• FTSE 100 index closes up 111 points
  • Carnival among top risers on hopes of a relaxation to physical distancing guidelines
  • Burford Capital emerges from the doghouse after portfolio successes

5.15pm: FTSE 100 closes up

FTSE 100 index closed on the front foot but Wall Street was downbeat as tech stocks weighed.

Britain’s top share benchmark finished the day up over 111 points at 5,958, while FTSE 250 added over 338 at 16,291.

“There is growing sense of optimism the lockdowns have helped contain Covid-19, and a loosening of restrictions seems to be on the horizon,” noted David Madden, market analyst at CMC Markets.

“A number of countries have already reopened some small aspects of their economies, and there is hope the trends will continue. Sadly, the pandemic is still spreading, but it would appear the growth rate has cooled, so dealers have another reason to be bullish.”

On Wall Street, the Dow Jones shed around six points, while the tech heavy Nasdaq was off around 81 points.

Oil was mixed with the US benchmark down around 5% to US$12.14 a barrel, while Brent crude was up a shade at US$20.25, up 1.3%.

3.50pm: Happy days are here again for the Footsie

The FTSE 100 was clinging on to its triple-digit gain entering the last hour of trading.

In a sure sign that traders are punting on lockdown restrictions being relaxed in the near future, cruises operator Carnival PLC (LON:CCL), up 10% at 1,015p, is the second-best performer on the Footsie, which is up 106 points (1.8%) at 5,953.

“Naturally the mood is helped by reports of cities and states around the world either starting to reopen or at least planning for it,” said Craig Erlam at OANDA.

“We appear to have moved beyond peak virus, for now, in the worst affected parts of Europe and North America, which is a relief, but any reopening is going to be extremely gradual so a return to normal is not going to happen any time soon. The ‘new normal’, that is,” he added.

Burford Capital Limited (LON:BUR), the litigation backer that came under fire from hedge fund Muddy Waters back in what now seems a different era, shot up 21% to 491.5p after updating on its portfolio.

In the first four months of 2020 Burford has obtained court results or arbitral awards that, if paid in full, would generate substantial income and cash receipts, the company claimed.

Another company that has been under fire in the past, outsourcing firm Mitie Group PLC (LON:MTO), hardened 4.0% to 67.3p after it reassured the market that results for the year to the end of March would be in line with the guidance given on 30 January – if you strip out the effects of the coronavirus situation on its business.

3.20pm: US consumer confidence slumps

Some more US economic data for investors to ignore … US consumer confidence plummeted in April.

The Conference Board’s Consumer Confidence Index slumped to 86.9 in April from 118.8 in March.

The Present Situation Index, which is based on consumers’ assessment of the current business and labour market conditions, plunged to 76.4 in April from 166.7 in March, although on the plus side, the Expectations Index, which is based on consumers’ short-term outlook for income, business and labour market conditions, rose to 93.8 from 86.8 in March.

“Consumer confidence weakened significantly in April, driven by a severe deterioration in current conditions,” said Lynn Franco, the senior director of Economic Indicators at The Conference Board.

“The 90-point drop in the Present Situation Index, the largest on record, reflects the sharp contraction in economic activity and surge in unemployment claims brought about by the COVID-19 crisis,” Franco added.

“Consumers’ short-term expectations for the economy and labour market improved, likely prompted by the possibility that stay-at-home restrictions will loosen soon, along with a re-opening of the economy; however, consumers were less optimistic about their financial prospects and this could have repercussions for spending as the recovery takes hold. The uncertainty of the economic effects of COVID-19 will likely cause expectations to fluctuate in the months ahead,” Franco predicted.

Ignoring the above, the Dow Jones extended its gains, rising to 24,393, up 265 points.

In London, the FTSE 100 was up 117 points (2.1%) at 5,969.

2.50pm: US stocks off to a flyer

US stocks got off to a flying start as traders take heart from positive noises about lockdown restrictions around the world being eased.

