• FTSE 100 closes up 76 points
  • Pound weakens on Brexit woes
  • EU proposes €750bn stimulus package

5.15pm: FTSE 100 climbs into close

FTSE 100 index bounced back to close higher on Wednesday as the positive mood on equities continued and a weaker pound aided the benchmark.

Britain’s top share index closed up over 76 points, or 1.26% at 6,144, having been as low as 6,067 earlier.

Midcap FTSE 250 also gained ground, adding 210 points to 17,143. Sterling was down 0.77% against the US dollar.

“The rush back into the hardest-hit stocks shows no sign of abating however, and the top end of the FTSE 100 is dominated by names like Carnival, Rolls-Royce and IAG, while Ocado languishes at the bottom with a loss of over 6%,” noted Chris Beauchamp, chief market analyst at IG.

“In one sense, it is good to see the baton passed from tech towards more mundane sectors, while others might warn that these rebounds in  heavily-sold names may only be a brief recovery,” he added.

Rolls Royce (LON:RR.) was among the top five gainers on Footsie, surging nearly 10% on the day to 346.10p. Last week, the UK engineering stalwart said it expects to axe 9,000 jobs as it looks to make annual savings of at least £1.3bn. At the beginning of March, shares in Rolls were around the 600p mark.

Top gainer was Melrose Industries (LON:MRO), which closed up 11.99% at 118.65p. Shares have lost around 45% in the last three months.

3.55pm: Carnival announces a longer pause for Costa and AIDA cruises

The FTSE 100 wiped out most of its gains before close, bobbing 25 points higher to 6,097.

Sterling plunged further, down 0.7% to US$1.2243, as it is yet to recover from the bad news on Brexit talks.

“A balancing act was at play on Wednesday, between negatives like the US-China tensions (and how Hong Kong plays into them) and the economic hardships caused by the pandemics, and positives like the lockdown-easing measures the markets so eagerly celebrated on Tuesday, and news of  €750 billion EU recovery fund on top of a €1.1 trillion budget,” commented Connor Campbell from Spreadex.

Carnival PLC (LON:CCL) watered down its gains as well, rising 5% to 1,160.49p following an 18% jump earlier in the day.

The cruise operator, which as many travel firms enjoyed a rally as restrictions are lifted worldwide, announced a further pause for its arms Costa and AIDA Cruises until 31 July.

While the Costa update did not contain other detail, AIDA said all cancelled trips will be reimbursed in the form of travel credit plus a 10% bonus on top of the payment already made.

Guests can also opt to receive their money back, while travel agencies will receive 10% of the credit value of the cancelled cruises.

3.10pm: Wall Street opens higher, EU proposes €750bn recovery plan

The Footsie trimmed its gains on Wednesday afternoon as Wall Street opened higher.

London’s big caps were up 62 points to 6,130, while the Dow Jones added 215 points to 25,210 and the S&P 500 inched up 5 points to 2,997.

As expected, US indices rallied on enthusiasm about the lifting of restrictions worldwide, although gains could be easily wiped out by renewed tensions between the US and China.

Equities are also pushed higher by various governmental programmes to boost the economy.

For instance, the European Commission has presented today a €750bn plan to support recovery across its member states, with funds expected to come from new bond issues.

According to Berenberg, the proposal marks a major step forward despite “the debate about details may continue to rage until late 2020”.

“Discussions will focus on how much of the help comes in the form of grants and to what extent the help requires countries to carry out reforms,” analysts at the bank commented.

“In the end, we expect all 27 EU member states to agree on a slightly watered down version of today’s proposal.”

2.15pm: Sterling hit by Brexit woes

The Footsie held its gains in the early afternoon, bagging 93 points to 6,161.

Meanwhile, sterling sank 0.5% to US$1.2273 after the UK’s chief Brexit negotiator confirmed talks to the EU are not going well.

David Frost said the current mandate handed to chief EU negotiator Michel Barnier is not likely to lead to an agreement, while the Union should change its stance in order to reach a deal.

