Businessman on finance backgroundBusinessman on finance background
  • FTSE 100 index closes 26 points down
  • Wall Street shares strongly higher
  • FCA unveils new measures to help listed firms raise cash

5.20pm: FTSE 100 still in red

FTSE 100 recouped some earlier losses but still closed in the red, while FTSE 250 went higher on the day as markets appeared to swerve further “significant downside”.

Britain’s top share index finished the day down around 26 points at 5,677 not aided by a stronger pound. The midcap FTSE 250, however, added over 293 points at 15,862.

On Wall Street stocks were strongly higher, with the Dow Jones Industrial Average adding  over 495 at 23,149. The broader-based S&P 500 gained over 54 at 2,713.

“Despite further warnings about the impact of the virus on European economies, stock markets continue to avoid further significant downside,” noted Chris Beauchamp, chief market analyst at London-based IG.

“The watched-for selloff refuses to arrive, despite a dramatic and rapid bounce from the lows for stock indices. With little in the way of fresh news apart from infection reports, investors have been left twiddling their thumbs.”

The pound gained 0.43% against the US dollar at US$1.2391.

Top loser on Footsie was silver giant Fresnillo (LON:FRES), which lost 5.5% to 656.40p. The top gainer was Premier Inn owner Whitbread (LON:WTB), whose shares rose 9.08% to 2,895p.

3.25pm: FCA unveils measures to help listed companies raise funds

Heading into the final hour of trading on Wednesday, the FTSE 100 was still firmly in negative territory despite a positive start on Wall Street and was down 78 points at 5,626 at 3.25pm.

Meanwhile, the Financial Conduct Authority (FCA) has unveiled new measures that it says will help listed companies raise cash from the market as they try to stay afloat during the coronavirus pandemic.

Under the new measures, companies will be able to apply to the regulator to ensure shareholder approval can be sought for certain transactions without the need to hold a general meeting given government guidelines on social distancing, as well as encouraging companies to use new simplified prospectuses that do not require firms to include information such as organisational structure, capital resources, remuneration and benefits and board practices.

“The UK’s capital markets will play a vital role providing finance to businesses to help aid the recovery from this crisis”, said Christopher Woolard, the FCA’s interim chief executive.

“Our aim is to help companies to raise money quickly and effectively, while ensuring they respect the needs of investors, both current and future. We think this package strikes that balance”, he added.

2.40pm: Wall Street opens higher

As expected, Wall Street kicked off Wednesday’s session on the front foot as investors looked past pandemic-related volatility.

Shortly after the opening bell, the Dow Jones Industrial Average rose 0.8% to 22,836 while the S&P 500 climbed 0.95% to 2,684 and the Nasdaq moved up 1.24% to 7,985.

The Fed minutes data due later could provide more movement catalysts as traders get a clearer picture behind the Fed’s decision to cut rates to 0% in an emergency move last month.

In London, the FTSE 100 was down 59 points at 5,645 shortly before 2.40pm.

2.15pm: HSBC says Australian arm could have broken money laundering rules

Banking giant HSBC Holdings PLC (LON:HSBA) has said its Australian arm may have breached anti-money laundering and terrorist financing rules and has submitted its concerns to regulators in the country.

The lender said it had failed to report transactions it facilitated with foreign banks and other institutions, although it did not say how many transactions it was investigating as potential breaches.

HSBC Australia said in its annual report on 26 March that it had flagged its concerns to the Australian financial crime agency, Austrac, in December last year, and stressed that it was continuing to work with the regulator in an “open and transparent” manner.

Lenders that breach Australia’s rules on money laundering can face fines of up to A$21mln (£10.5mln) for each infraction.

However, it is not the first time HSBC has found itself facing a scandal such as this, having been fined US$1.9bn (£1.05bn) by US regulators in 2012 for a number of breaches including the provision of money laundering services for Mexican drug cartels as well as facilitating transactions in ‘rouge’ nations such as Iran and Libya in violation of sanctions.

Shares in the bank were down 0.2% at 419p in mid-afternoon trading, while the FTSE 100 was 45 points lower at 5,659 at around 2.15pm.

12.40pm: Wall Street points to higher open

The US markets are expected to edge higher on Wednesday, although investors are likely to remain subdued as they await the latest minutes from the Federal Reserve.

While Donald Trump is trying to reopen parts of the US economy soon to contain some of the economic damage from the pandemic and its resultant lockdown measures, traders are finding it difficult to assess just what the fallout from the crisis will be.