The Dow Jones index was up 230 points (1.0%) at 24,363 while the S&P 500 was up 26 points (0.9%) at 2,904.

The strong start was despite some dismal US advance goods trade data.

The advance goods deficit rose to US$64.2bn from US$59.9bn, which was more severe than the US$55.0bn economists had been expecting.

“The consensus forecast failed to account for the sharp fall in exports signalled by the drop in outward container movements from major ports,” said Ian Shpeherdson, the chief economist at Pantheon Macroeconomics.

“Total goods exports plunged by 6.7%, easily offsetting the 2.4% fall in imports. The drop in exports was led by autos, down 17.8%, but imports of consumer and capital goods also fell sharply. We expect a further steep decline in all these components in April, but May should be a bit better,” Shepherdson predicted.

In London, the FTSE 100 was up 115 points (2.0%) higher at 5,962, despite sterling rising by three-tenths of a cent against the US dollar to US$1.2459.

1.05pm: Wall Street expected to start higher

US markets are expected to head higher on Wednesday as the easing of coronavirus lockdown measures across several countries boosted market sentiment on Wall Street.

Investors may also be willing to look past the gloomy picture in the oil markets and more towards equities as US earnings season begins to hit its stride and the prospect of more central bank stimulus increases risk appetite for equities.

Some are expecting the Dow Jones Industrial Average to climb around 330 points, which would take it to a seven-week high.

Meanwhile, in London, the FTSE 100 was up 102 points at 5,948 just after 1pm.

12.25pm: Hopes of a relaxation of lockdown restrictions boosts sentiment

More news from the retail sector that appears to contradict some of the data published by market research group Kantar this morning.

The CBI’s monthly Distributive Trades Survey (DTS), which was conducted between 27 March and 15 April, reported the sharpest fall in sales in the year to April since December 2008 – a balance of -55% in April, from -3% in March. This represented the joint lowest balance in the history of the survey.

The CBI reported that two-thirds of retailers surveyed declared that the coronavirus (COVID-19) is having a significantly negative impact on their domestic sales.

39% of retailers reported the total shutdown of UK activity because of COVID-19 while 44% of retailers reported temporarily laying off staff and 8% reported permanent staff lay-offs.

Nearly all retailers (96%) reported cash flow difficulties, with just under half facing difficulties meeting tax liabilities (40%). 31% of retailers also faced constraints on the availability of external finance, the CBI said.

“It’s no surprise that the lockdown is hitting retailers hard. Two-fifths have shut up shop completely for now and sales of groceries and other essentials also fell, suggesting households may have been dipping into stockpiles built up prior to the lockdown or tightening their belts more generally as incomes take a hit,” said Rain Newton-Smith, the CBI’s chief economist.

“Although the livelihoods of hundreds of thousands of employees in retail remain at risk, there are encouraging signs that the Government’s Job Retention Scheme is providing genuine relief, with many opting for temporary rather than permanent lay-offs.

“Continued support for retailers to cover their fixed costs will be vital for ensuring that businesses are able to re-open when it’s safe and appropriate to do so,” he added.

Howard Archer, the chief economic advisor to the EY ITEM Club, noted that the British Retail Consortium has also reported that shopper footfall has fallen by 83% since the government closed non-essential retail outlets in March.

“Grocers and specialist food and drink shops bucked the weaker trend in April with very strong growth reflecting the stockpiling by some households that has been occurring,” Archer reported.

“Meanwhile, the near-term fundamentals for consumer spending have clearly taken a substantial downturn as a result of coronavirus. Some people have already lost their jobs, despite the supportive Government measures, while others may be worried that they may still end up losing their job once the furlough scheme ends. Additionally, many incomes have been impacted.

“Furthermore, consumers are likely to adopt a much more cautious approach to discretionary purchases given the current economic environment,” Archer said.

Online sales are coming increasingly to the fore, Archer noted but he added that they can only make up a limited amount of the lost business.

“Significantly, online sales as a share of total retail sales reached a record 22.3% in March,” Archer observed.