“Whilst a classic last-minute EU fudge is still broadly anticipated by the market, the language from David Frost was not optimistic,” said Neil Wilson at Markets.com.

“Undoubtedly sterling becomes increasingly exposed to headline risks around Brexit as we move out of the worst of the Covid-19 pandemic and back into the cut-and-thrust of negotiations.”

1.20pm: US to open higher over easier restrictions optimism

The Footsie added 94 points to 6,161 after lunch, while US indices were also expected to open higher riding the same wave of optimism over easier restrictions.

“The soft reopening so far appears to be going well and is leading to further easing measures, including the prospect of travel again before the summer is over which is coming as a huge relief to those in the industry that have been ravaged by the crisis,” commented Craig Erlam, analyst at OANDA Europe.

“As yet, the strained relationship between the US and China hasn’t hampered markets too much but that could quickly change.”

Back home, several chains have announced plans to resume trading before the 1 June reopening date set by the government earlier this week.

Halfords Group PLC (LON:HFD) is to fully reopen 53 of its 446 stores by Friday after trialling social distancing measures.

The car parts and bike seller has been operating 335 shops in a “dark store” model during lockdown, meaning customers were placing orders to staff on the doorstep without being allowed to enter.

Fast food restaurant Nando’s has also resumed service, with 94 venues operational as of Wednesday.

The chain will not allow customers to eat in and will offer a reduced menu to support staff.

11.45am: M&G higher after declaring dividend

FTSE 100 held on its gains before lunch, adding 87 points to 6,155.

M&G PLC (LON:MNG) was one of the top risers with a 9% jump to 138.6p after confirming it would pay its dividend at a cost of £410mln.

The distribution includes an ordinary dividend of 11.92p per share and a special demerger dividend of 3.85p.

The life and pensions group, previously known as Prudential UK, saw assets under management (AUM) decline slightly to £323bn though it announced plans to buy digital wealth management platform Ascentric, adding another £14bn to its AUM.

insurers have been told by the financial regulator to rein back payments during the pandemic, but M&G said it could afford the payout and it was the ‘right thing’ to do for shareholders.

Fellow blue-chip Auto Trader Group plc (LON:AUTO) rose 3% to 550.2p after announcing it will offer 25% discounts in June after reopening activities in England.

The online car retailer welcomed the government’s decision to allow car showrooms to reopen on 1 June, two weeks before all other non-essential shops.

10.30am: Working from home could dent future office demand

The Footsie had kept its momentum by mid-morning as investors remain optimistic on society becoming accustomed to social distancing measures.

The UK big caps advanced 88 points to 6,156, although all the recent gains could quickly be wiped out amid Brexit issues, US-China tensions, Hong Kong unrest and fears over a second wave of coronavirus infections.

WATCH: Morning Report: FTSE 100 rises as travel and holiday stocks continue recovery

British Land Company PLC (LON:BLND) shot up 8% to 409.5p despite reporting a £1.1bn post-tax loss for the year to March 31, 202, as the value of its retail property shrank sharply.

The real estate investment trust said around half of its customers are likely to suffer a relatively higher impact from the coronavirus crisis, including sectors such as food and drink outlets, leisure, fashion & beauty retail and other general retail.

But the value of British Land‘s offices business is holding up with most tenants paying rent on time, although the current crisis may dent future demand as companies could keep working from home.

The ONS today indicated there might be substantial well-being and lifestyle benefits from not being in the office.

“We are spending less time on travelling and work and more on free time, gardening and DIY, and sleep and rest” said the report.

Russ Mould, investment director at AJ Bell. added: “Already corporate leaders, including the CEO of Barclays Jes Staley, are publicly noting they might not need the same level of office space in the future as they eye the savings that could be achieved by reducing their footprint.

“It remains to be seen whether home working will pose the same existential threat to office real estate as online retail has to physical shops but it is a clear risk facing British Land, given offices account for substantially more than 50% of its holdings.”

9.45am: Markets ignore US-China red flags

FTSE 100 continued its ascent on Wednesday morning as markets focus on lockdown-easing measures from around the globe.

