• FTSE 100 index closes ahead- just
  • Wall Street stocks mixed
  • UK death toll from coronavirus hits 30,076, the worst in Europe
  • US payrolls plunge by 20.2mln in April

5pm: FTSE barely changed

FTSE 100 index closed Wednesday barely in positive territory as traders shunned risk and were fearful at the prospect of Friday’s key US jobs report.

The ADP report today showed private-sector companies lost an eye-watering 20.2 million jobs last month (April) amid a nationwide shutdown of businesses to slow the spread of the coronavirus and Friday’s US government report is expected to show a similar slump.

Britain’s blue chip benchmark finished the day just over four points higher at 5,853. Its midcap cousin however, FTSE 250, slumped over 110 points at 15,982..

The standout riser on Footsie was online grocer Ocado (LON:OCDO), which jumped 4.57% to 1,772.5p after the company confirmed that its second quarter retail revenue growth was 40.4% compared to 10.3% posted in the first quarter as demand for food amid the coronavirus lockdown increased.

“Nothing, it seems, can stop Ocado’s rise, the company having finally found real success with its online supermarket offering but still managing to bring home the bacon in the shape of global partnerships with other supermarkets,” said Chris Beauchamp, market analyst at online trader IG.

“Having rallied 70% since late March the price looks overextended, but with supermarkets back on top thanks to changed shopping habits Ocado looks set to reap the rewards.”

3.40pm: US to see largest unemployment rate plunge in history

The Footsie pared its gains ahead of close although sterling plunged further.

The big caps bagged 21 points to 5,870 while the pound dropped 0.6% to US$1.2354.

Following the ADP reading of US payrolls, analysts at Berenberg forecast unemployment rate to jump to 16.2% from 4.4% on Friday, though consensus sits at 16%, in the biggest plunge in history.

“The 23mln jobs created between February 2010 and February 2020 were essentially lost in a single month,” the German investment bank pointed out.

“The previous largest monthly decline in US nonfarm payrolls (monthly data started in 1939) was 2mln, which occurred in September 1945 at the end of World War II. During the Great Recession of 2008-2009, nonfarm payrolls fell by a total of 8.7mln.”

2.45pm: Wall Street opens higher

The Footsie was on the rise just as Wall Street opened higher.

London’s leading index bagged 37 points to 5,880, while the Dow Jones added 79 points to 23,962 and the S&P500 gained 15 points to 2,884.

Staying on the other side of the pond, ADP reported that private payrolls plunged 20.2mln in April, very close to the consensus drop of 20mln.

Job losses were mostly in the services sector, with leisure and hospitality losing 8.6mln jobs, while the health care sector was down by 1mln.

Analysts pointed out that ADP counts anyone on the active payroll rather than just people who were paid during the month, so there may have been a discrepancy considering all the workers temporarily laid off.

“The upshot is that the collapse in employment could look even worse in the official Employment Report, due this Friday,” said Paul Ashworth, chief US economist at Capital Economics.

“We still estimate that non-farm payrolls fell by 22,500,000, with the unemployment rate rising to somewhere between 15% and 20%.”

1.40pm: Heathrow to trial passenger temperature screening

FTSE 100 added 28 points to 5,879 after lunch, with the pound firmly in the red, 0.4% lower at US$1.2379.

Heathrow Airport’s boss announced trials to check passengers’ body temperature.

John Holland-Kaye told the Transport Select Committee that the industry could not afford to wait 12-18 months for a vaccine for coronavirus and that thousands of jobs might be lost if the only advice to passengers and airlines remains to socially distance.

Earlier this week, Holland-Kaye said airports simply do not have enough space to allow it, as just one jumbo jet would require a queue a kilometre long.

Trade body International Air Transport Association (IATA) said passengers and crew should wear face masks, but does not support social distancing measures that would leave middle seats empty.

“Evidence suggests that the risk of transmission on board aircraft is low,” IATA said on Tuesday.

“Mask-wearing by passengers and crew will reduce the already low risk, while avoiding the dramatic cost increases to air travel that onboard social distancing measures would bring.”

Temperature screening and deeper cabin cleaning were some of the advised solutions.

British Airways, Virgin Atlantic and Ryanair on their own have announced 18,000 job cuts in the past week, with fears growing for the health of Gatwick Airport after BA and Virgin also said they would stop using it for flights.