The FTSE 100 was up 86 points (1.5%) at 5,932.
 

11.30am: Advance picks up pace

After a hesitant start, the Footsie has found its mojo and cruised past the 5,900 mark and is now eyeing a return to 6,000.

To put that into context, the last time the index was above 6,000 was on 6 March.

The index is currently up 91 points (1.6%) at 5,938.

“Further gains for the FTSE 100 look odd on a morning when major components like BP and HSBC report poor earnings, but for the most part the gainers in the index are those that will see an upturn in activity as lockdowns ease across most of the globe, if perhaps not yet in the UK,” said IG’s Chris Beauchamp.

Financials are very much to the fore this morning, with life assurance pensions consolidator Phoenix Group Holdings PLC (LON:PHNX), up 6.8% at 608p, banking giant Barclays PLC (LON:BARC) and Royal Bank of Scotland Group PLC (LON:RBS) – up 6.3% at 96.82p and 5.5% at 113.45p – plus wealth management firm St James’s Place PLC (LON:STJ), up 5.8% at 840.6p, the picks of the bunch.

Among the mid-caps, building materials supplier Travis Perkins PLC (LON:TPK) and fantasy wargames company Games Workshop PLC (LON:GAW) are both faring well.

Travis Perkins was up 4.0% at 1,060.5p after it highlighted that branches across all of its businesses remain open.

Irish investment bank Goodbody reckons the first-quarter trading update shows that the builders merchant “is one of the winners in spite of Covid-19”.

“Given a greater amount of time spent indoors and the boom in DIY prompted by the UK lockdown, the group has been working to increase activity and since April 20th and has been opening more merchanting branches with a third of the network open through the lockdown,” said Robert Eason, the co-head of Equities – Capital Markets at Goodbody.

Games Workshop battled its way 9.2% higher to 5,810p after it said it will begin taking online orders again from Friday.

9.45am: Hesitant progress

The FTSE 100 has made hesitant progress this morning with risers among its constituents outnumbering fallers by slightly more than two to one.

London’s index of leading shares was up 22 points at 5,868, with insurance companies – likely to be beneficiaries of a recovery in global stock markets – prominent among the risers.

“Stock markets in Europe are showing small gains as traders are still hopeful that lockdowns will be relaxed. There is a sense that social distancing policies have helped governments get a handle on the Covid-19 crisis as the infection and death rates are tapering off. Dealers are taking the view that looser restrictions are in the pipeline,” said CMC’s David Madden.

The quoted supermarkets are not having such a jolly time of it following the release of the grocery market share data released this morning by market research group Kantar.

Take home grocery sales in Britain increased by 9.1% in the 12 weeks to 19 April, according to the latest figures from Kantar.

Spending at Sainsbury’s was 8.4% higher than this time last year and 7.2% higher at Tesco. Morrisons and Asda saw increases of 4.3% and 3.5% respectively.

Despite this, Wm Morrison Supermarkets PLC (LON:MRW) was down 1.6% at 183.2p, J Sainsbury PLC (LON:SBRY) was 1.6% weaker at 197.95p and Tesco PLC (LON:TSCO) was down 0.6% at 233.8p.

8.30am: Results weigh

The FTSE 100 got off to an insipid start with the benchmark held back by weak numbers from HSBC (LON:HSBA) and BP PLC (LON:BP), two of its biggest constituents.

The UK blue-chip benchmark subsided 9.5 points early on to 5,837.31. Overnight Wall Street closed in positive territory, but it was a different picture in Asia on Tuesday, where the markets registered a mixed performance as reality set in.

In London, HSBC shares lost 1.7% of their value in early trade after the Asia-focused banking giant announced its first-quarter profits had halved and told investors it was making financial preparations for the impact of the coronavirus lockdown.

“The fact HSBC has put aside a sizeable lump for coronavirus related loan defaults isn’t exactly a surprise and we’re actually reasonably impressed at how performance has held up so far,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.