London’s leading index bagged 69 points to 6,136, as sterling dipped 0.3% to US$1.2299.

Spreadex, however, said investors are ignoring further potential red flags for the US-China relationship “with varying degrees of tenacity”.

“As Beijing add a bill banning mockery of the Chinese national anthem, while preparing to rubber-stamp a new set of national security laws, armed policed flooded the streets of Hong Kong in an attempt deter and disperse pro-democracy protests,” said analyst Connor Campbell.

“Beyond the terrifying implications for Hong Kong itself, it is also adding fuel to the fire of US-China tensions. Trump has said he is ‘displeased’ with China, and that he will take action against the superpower this week if the national security laws are imposed.”

8.30am: Further advance for Footsie

The FTSE 100 got off on the front foot once more with traders’ positivity around the easing of lockdown restrictions undimmed by political tensions both nationally and internationally.

The US and China are daggers drawn on the thorny issue of Hong Kong and the potential clampdown following social unrest and mass demonstrations there.

At home, prime minister Boris Johnson may have to face down a revolt of his own as the row over advisor Dominic Cummings’ ‘mercy dash’ to the north-east continues to simmer.

Later the European Commission is set to announce a new multi-billion stimulus package.

On the market, the travel stocks continued to attract buyers with TUI (LON:TUI) up a further 16% after the Lufthansa bail-out moved a step closer.

Cruise operator Carnival (LON:CCL) was up 8% and British Airways owner IAG (LON:IAG) was ahead 4.7%.

Wealth manager St James Place was 7.5% higher after defying the odds to see a net inflow of new business during April.

Proactive news headlines:

Iofina PLC (LON:IOF) has revealed it moved into a profit in 2019 after record iodine production for a second year running. In a statement covering the period for the year to December 31, 2019, the chemicals group reported revenues that rose by 22% to US$29.2mln while there was a pre-tax profit of US$600,000 compared to a loss of US$1.1mln. Net debt also fell to US$18.2mln from US$25.6mln and chief executive Tom Becker said the 2019 performance had left it in a “stronger position than ever from which to resolve its current debt situation”.

ECSC Group PLC (LON:ECSC) saw its shares move higher on Wednesday as the group announced the launch of its new Nebula Cloud cybersecurity breach detection service. The AIM-listed firm said Nebula Cloud will enable users to collect, store, and use Artificial Intelligence (AI) to analyse IT system logs and generate 24/7 alerts to potential cybersecurity breaches.

Kromek Group PLC (LON:KMK) said it has been awarded an extension to its contract with the Defense Advanced Research Projects Agency (DARPA) to detect and identify pathogens in an urban environment. The detection technology specialist said under the new deal it will be awarded up to US$5.2mln to further work on its mobile wide-area bio-surveillance system capable of detecting airborne pathogens. The extension follows completion of the base period of the DARPA contract which was awarded in December 2018 to develop a vehicle-mounted biological threat identifier.

Zoetic International PLC (LON:ZOE) said it has signed a deal with Path Investments PLC to sell its 75% interest in DT Ultravert (DTU), a method for hydrocarbon well stimulation and protection, as well as its nitrogen assets in Kansas. The cannabidiol (CBD) products firm said under the deal Path will issue Zoetic with 15mln new shares together with warrants to subscribe for a further 15mln Path shares at 1.5p each at any time between the first and third anniversaries of the completion of the transaction. Path has also agreed to pay Zoetic royalties equal to 5% of all gross revenues derived from the DTU technology attributable to the 75% interest in perpetuity.

Argentex Group PLC (LON:AGFX), a provider of foreign exchange services to institutions, corporates and high net worth private individuals, has announced the completion of terms for a new London headquarters as momentum behind its growth strategy gathers pace. The group said the new headquarters – located at 25 Argyll Street, London, and managed by W.RE. – will support the significant expansion of headcount across all areas as Argentex recruits to meet the growing demand from its diversified client base for its leading foreign exchange services and advice.