Markets are also keeping a close eye on infection rates and deaths from the virus around the world after fatalities in the US rose sharply to over 12,900 while confirmed cases increased to nearly 400,000.

Back in London, hopes of a better open on Wall Street did not seem to have provided much lift for the FTSE 100, which was down 71 points at 5,633 shortly before 12.40pm.

11.20am: FTSE 100 still in the red as morning ends

As the morning part of Wednesday’s session drew to a close, the FTSE 100 hadn’t made any headway to turn around its early slump and was down 87 points at 5,618 at around 11.20am.

Initial optimism over the pandemic turning a corner has been put under pressure by political dysfunction among leaders in Europe, with EU finance ministers overnight failing to agree on a financial aid package for the bloc to battle the economic effects of the virus.

“While claims that the EU is falling apart may be somewhat sensationalist, the squabbles seen last night were a clear reminder of just how difficult it can be to find agreement between 27 nations who have all seen vastly different experiences in recent weeks. Until a resolution on this package is found, we could see stock markets continue to struggle”, said IG’s Joshua Mahony.

Meanwhile, OANDA’s Craig Erlam said while falling numbers of new cases in New York and the worst hit areas of Europe was good news, he added that “the worst is not behind us”.

“New cases may (I stress, may) be flattening off in the UK but it’s early days. And even if this is the case, the next two weeks will be incredibly tough with the death toll likely to continue to accelerate. The US isn’t even at this stage yet. Economies are still locked down, doors are closed and people are stuck at home. And we don’t know how long that will last”, he added.

Among the blue-chips, insurer Aviva PLC (LON:AV.) was sitting at the bottom of the fallers list, down 7.8% at 245.9p after scrapping its dividend payout alongside other insurers such as RSA Insurance Group PLC (LON:RSA), Direct Line Insurance Group PLC (LON:DLG) and Hiscox Ltd (LON:HSX).

10.20am: Bitcoin gains 3% in year-to-date amid equities selloff

Heading into mid-morning, the FTSE 100 had failed to pull out of its opening slump, with its losses deepening after to 102 points at 5,602 shortly after 10.15am.

While the equity markets have suffered heavy falls amid investor panic over coronavirus, one beneficiary has been cryptocurrency Bitcoin, which in the year-to-date (YTD) notched up a gain of around 3%.

Marcus Swanepoel, co-founder and chief executive of cryptocurrency services firm Luno, said while Bitcoin’s price had fallen a few weeks ago due to “institutions and non-crypto professionals’ liquidating long positions to raise cash”, the remaining players were “crypto-native firms” and those holding long-term positions to reduce the correlation of their portfolio value with the declining main markets, which was “unsurprisingly having a positive impact on Bitcoin’s bullish performance”.

“It’s encouraging to see the crypto market outperforming traditional stocks with traders believing in the potential of cryptocurrencies as viable alternative investment”, he added.

Bitcoin was trading at around US$7,298 in mid-morning, down 0.9% but it is 48% higher than its 2020 YTD low of around US$4,944 reached in mid-March.

9.30am: TUI cancels all holidays up to 14 May

Travel giant TUI AG (LON:TUI) has cancelled all of its holidays up to and including 14 May as the coronavirus lockdown continues to wreak havoc on the travel industry.

The FTSE 250 firm, which has lost around 60% of its value since the start of the year, said customers will still be able to amend all holidays up to 30 June for free, even if they are due to travel between 17 April and 14 May.

Like most other travel firms and airlines, TUI has been forced to ground most of its aircraft and make severe cost cuts to preserve cash until the pandemic subsides and travellers begin to return.

Earlier today, the company also accepted a €1.8bn from Germany’s state bank to cushion its bottom line from the impact of the crisis on its finances.

Despite the cancellations, shares in TUI were up 6.8% at 392.7p shortly before 9.30am, while the FTSE 100 was little moved from its earlier fall and was down 76 points at 5,628.

8.45am: Back to worries

The FTSE 100 gave up some of Tuesday’s hard-won gains as a mild bout of the jitters returned to the markets.

The index of UK blue-chips fell 71 points to 5,633.37 early on. 

Traders appeared to be still mindful that the stress and mayhem from the coronavirus outbreak could get significantly worse, even if UK cases appear to be in plateau territory.

Scary was the increase seen in New York, which recorded more than 800 deaths in one day.

“Optimism is fizzling out as doubts grow about how and when exactly quarantine and lockdown restrictions will end,” said Jasper Lawler, analyst at CMC Markets.