“Loan growth has offset pressure from lower interest rates, while increased volatility in financial markets can actually be good news for the investment bank. Meanwhile, the bank’s capital base has been able to absorb the impairment and an increase in the risk profile of the bank’s loans without deteriorating significantly – albeit with the help of the suspension of 2019’s final dividend.”

Meanwhile, BP shares shed 2% as the oil major reported a ‘historic’ US$4.36bn loss for its first quarter as the coronavirus (COVID-19) pandemic and a big drop in oil demand took its toll, although the firm maintained its dividend.

Away from the numbers, easyJet (LON:EZJ) landed with a bump, down 1.7% after a bout of profit-taking following Monday’s positive performance.

Not only is the budget airline one of the major casualties of the coronavirus outbreak, but it is also embroiled in a resolve-sapping spat with its founder, Sir Stelios Haji-Ioannou, over new aircraft deliveries.

But on the upside, Games Workshop (LON:GAW) registered a 9% rise after saying it is on track to make profits of £70mln for the year ending next month. It has also secured a £25mln overdraft.

Proactive news headlines:

Gaming Realms PLC (LON:GMR) has reported reduced full-year losses and higher revenues for 2019 and said that trading for the first quarter of 2020 came in “ahead of expectations”. Posting results for the year ended December 31, 2019, the mobile gambling games firm reported a loss from continuing activities of £4.6mln, down from £5.6mln in 2018, while revenues jumped by 11.5% to £6.9mln.

Rockfire Resources PLC (LON: ROCK) has revealed that results from its January 2020 rock sampling programme have identified a gold-copper-nickel-cobalt-Platinum-palladium anomaly located only two kilometres north of the company’s Plateau gold deposit on the Lighthouse tenement in North Queensland, Australia. In a statement, the new anomaly, named Split Rock, is likely to enhance the prospectivity of the immediate vicinity of Plateau. Split Rock shares access tracks with Plateau, enabling minimal mobilisation of rigs between the two prospects.

Sareum Holdings PLC (LON:SAR), the specialist small molecule drug development business, announced that its CEO, Dr Tim Mitchell, will give a presentation at BioTrinity 2020, which will be delivered digitally from April 28 to May 1, 2020. The group said the presentation will provide an update of Sareum’s two proprietary TYK2/JAK1 kinase inhibitor programmes, SDC-1801 and SDC-1802, targeting autoimmune diseases and cancers, respectively. Dr Mitchell will also highlight the emerging potential of this mechanism to modulate the severe inflammatory responses and respiratory symptoms arising from coronavirus and other viral infections, it added. The presentation will be made through the BioTrinity virtual portal and will be available to registered participants during the conference and until at least May 9 at https://biotrinity.com/showcase. And a copy of the presentation will also be made available on the company’s website.

ANGLE PLC (LON:AGL) (OTCQX:ANPCY) believes its ground-breaking liquid biopsy system could have a role to play helping guide trials of the next wave of cancer immunotherapies. Its Parsortix system is used to harvest circulating tumour cells. Now ANGLE’s scientists are using what’s called an immunofluorescence imaging assay to check for programmed death-ligand 1 expression. Known as PDL1, this particular protein helps keep immune cells from attacking non-harmful cells in the body. However, it also allows the cancer cells to trick the immune system and avoid being attacked as foreign. If a PDL1 expression from a patient’s cancer cells is high, she or he will likely benefit from immunotherapy.

Sure Ventures PLC (LON:SURE) has said that Sure Valley Ventures, in which it holds a 25.9% stake, participated in a €2.2mln (£1.9mln) funding round for a business named Buymie. Buymie has developed a platform which uses artificial intelligence (AI) to allow customers to access large grocery retailers and receive short notice delivery to a chosen destination in less than an hour. The company has signed a multi-year partnership with Lidl Ireland to provide a personalised online grocery service, while consumers are also able to use Buymie to shop from Tesco in the country.