Supermarket Income REIT PLC (LON:SUPR) has joined forces with the British Airways pension fund to buy a 25.5% stake in one of the UK’s largest portfolio of J Sainsbury PLC (LON:SBRY) stores. The 50:50 joint venture will pay vendor British Land PLC (LON:BLND) £102mln for the stake in the portfolio, which comprises 26 Sainsbury stores predominately based in London and the south-east. After the transaction, Sainsbury’s will own 49% of the freeholds of the properties, insurance group Aviva 25.5% and the JV the remaining 25.5%.

Eden Research PLC (LON:EDEN) said its licence agreement with Bayer Animal Health has been amended as there will be increased investment in the project, in part financed by Eden’s successful March fundraise. The biopesticides group will also contribute its expertise in bio-active substances to the formulation development process. The pair are working on an animal shampoo, a conditioner, a spray, and an ear flush using Eden’s encapsulation technology.

Savannah Resources PLC (LON:SAV) told investors it has entered into an ‘added value services agreement’ with EIT InnoEnergy to assist project financing for the Mina do Barroso project, in Portugal. EIT InnoEnergy is part of a business investment platform (BIP) launched in September to accelerate the development of Europe’s battery industry. The aim of the BIP is to facilitate some €70bn of investments into EU based battery-related projects that will be required to meet peak European demand by 2023, Savannah noted.

Touchstone Exploration Inc (LON:TXP) (TSE:TXP) told investors it has entered into escrow for a US$20mln seven-year loan with Trinidad and Tobago’s Republic Bank Limited. The loan will carry interest of 7.85%, payable quarterly in arrears, and is secured against the company’s assets and subsidiaries. “We are pleased to be able to source local financing from Republic Bank, the largest lender in Trinidad and the Caribbean,” said Scott Budau, Touchstone chief financial officer in a statement.

In a separate statement after the close on Tuesday, Touchstone Exploration also announced that on May 22, 2020, certain employees exercised share options representing a total of 101,400 common shares of no par value in the company.

Genel Energy PLC (LON:GENL) has told investors that average output from the 25%-owned Tawke production sharing contract in Kurdistan, Iraq  is expected to reduce down to 100,000 barrels of oil per day (bopd) in 2020, assuming new wells aren’t drilled to arrest the natural decline. Without new wells the 2020 exit rate is forecast to be marked at around 80,000 bopd. In the first quarter, production from Tawke amounted to 115,210 bopd and in the second it was down to 100,000 bopd, while for the remainder of 2020 it is predicted at around 90,000 bopd.

Diversified Gas & Oil PLC (LON:DGOC) has now completed the second of its lockdown acquisitions, sealing the deal to acquire 6,100 US wells from Carbon Energy Corporation. It paid US$110mln gross – US$98mln net – to acquire the package of wells which yield around 9,100 barrels of oil equivalent (boe) along with associated midstream and infrastructure assets, adding 4,700 miles of mid-stream with “flow optionality and margin-enhancing opportunities”. This completion comes just a day after DGOC completed a separate but similar acquisition of assets from EQT Corporation for US$112mln, to add 9,000 boe per day from 900 wells.

Eurasia Mining PLC (LON:EUA) said it has appointed a new nominated adviser (Nomad) and a non-executive director as well as updating on the status of its shares, which are currently suspended from trading on AIM. The company said it has appointed SP Angel as its nomad and joint broker with immediate effect, and added that qualified lawyer and experienced corporate financier Iain Rawlinson will join the board as a non-executive director. Meanwhile, the company said it will make a further announcement in due course regarding the status of CITIC Merchant Co Limited’s role and strategic options in its current mining assets, and that its shares will remain suspended pending further notification.

Nuformix PLC (LON:NFX) unveiled a new development agreement on Wednesday, alongside a trading update which demonstrated the resilience of the group’s business during the coronavirus (COVID-19) lockdown. Nuformix, which unlocks the therapeutic potential of known drugs, has teamed up with Nasdaq-listed VistaGen Therapeutics. The pair will work on new crystalline forms of VistaGen’s AV-101, which is being developed to treat conditions including neuropathic pain and epilepsy. Turning to current trading, Nuformix chief executive, Dr Dan Gooding, said last year’s £1.25mln fundraise and the business’ low operating costs, meant the firm was “well-placed to ride out the current worldwide issues”.