“The failure of Eurozone finance ministers to agree joint action underscores the limited capacity of governments to cushion the coming economic fallout.”

With caution the watchword, traders also have half an eye on the minutes from the US Federal Reserve’s minutes due later, which should provide some guide to the thinking of rate-setters.

The fallers list was dominated by financial services companies, particularly those invested directly in the market.

Insurers Aviva (LON:AV.), Direct Line (LON:DLG) and RSA (LON:RSA) all pulled their dividend payments to conserve cash (read more on the story here). The shares fell, respectively, 9%, 8% and 4%. Legal & General (LON:LGEN), down 8%, was caught in the stampede.

Tesco (LON:TSCO) eased 3% after it said the coronavirus outbreak would lead to an increase in operating costs of as much as £925mln after rushing to beef up staffing levels to fulfil increased demand (read more on Tesco’s results here).

But shares in the online fashion chain ASOC (LON:ASC) soared 40% after it successfully concluded a £240mln City fundraiser that should see it through the lockdown (more on the story here).

Proactive news headlines:

Remote Monitored Systems PLC (LON:RMS) has said its Cloudveil subsidiary has received an “unprecedented level of enquiries” for its services over the last two months. The company said Cloudveil, which provides security, intelligence and risk management services, has recently won a contract to deliver a governance framework for the security programme of a prominent London based academic institution and is currently bidding to provide a security testing programme to one of the largest public sector institutions in the UK financial services sector. RMS also said its GyroMetric business, in which it owns a 58% stake, has secured an order for 10 units from a global leader in marine propulsion systems.

SDX Energy PLC (LON:SDX) has announced a new discovery at the South Disouq project in Egypt, with the SD-12X (Sobhi) well encountering 108 feet of net high-quality gas-bearing sands. “This is an excellent result for SDX and fully justifies our confidence to drill this well on a sole risk basis,” Mark Reid, SDX chief executive said in a statement.

S&U PLC (LON:SUS) has increased its profits for the twentieth year running and the car finance specialist’s chairman forecast that it would come out of the coronavirus crisis in better shape than ever. The group’s profits in the year to January rose by 2% to £35.1mln on revenues 8% higher at £89.9mln. S&U said sales fell in March, however, and its collections performance was just below normal, though cash generation remained strong.

Tekcapital PLC (LON:TEK) said its portfolio company Guident has made four significant new hires, including the appointment of Harald Braun as chairman and chief executive. He was previously CEO of both Siemens Networks USA and Aviat Networks as well as serving as a senior executive at Nokia Siemens Networks, North America. Guident, which develops technology for autonomous vehicles and drones, also announced the appointment of Daniel Grossman as chief revenue officer; Michael Trank as vice president of software development; and Dr Gabriel Castaneda as lead architect of artificial intelligence software.

Tavistock Investment PLC (LON:TAVI) has said its two protected unit trusts have proved themselves during the current market volatility caused by the coronavirus pandemic. Trading results for the year to March will be in line with market expectations, said the fund manager, with the highlight the performance of the two ACUMEN protected funds. These funds fell by less than 5% and 3%, respectively, between January and March, said Tavistock, a period when the FTSE 100 dropped 24%.

Diversified Gas & Oil PLC (LON:DGOC) has unveiled a new US$110mln acquisition of upstream and midstream assets in the Appalachia region of the United States. The deal, with Carbon Energy Corporation and its affiliates, sees DGOC pick up some 9,900 barrels oil equivalent production in 6,500 “mature, low decline conventional” wells. It noted that 97% of the production is gas. “This proposed complementary acquisition, if completed, remains consistent with our commitment to pursue prudent growth that enhances our dividend per share to shareholders,” Rusty Hutson, DGOC chief executive said in a statement.

Enteq Upstream PLC (LON:NTQ) has told investors that its financial results for the twelve months ended March 31, 2020, will be “broadly in-line” with expectations, though it cautioned over the impact of coronavirus (COVID-19) on its current and future trading environment. The oil services firm, in a statement, said revenue for the year would be in the region of US$11mln and underlying adjusted earnings (EBITDA) is expected at around US$3mln. It ended March with US$10.3mln of cash.

Greencoat UK Wind PLC (LON:UKW) has said its unaudited net asset value as of March 31, 2020, was £1,839.5mln, or 121.2p per share. The FTSE 250-listed company also announced a quarterly interim dividend of 1.775p per share with respect to the same quarter.