IronRidge Resources Ltd (LON:IRR) said it has begun a second phase drill programme at the Zaranou gold project in Côte d’Ivoire. The license borders with Ghana and is along strike from significant operating gold mines including the five million ounce Chirano mine and the 5.5mln ounce Bibiani mine. In an update, the company said it will undertake approximately 8,000 metres of air core drilling and 1,000 metres of reverse circulation drilling.

Supermarket Income REIT PLC (LON:SUPR) announced that it has successfully raised £139.8mln from a substantially oversubscribed placing of 135,748,028 new ordinary shares at 103p each. The group said that, after careful consideration of the level and quality of demand in the Issue alongside the possibility of acquiring additional assets, its board had determined to increase the size of the Issue to £139.8mln from the original level of £100mln, and added that notwithstanding the increased size of the Issue, investor demand substantially exceeded the gross proceeds raised and as such a scaling back exercise was undertaken.

Metal Tiger PLC (LON:MTR) has welcomed the decision of its associate Cobre to take full control of its Toucan Gold subsidiary, the vehicle that owns the Perrinnvale project in Western Australia. The resources investor has agreed to invest a further A$310,000 (£161,000) into Cobre to help it fund the transaction, which will see the Aussie-listed company pay cash of A$527,000 and issue 6.16mln shares to buy out the 20% minority owners. Metal Tiger’s investment will maintain its stake in Cobre at 19.9%.

European Metals Holdings Ltd (LON:EMH) (ASX:EMH) said its Czech subsidiary Geomet has now received €29.1mln following completion of its deal with power company, CEZ The €29.1mln investment deal between European Metals and CEZ has now completed. Accordingly, CEZ now has a 51% equity interest in Geomet, which is the holder of the licences to the Cinovec project, Europe’s largest hard rock lithium project.

ECR Minerals PLC (LON:ECR), the gold exploration and development company focused on Australia, announced that at its annual general meeting (AGM) held at on Monday all resolutions proposed were passed.

Keywords Studios PLC (LON:KWS), the international technical and creative services provider to the global video games industry, has confirmed that, given the coronavirus (COVID-19) restrictions, it is no longer possible to hold its Annual General Meeting (AGM) in the way that the board had planned and therefore regrettably it cannot allow shareholders to attend in person. The AGM will instead be convened on May 27 at the company’s offices, 39 Earlham Street, London, WC2H 9LT, United Kingdom, with the minimum necessary quorum of two shareholders (chairman and CEO) present in order to conduct the business of the meeting. The group’s board said it strongly encourages shareholders to vote by proxy in lieu of attending in person and shareholders are also encouraged to submit any questions they would like to have answered at the AGM by e-mailing it to agm@keywordsstudios.com to be received no later than 22 May 2020.  A video link of a presentation by the CEO’s presentation will be made available for shareholders to view from 11.00am. on the day of the AGM on the company’s website.

6.30am: Footsie set to start on the front foot

The FTSE 100 is tipped to start on the front foot on Tuesday as markets continue to take confidence from the gradual lifting of coronavirus lockdown measures around the world. 

London’s blue-chip benchmark was being called almost 20 points higher ahead of the open by spread betters, extending the positive start to the week after finishing up 94 points at 5,846 on Monday.

Wall Street’s major indices closed higher on Monday, with the Dow Jones Industrial Average rising more than 358 points, or 1.5%, to 24,133.78, with the broader S&P 500 up 1.5% and the tech-laden Nasdaq Composite rising 1.1%.

Asian stocks were more mixed on Tuesday, with Japan’s Nikkei 225 down 0.2%, the Hang Seng in Hong Kong up 0.5% and China’s Shanghai Composite flat. 

“While stocks have continued to take comfort from the largesse of central banks the economic data has gone from bad to worse and unlikely to get better in the short term, which means that investors appear to be banking on a quick return to normal as governments slowly relax restrictions,” said market analyst Michael Hewson at CMC Markets.