Amur Minerals Corporation LON:AMUR), the nickel-copper sulphide mineral exploration and development company focused on the far east of Russia, has raised £0.5mln, before expenses, through a share placing to progress the development of the Kun-Manie nickel-copper sulphide project. The placing of 47,619,048 ordinary shares of no par value at a price of 1.05p each was undertaken by SP Angel acting as the company’s broker.

The Brunner Investment Trust PLC (LON:BUT) announced the appointment of Douglas Armstrong as an alternate independent, non-executive director for Carolan Dobson with immediate effect until the conclusion of the company’s annual general meeting on Wednesday. It noted that Armstrong is a solicitor at Dickson Minto W.S., the company’s lawyers and will act as chairperson of the meeting.

Sareum Holdings PLC (LON:SAR) , the specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune diseases, has announced that its CEO, Dr Tim Mitchell, will give a company presentation at BIO Digital 2020, which will be delivered on-line from June 8-12, 2020. The presentation will highlight Sareum’s two proprietary TYK2/JAK1 kinase inhibitor programmes, SDC-1801 and SDC-1802, targeting autoimmune diseases and cancers, respectively.

Circassia Group PLC (LON:CIR) has announced that the mandatory 30 day waiting period for US anti-trust clearance expired at midnight on May 26 and, accordingly, the proposed transfer of the Tudorza and Duaklir assets to AstraZeneca PLC (LON:AZN) first announced on April 9, 2020, is now expected to complete during the course of the next three days. A further announcement will be made once completion has taken place.

KRM22 PLC (LON:KRM), the technology and software investment company, has announced that further to its announcement of May 14, 2020, Keith Todd, the group’s executive chairman and CEO, Kim Suter, its chief financial officer, and Steve Sparke, a non-executive director of the company have subscribed for an aggregate of 449,998 new ordinary shares in KRM22 at a price of 30p each. Following the share subscriptions, the group added, Todd has a 10.69% holding in the company; Suter has a 0.11% holding; and Sparke has a 2.08% holding.

ADES International Holding PLC (LON:ADES) has announced that it will be holding its annual general meeting (AGM) on Monday, June 22, 2020, at the ADES premises, Building No. B5 Capital Business Park, Floor No.5, Sheikh Zayed City, 6th of October, Giza Governorate, Egypt at 4.00pm UK time/5.00pm Egypt time. Due to current travel restrictions and measures implemented in relation to the ongoing coronavirus (COVID-19) situation, remote access to the AGM will be provided to members upon request in accordance with the terms set out in the notice. The group said members are encouraged to submit their proxy forms to cast their votes, and, in addition, are requested to submit their questions in advance in accordance with the terms set out in the notice. Updates and details can be found on the company website at investors.adihgroup.com.

US Oil & Gas PLC (LON:USOP), the oil and gas exploration company with assets in Nevada, announced that at its annual general meeting held on Tuesday, May 26, 2020, all resolutions were duly passed.

Supply@ME Capital PLC (LON:SYME), the innovative international fintech platform which provides inventory monetisation services to European manufacturing and trading companies, announced that Proactive Research has initiated coverage on the company. The full Initiation note will be available on the company’s website at https://www.supplymecapital.com/investor/can and also be accessed at: https://www.proactiveinvestors.co.uk/companies/news/920493/supplyme-capital-plc—initiation-920493.html

Vast Resources PLC (LON:VAST), the AIM-listed mining company, said that a new video the company has produced introducing its Baita Plai Polymetallic Mine in Romania will be posted on its website at www.vastplc.com and on its social media pages. The new video entitled ‘Welcome to Baita Plai’ includes a driving tour of the Baita Plai complex, a walking tour of the renovated administration building as well as interviews with key personnel in the underground sections and floatation plant. The video concludes with several interviews of key staff working at Baita Plai, including the new general manager, chief mechanical engineer, a senior mining engineer and a geologist.

