in a row, followed up by an alarming nonfarm number last Friday."
Another 5 million unemployment claims are forecast for Thursday.
On home shores, investors were mulling news that the Bank of England has agreed to directly finance extra spending imposed on the government by the Covid-19 crisis, allowing the Treasury to raise funds outside the bond market.
On the macro front, figures from the Office for National Statistics showed the UK economy shrank in February even before the full effects of the pandemic began to hit businesses and consumers.
In equity markets, Just Eat Takeaway was the standout gainer as it said orders jumped 50% in the first quarter as food deliveries boomed during the virus outbreak crisis after an initial drop.
FTSE 250 housebuilder Redrow racked up solid gains after saying it is eligible for access to ?300m funding from the government's Covid Corporate Financing Facility and that it has furloughed 80% of its staff due to the outbreak. FTSE 100 peers Barratt, Taylor Wimpey and Persimmon followed suit.
Diageo rose after saying it would pay its interim dividend as planned but the drinks company put on hold the next phase of its three-year share buyback as Covid-19 restrictions took a significant toll on its business.
In broker note action, William Hill was boosted by an upgrade to 'outperform' at RBC Capital Markets, while Hammerson was knocked lower by a downgrade to 'hold' at HSBC.
Market Movers
FTSE 100 (UKX) 5,710.00 0.57%
FTSE 250 (MCX) 16,045.35 1.15%
techMARK (TASX) 3,384.06 0.56%
FTSE 100 - Risers
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,214.00p 8.78%
Centrica (CNA) 35.87p 6.50%
Next (NXT) 4,486.00p 6.38%
Land Securities Group (LAND) 666.00p 5.88%
British Land Company (BLND) 407.50p 5.46%
Taylor Wimpey (TW.) 139.30p 5.45%
JD Sports Fashion (JD.) 552.60p 5.30%
Compass Group (CPG) 1,341.00p 4.97%
Melrose Industries (MRO) 99.02p 4.94%
Meggitt (MGGT) 281.60p 4.92%
FTSE 100 - Fallers
Admiral Group (ADM) 2,143.00p -2.77%
Bunzl (BNZL) 1,655.00p -1.93%
Mondi (MNDI) 1,323.50p -1.85%
M&G (MNG) 131.70p -1.72%
Prudential (PRU) 1,028.00p -1.49%
Sage Group (SGE) 598.60p -1.35%
London Stock Exchange Group (LSE) 7,038.00p -1.23%
HSBC Holdings (HSBA) 416.55p -0.93%
British American Tobacco (BATS) 2,903.50p -0.92%
Flutter Entertainment (FLTR) 7,530.00p -0.89%
FTSE 250 - Risers
Cineworld Group (CINE) 74.60p 23.06%
Premier Oil (PMO) 32.75p 13.20%
Capita (CPI) 37.06p 12.20%
William Hill (WMH) 104.40p 10.52%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,214.00p 8.78%
Mitchells & Butlers (MAB) 223.00p 8.52%
Marston's (MARS) 45.94p 8.45%
Hyve Group (HYVE) 23.40p 8.08%
Redrow (RDW) 437.00p 7.95%
Future (FUTR) 1,076.00p 7.82%
FTSE 250 - Fallers
ICG Enterprise Trust (ICGT) 642.00p -6.96%
Aston Martin Lagonda Global Holdings (AML) 69.30p -5.46%
BMO Commercial Property Trust Limited (BCPT) 79.70p -5.46%
Vivo Energy (VVO) 73.70p -5.03%
HGCapital Trust (HGT) 215.50p -4.65%
Senior (SNR) 66.30p -3.91%
PZ Cussons (PZC) 177.20p -3.80%
Spirent Communications (SPT) 226.00p -3.42%
3i Infrastructure (3IN) 251.50p -3.27%
NextEnergy Solar Fund Limited Red (NESF) 119.60p -3.24%
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