He said Tuesday’s economic data is expected to reinforce the hit to the UK consumer, with the latest CBI retail sales numbers for April expected to show a sharp drop to -40, from -3 in March.

In UK company news, HSBC PLC (LON:HSBA) kicked off the week’s bank earnings updates when it published its numbers in Hong Kong earlier, showing a big drop in profits as it made provisions for bad loans from the impact of the coronavirus pandemic around the world.

Pre-tax profit for the first quarter of US$3.2bn (£2.6bn) was down 48% from the same period last year, worse than the consensus analyst forecast of US$3.67bn.

The bank, which has substantial businesses in many corners of the globe, hiked its expected credit losses by a massive US$2.4bn to US$3bn due to the impact of the pandemic and the collapse in oil prices, while also taking “a significant charge related to a corporate exposure in Singapore”.

Later, BP PLC (LON:BP.) will give a much-awaited update, with investors concerned about whether the ‘supermajors’ will retain their dividends.

For new BP boss Bernard Looney it is a tough time to be getting his feet under the desk.

Trading updates about a month ago suggested that both BP and Shell could afford to keep up their dividend payments in the short term, but, that was before crude prices nosedived further.

Analysts at UBS reckon investors will be interested visibility in Looney’s divestment plans which is targeted to raise US$10-15bn by mid-2021 and is key in bringing down the sector-leading gearing, with the company announcing on Monday that it has agreed to revisions to the terms of its US$5.6bn Alaskan asset sale, with smaller payments now due from Hilcorp in 2020.

Around the markets:

  • Pound down 0.1% to US$1.2416
  • Oil – Brent crude down 3.2% to US$19.35 per barrel, WTI crude down 11.5% to US$11.31
  • Gold down 0.6% to US$1717.25

Significant announcements expected on Tuesday:

Trading announcementsBP PLC (LON:BP.), HSBC Holdings PLC (LON:HSBA), Travis Perkins PLC (LON:TPK), Weir Group PLC (LON:WEIR), Shoe Zone PLC (LON:SHOE), Bank Pekao SA (LON:BPKD)

FinalsNon-Standard Finance PLC (LON:NSF), Keystone Law Group PLC (LON:KEYS), STM Group Plc (LON:STM)

City headlines:

FT

  • Sunak plans ‘gradual’ wind-down of job support scheme – Chancellor looks to wean economy off programme aiding 4m workers under coronavirus while avoiding jobless surge
  • US oil prices sink as coronavirus fuels storage fears – traders fear WTI crude could again turn negative as pandemic pummels global economy
  • UK’s National Health Service survives the first coronavirus wave – health leaders confident the service has passed biggest test since its inception
  • EU restarts work on regulating Big Tech – after coronavirus pause, Brussels looks at asking companies for data audits

Times

  • Imposition of social distancing and other safety measures after lifting of lockdown could threaten survival of thousands of businesses
  • Oil collapse puts 30,000 jobs at risk – grim outlook for UK offshore industry as prices fall again
  • Jets from bust airlines set to flood the aviation market – a thousand repossessed aircraft going cheap are adding to the coronavirus woes of Airbus and Boeing
  • Home sales worth £82 billion have stalled in Britain, according to an online property portal

Telegraph

  • Boris Johnson has promised to “fire up the engines” of the economy with a plan for “refining” the coronavirus lockdown, which he will reveal by the end of the week.
  • Tesco starts laying off army of temporary workers – having hired 45,000 extra workers at the height of the crisis the supermarket is letting some go earlier than planned
  •  
  • Middle Eastern funds cut back on trophy hunting in the West – executives of the region’s sovereign wealth funds are now searching for distressed debt opportunities

Guardian

  • Ministers meet unions and business to plan getting UK back to work – talks aimed at bringing in practices that reassure employees it is safe to leave lockdown
  • Britain breaks record for coal-free power generation – coal-fired plants have not contributed to electricity grid for 18 consecutive days
  • UK to halt several ventilator projects after fall in demand – many available devices remain unused owing to lockdown and less invasive treatment