European Metals Holdings Limited (LON:EUZ) has sent out a notice ahead of its shareholder meeting to approve a £25.6mln investment in the company’s Cinovec battery-grade lithium project. The Czech state power utility CEZ has agreed to plough in the cash. The formal notice being circulated to investors outlines the full details of the funding obligations and right of CEZ to withdraw from the project on reaching one of two “specified milestones”.

Supermarket Income REIT PLC (LON:SUPR), the real estate investment trust providing secure, inflation-protected, long income from grocery property in the UK, has declared an interim dividend in respect of the period from January 1, 2020, to March 31, 2020, of 1.460p per ordinary share, payable on or around May 22. The group said the dividend will be paid as a Property Income Distribution (PID) in respect of the company’s tax-exempt property rental business to ordinary shareholders on the register on May 1 and the ex-dividend date will be April 30.

Verona Pharma PLC (LON:VRP) (NASDAQ:VRNA), a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for respiratory diseases, said its upcoming Annual General Meeting (AGM) to be held at the offices of Shakespeare Martineau at 60 Gracechurch Street, London at 10.30am on April 16, 2020, will be held as scheduled, however, given the UK government’s present restrictions on public gatherings of more than two people, the board requests shareholders to vote by proxy rather than attend in person. Any shareholders seeking to attend the AGM in person will be refused entry.

6.45 am: Down day predicted 

The FTSE 100 is expected to open lower on Wednesday after the previous session’s bounce as coronavirus jitters return and traders pause slightly ahead of the latest round of meeting minutes from the Federal Reserve.

Spread better IG is predicting the FTSE 100 will start Wednesday’s session down 24 points after closing 122 points higher at 5,704 on Tuesday.

Investors seem content to sit on their hands ahead of the release of the minutes from the Fed’s meeting in mid-March when it performed an emergency interest rate cut to around 0% in an attempt to shore up the economy amid the coronavirus pandemic.

“This week’s minutes to that emergency meeting on the 15th March are likely to make for interesting reading given there wasn’t complete unanimity in that decision, even though since then events have moved on quickly”, said Michael Hewson at CMC Markets.

“It is hard to imagine that all Fed board members aren’t now on the same page as the coronavirus death toll rises across the US and the economy shuts down. The most recent jobs number saw payrolls decline by a record 701k, and that’s even before two weeks of jobless claims that are likely to see an April jobs report look like a scene out of the Texas Chainsaw Massacre”, he added.

Despite a positive start, Wall Street ended Tuesday’s session lower overnight with the Dow Industrials Average closing down 0.12% at 22,653, while the S&P 500 dropped 0.16% to 2,659, and the Nasdaq Composite fell 0.33% to 7,887.

Investors are becoming anxious about the effect of the pandemic on the economy as New York reported its highest level of daily fatalities so far.

These jitters made for a mixed performance in Asia earlier today, with Japan’s Nikkei 225 rising 2.2% while Hong Kong’s Hang Seng fell 0.53%.

On the currency markets, the pound was down 0.07% against the dollar at US$1.2328, although sterling could see some catalysts for movement is any updates emerge regarding the condition of Prime Minister Boris Johnson as he battles coronavirus in intensive care.

Significant announcements expected for Wednesday:

Interims: ASOS PLC (LON:ASC)

Finals: Tesco PLC (LON:TSCO), Camellia PLC (LON:CAM), S&U PLC (LON:SUS), Impact Healthcare REIT plc (LON:IHR), The Pebble Group PLC (LON:PEBB)

Trading announcements: Hyve Group PLC (LON:HYVE)

Economic data: US Fed minutes

Around the markets:

  • Sterling: US$1.2328, down 0.07%
  • Brent crude: US$32.84 a barrel, up 3%
  • Gold: US$1,650.71 an ounce, down 0.85%
  • Bitcoin: US$7,375, up 1.19%

City headlines:

  • The UK government is urging companies to curtail executive pay packages as a wave of businesses furlough staff and access taxpayer aid during the pandemic – Times
  • Investor appetite for UK government bonds has hit a three-year high as Britain sought much-needed funds to fight the coronavirus outbreak – Guardian
  • One-third of the global workforce could suffer financial hardship as the coronavirus destroys jobs, cuts working hours and slashes pay – Telegraph
  • UK’s six largest accounting firms have staged a virtual meeting to discuss the reputational risk of accepting government funds for furloughing potentially thousands of employees – Financial Times
  • Embattled airlines have been allowed to delay paying £1 billion of air traffic control fees, in a crucial cash lifeline; the Government could take stakes in troubled airlines including Virgin Atlantic – Telegraph