Qatar Airways warned its workforce of “substantial” job losses, the BBC reported today.

The state-controlled airline holds a 25% stake in British Airways owner International Consolidated Airlines Group (LON:IAG).

12.15pm: Wall Street to open higher but analysts say optimism may be premature

The Footsie inched up at noon, bagging 31 points to 5,880, while sterling pared its losses but was still down 0.4% to US$1.2386.

Analysts expect Wall Street to open higher, lifted by countries in Europe and US states easing restrictions, markets turning a blind eye to earnings results as well as the exceptional financial stimulus injected by the governments.

According to Craig Erlam, analyst at OANDA Europe, the current optimism may be premature.

“As we enter the back end of earnings season, attention will fall almost entirely on the grand economic reopening, although the next couple of months will be more like a soft reopening as we feel our way through the next phase of the crisis,” he explained.

“Balancing preserving lives and livelihoods is no easy task when we’re still operating without a cure or vaccine.”

11.30am: ITV plans return to studios

FTSE 100 was steady in the late morning, adding 30 points to 5,879.

ITV PLC (LON:ITV) was the top riser in the index, jumping 5% to 75.9p, after announcing plans to gradually return to its offices and productions in line with governmental guidelines.

The TV network has been implementing remote working since the start of the lockdown, continuing to broadcast from its six channels.

Demand for advertising slumped 42% last month, but the public has been watching more TV, driving views up.

“As the economy moves out of hibernation, businesses will want to re-engage with consumers and the apparent resurgence of television in the crisis makes it an obvious way of doing so,” said Russ Mould, investment director at AJ Bell.

“Creating new ads might be more complicated in a world of social distancing but ITV is preparing the ground by working with agencies and potential advertisers.”

10.30am: markets await eased restrictions

The Footsie was steady, up 28 points to 5,878 as markets took a breather from yesterday’s gains.

Investors are eager to learn plans to ease lockdown restrictions in the UK, with Prime Minister Boris Johnson scheduled for a speech on Sunday.

Further to the UK construction PMI, analysts said that the reading may not return to its pre-virus high before 2022.

“It’s encouraging that the government remains committed to higher levels of investment and that banks are in a better position than after the 2008/09 crash to finance commercial construction projects and mortgages that underpin housebuilding,” commented Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

“But demand for office space likely will remain extremely weak, now that firms have adapted to their employees working from home and are looking to cut costs.”

9.45am: UK construction PMI books record low

The FTSE 100 was on the rise in mid-morning despite the UK construction PMI revealing the fastest decline since the survey began 23 years ago.

London’s big caps gained 32 points to 5,881, while sterling was 0.5% lower at US$1.2375.

The PMI reading fell to 8.2 in April from 39.3 in March, as 86% of survey respondents reported a reduction in business activity, reflecting shutdowns across the supply chain due to the coronavirus pandemic.

The previous record low was 27.8 in February 2009.

Experts say that the gradual reopenings scheduled for the upcoming weeks will be hampered by severe disruption across the supply chain that is set to persist in the long term.

“Looking ahead, construction companies widely commented on worries about cash flow, rising operating costs and severely reduced productivity, as well as a slump in demand for new construction projects,” said Tim Moore, economics director at IHS Markit, which compiles the survey.

8.35am: Footsie nudges higher

The FTSE 100 made a quiet start to proceedings on Wednesday with traders keeping their powder dry ahead of what is likely to be another batch of depressing economic updates.

The UK blue-chip index nudged just 6 points higher to 5,855.08.

Later this morning, we get UK data on construction, which should add to the picture of devastation provided by the services numbers on Tuesday.

Then, in the US we have the US ADP unemployment reading, providing the warm-up for Friday’s non-farm payrolls, which are expected to be a horror show.

“For now, markets appear to be pricing in the prospect that economic activity can improve from here on in, and while that may well be true, we still don’t know the extent of the economic damage that has been done already,” said Michael Hewson of the almost sanguine reaction to the increasingly dire economic stats being released daily.

“This is important given that some of the damage could well be very difficult to repair and bounce back from, meaning that instead of a “V” or “U” shaped recovery we could well see more of a gradual, and very long ‘U’. 

“This means there is a real risk that markets may well be underestimating the longer-term consequences of the changes that are taking place, and looking past the continued dire data.”