Benchmark Holdings PLC (LON:BMK), the aquaculture genetics, health and advanced nutrition company will be conducting a live presentation covering its interim results for the six months ended March 31, 2020, including an update on how coronavirus (COVID-19) is impacting the business. The event will take place at 12pm UK time on May 29, 2020, and the online presentation is primarily targeted at retail investors and is open to all existing and potential shareholders. Questions can be submitted during the presentation and will be addressed at the end. To register for the event go to: https://zoom.us/webinar/register/2515901406931/WN_zGmAtM7QRRiaJaeWWyNfQA

6.35am: Higher start predicted 

The FTSE 100 is expected to open higher on Wednesday as traders continued to remain positive over a post-coronavirus pandemic recovery despite brewing geopolitical tensions in the background.

Spread-better IG is expecting the FTSE 100 to open up 25 points after ending Tuesday’s session 74 points higher at 6,067.

Investors appear to have sustained their optimism over recovery as numerous economies begin to emerge from lockdown and plans are floated in countries such as Germany and Spain to begin lifting travel restrictions.

Sentiment has also likely been boosted by news overnight that biotech firm Novavax has started human trials of its coronavirus vaccine candidate in Australia.

The optimism was on full display overnight on Wall Street, with the Dow Jones Industrials Average closing 2.17% higher at 24,995 while the S&P 500 climbed 1.23% to 2,991 and the Nasdaq Composite rose 0.17% to 9,340.

However, the optimism gave way to a more mixed picture in Asia today as tensions began to once again flare on the streets of Hong Kong amid a debate on a controversial national anthem bill in the city’s legislature.

Hong Kong’s Hang Seng fell 0.41% to 23,288, but Japan’s Nikkei 225 was up 0.61%

There is also additional cause for concern that the situation in Hong Kong could further inflame tensions between China and the US as President Donald Trump warned he will take action against Beijing if it presses ahead with national security laws, potentially threatening the city’s status as a financial hub.

On currency markets, the pound was slightly weaker against the dollar, down 0.14% at US$1.2316.

Significant announcements expected on Wednesday:

Finals: British Land Company PLC (LON:BLND), Biffa PLC (LON:BIFF), Petropavlovsk PLC (LON:POG), Hibernia REIT PLC (LON:HBRN), Caledonia Investments PLC (LON:CLDN)

Interims: Britvic PLC (LON:BVIC)

Trading updates: St. James’s Place PLC (LON:STJ), Provident Financial PLC (LON:PFG), Pershing Square Holdings Ltd (LON:PSH)

AGMs: BP PLC (LON:BP.), Keywords Studios PLC (LON:KWS)

Around the markets:

  • Sterling: US$1.2316, down 0.14%
  • Brent crude: US$36.04 a barrel, down 0.36%
  • Gold: US$1,707 an ounce, down 0.27%
  • Bitcoin: US$8,873.70, down 0.33%

City headlines:

  • Top-rated companies including Disney, Apple and ExxonMobil have borrowed a trillion dollars in five months to boost their balance sheets against the coronavirus-induced economic downturn – Financial Times
  • Greggs’ popular vegan sausage roll – and its bestselling meat equivalent – are to make a return next month, after the bakery chain revealed it is to reopen 800 stores across the UK from mid-June – Guardian
  • Britain is likely to be running an annual deficit of 5 per cent of national income by the time of the next election in 2024 as the effects of coronavirus persist in undermining public finances, according to calculations based on forecasts by independent economists – FT
  • President Emmanuel Macron has announced an €8 billion rescue plan to revive the French car industry – Telegraph
  • HSBC is set to intensify the biggest shake-up in its 155-year history, putting even more jobs at risk – Daily Mail
  • Restaurateurs in London fear that homeworking and social distancing rules due to the coronavirus crisis will spell an end to lucrative City lunches – FT