The FTSE 100 risers list was dominated by defensive stocks with online grocer Ocado (LON:OCDO) leading the way with a 3.6% gain after reporting a more than 40% rise in revenues.

AstraZeneca (LON:AZN), up 1.6%, was also in demand after its Farxiga heart drug won US approval overnight.

Cruise operator Carnival (LON:CCL) was off 3.1% after its rival warned over its survival chances.

Proactive news headlines:

Inspiration Health Group PLC (LON:IHC) chief executive Neil Campbell has said he is “delighted” with the med-tech company’s performance so far this year after it recorded a 27% increase in revenues in the first three months of 2020. That number does not include contracts to supply the NHS with ventilators announced on March 16 and 20, which are worth an additional £5mln in turnover. They will be accounted for in the second quarter, but even without these “exceptional orders” the company’s new business pipeline “remains strong”. CEO Campbell noted that Inspiration was positioned well for continued growth.

LoopUp Group PLC (LON:LOOP) has said it is trading “materially ahead of expectations” as the coronavirus pandemic lockdown measures drive a migration to remote working and demand for its virtual meeting products. In a trading update, the AIM-listed firm said revenue in the year-to-date from January to April was at least 40% higher year-on-year as existing customers increased their use of its products and new clients switched to the service from other providers. LoopUp also said it had seen increased usage of its multimedia capabilities, including a “disproportionality high increase” in video usage and more events using its ‘Event by LoopUp’ platform.

Integumen PLC (LON:SKIN) has said it is to double production of a reagent shipped to partner Modern Water used to help detect contamination to meet growing demand prompted by the coronavirus (COVID-19) outbreak. The first shipment has been made to fill back-orders, while the new production run has a list price of £500,000 per batch, Integumen added. In the same announcement, Integumen also said its RAWTest AI real-time alert system is to be retrofitted to new Modern Water’s Microtox units.

Eckoh PLC (LON:ECK) has highlighted “significant demand” for its CallGuard Remote product as the coronavirus pandemic causes a surge in remote working. The secure payments specialist said it has sold and deployed CallGuard, which allows agents to take payments securely in remote locations over the phone, to both new and existing clients over the last six weeks in sectors including retail, utilities, insurance and financial services. Eckoh also said it has seen “growing levels of interest” in its ChatGuard product, which assists in securing payments made over a live webchat.

Ncondezi Energy Limited (LON:NCCL) has finalised a binding agreement with GridX Africa Development for a pipeline of solar and battery storage projects in the commercial and industrial sector. The company has signed the agreement which gives the company the option, but not obligation, to fund a pipeline of projects in Mozambique. It can fund up to 100% of the projects, up to a total of £5mln. Seven potential projects have been identified with a potential solar capacity of 2.8 megawatts and 4.5 megawatts of storage. The initial project investments represent the potential for an annuity revenue stream of over US$750,000 per year.

Tekcapital PLC (LON:TEK) has reported record revenues and net assets in its full-year results as its portfolio valuation rose by almost 50%. For the year ended November 30, 2019, the intellectual property investment group saw its net assets increase by 40% to US$22.25mln, while net asset value (NAV) per share rose to 35 US cents from 30 US cents. The firm’s portfolio valuation, meanwhile, increased by 48% to US$20.3mln. The company also reported a pre-tax profit of US$5.52mln, up from US$4.55mln in the prior year, while revenue rose to US$7.72mln from US$6.83mln in 2018.

Jersey Oil and Gas PLC (LON:JOG) chief executive Andrew Benitz has highlighted a transformational year for the group’s asset growth as he commented in the company’s financial results statement for 2019. The period saw the firm increase resource inventory to over 120mln barrels as it picked up the Buchan assets and consolidated the Verbier discovery in the North Sea. The Greater Buchan project now comprises Buchan, Verbier, J2 and Glenn discoveries and development planning is currently taking place with an initiative of technical and commercial evaluation studies also underway, in which the company is working with neighbouring field operators to consider collaborative development in the area.

Braveheart Investments Group PLC (LON:BRH), the fund management and strategic investment group which recently undertook two oversubscribed placings to raise funds, has issued an update after recent share price movements and social media speculation on some of its investee companies. The group noted that the social media speculation concerned Braveheart companies which currently have projects in association with the Aptamer Group Limited. It pointed out that Paraytec Limited, in which it has a 100% holding, is in discussions with Aptamer Group and the University of Sheffield to define a project to develop a coronavirus (COVID-19) test. It added that Kirkstall Limited and Sentinel Medical Limited are also both involved in projects with Aptamer Group.

Galantas Gold Corporation (LON:GAL) (CVE:GAL), the gold producer and explorer, said it has filed a technical report regarding underground exploration on its 100% owned gold mine near Omagh, Northern Ireland. As outlined on April 24, 2020, the group said this technical report details a recent probe drilling campaign carried out underground at the Omagh mine. It added that the results of the campaign, combined with detailed mapping of the exposed mineralisation underground suggest zones of higher width of mineralisation within the vein, linking adjacent levels. Galantas said the results support a model that such zonal mineralisation may continue at depth, with enhanced exploration potential for targeting gold resources on site and within the Company’s license area. The technical report details the geological information earlier summarised in a January 16, 2020 release and is available on the company’s website.

Touchstone Exploration Inc. (LON:TXP) (TSX:TXP), an oil and gas exploration and production company active in the Republic of Trinidad and Tobago, announced that Canaccord Genuity Limited has been appointed as its joint broker with immediate effect, working alongside the company’s existing nominated adviser and broker, Shore Capital.

6.50am: Quiet start predicted

The FTSE 100 is expected to open slightly lower on Wednesday as investors remain cautious ahead of economic data that will reflect the impact of the coronavirus pandemic on the world economy.

Analysts at spread-better IG are expecting the FTSE 100 to open around 9 points lower after ending Tuesday’s session 95 points higher at 5,849.

Markets appear to be uncertain around exactly what kind of economic recovery will take place as the world begins to emerge from the pandemic lockdowns.

Today’s UK construction PMI will provide further clarity on the British economic situation following Tuesday’s record low for services sector activity, while later in the day markets will be bracing for the US ADP unemployment numbers ahead of the expected horror show on Friday of the monthly US non-farm payrolls.

Wall Street managed a positive performance overnight, with the Dow Jones Industrials Average closing 0.56% higher at 23,833 while the S&P 500 climbed 0.9% to 2,868 and the Nasdaq Composite rose 1.13% to 8,809.

The US markets have been boosted by an easing of lockdown restrictions in some states as well as a scramble to take advantage of research into a coronavirus vaccine by publicly traded companies.

The positivity around an economic recovery continued in Asia on Wednesday as the Hong Kong Hang Seng rose 1%. Markets in Japan were closed due to a public holiday.

On currency markets, the pound was 0.11% lower at US$1.2428 against the dollar, however, the data later today could provide a catalyst for movement.

Significant announcements expected on Wednesday:

Trading updates: Direct Line Group PLC (LON:DLG), ITV PLC (LON:ITV), Smith & Nephew PLC (LON:SN.), MPAC Group PLC (LON:MPAC), Ocado Group PLC (LON:OCDO), OneSavings Bank PLC (LON:OSB)

Finals: Vertu Motors PLC (LON:VTU)

Interims: Cambria Automobiles plc (LON:CAMB), Virgin Money UK PLC (LON:VMUK)

AGMs: GlaxoSmithKline PLC (LON:GSK), Standard Chartered PLC (LON:STAN)

Economic data: UK construction PMI, US ADP unemployment

Around the market:

  • Sterling: US$1.2428, down 0.11%
  • Brent crude: US$30.94 a barrel, down 0.1%
  • Gold: US$1,701.98 an ounce, up 0.78%
  • Bitcoin: US$9,019, down 0.29%

City headlines:

  • UK Chancellor Rishi Sunak is planning to wind down the government’s furloughing scheme next week by cutting wage subsidies amid concerns that the nation has become “addicted” – Times
  • UK cinemas could reopen as early as mid-July in time for the launch of the latest Christopher Nolan film, the boss of Vue has said – Daily Mail
  • Ocado is facing a shareholder revolt over ‘excessive’ pay as its chairman is questioned over his independence – Daily Mail
  • Volkswagen says the cost of crucial car components has risen sharply because of the coronavirus outbreak – Financial Times
  • In an explosive judgement, Germany’s top court accused the European Central Bank of exceeding its legal mandate and “manifestly” breaching the principle of proportionality with mass bond purchases – Telegraph