Shell slashes first-quarter dividend, Sainsbury's puts its dividend on hold

London open

The FTSE 100 is expected to open 32 points higher on Thursday, having closed up 2.63% at 6,115.25 on Wednesday.

Stocks to watch

Royal Dutch Shell slashed its first-quarter dividend by 66%, saying it was “imprudent” to maintain payouts at pre-coronavirus levels with an uncertain demand outlook and and oil prices at rock bottom. Net income attributable to shareholders on a current cost of supplies (CCS) basis excluding identified items, plunged 46% year on year to $2.8bn as prices and demand slumped due to the Covid-19 pandemic.

Sainsbury's put its dividend on hold as the supermarket group warned conditions were too uncertain to make a decision at this stage in the Covid-19 crisis.Underlying pre tax profit for the year to 7 March fell 2% to £586m as group sales rose 0.1% to £32.4bn. Reported pretax profit rose 26% to £255m. Sainsbury's said sales excluding fuel rose 8% in the seven weeks to 25 April compared with 1.3% in the fourth quarter as grocery purchases surged. Sainsbury's said it had cash and funding in place to meet its obligations for the foreseeable future but that it was "prudent to defer any dividend payment decisions until later in the financial year" when the impact of the coronavirus crisis is clearer.

First quarter pre-tax profits at Lloyds Bank slumped 95% to £74m as the company took a “significantly” increased impairment charge of £1.4bn and pulled guidance due to the coronavirus pandemic. "The coronavirus pandemic presents an unprecedented social and economic challenge which is having a significant impact on people and businesses in the UK and around the world,” Lloyds said on Thursday.

GlaxoSmithKline said that the FDA has approved ‘Zejula’ (niraparib) as the only once-daily PARP inhibitor in first-line monotherapy maintenance treatment, for women with platinum-responsive advanced ovarian cancer regardless of biomarker status. The FTSE 100 pharmaceutical giant said a new, individualised starting dose was based on the patient's baseline weight or platelet count was approved for first-line maintenance treatment; with lower rates of haematological adverse events observed with the individualised dosing group. It said the supplemental new drug application was approved under the FDA's ‘Real-Time Oncology Review’ pilot programme.

Newspaper round-up

UK car production plunged by more than a third in March to its lowest since 2009 as the coronavirus pandemic forced factories to close in an unprecedented crisis for the industry. Just 78,767 vehicles left factory gates in the month, some 47,428 fewer than the same period in the previous year, according to the Society of Motor Manufacturers and Traders (SMMT), the sector’s lobby group. - Guardian

Facebook reported its slowest quarterly growth as a public company, pressured by a global slowdown in the digital advertising market due to the coronavirus pandemic. Like other tech companies, the social network is feeling the squeeze from the global pandemic, but its results still beat analyst expectations. Revenue rose 18% to $17.74bn, sending stocks surging more than 7% in after-hours trading. – Guardian

A blueprint for ending the lockdown and bringing Britain’s economy back to life could be unveiled as soon as Monday as ministers ramp up talks with business chiefs. Industry leaders have been asked to send the Business Department specific proposals on how their companies could reopen safely with a deadline of Saturday, insiders said. – Telegraph

French authorities have moved to extend their powers to prevent foreign investors from buying businesses in “strategic” sectors, ranging from defence to artificial intelligence. Bruno Le Maire, the economy minister, said in an interview that he wanted to block acquisitions by foreign “predators” tempted by lower share prices. “In this period of crisis, some companies are vulnerable, some technologies are fragile and could be bought by foreign competitors at a low cost. I won’t let it happen,” he said. – The Times

Bondholders of debt secured against shopping centres owned by Intu Properties are drawing up plans that could lead to them taking control of the assets. Clifford Chance, the law firm, and Moelis & Company, an investment bank, have been appointed to advise bondholders of £1.3 billion of debt secured against centres at Lakeside in Essex, Braehead, in Glasgow, Watford, in Hertfordshire, and the Victoria Centre in Nottingham. The instruction was first reported by React News, a property website. – The Times

US close

US stocks closed sharply higher on Wednesday as market participants cheered positive data from a potential coronavirus treatment from Gilead Sciences and an update from the Federal Reserve.

At the close, the Dow Jones Industrial Average was up 2.21% at 24,633.86, while the S&P 500 was 2.66% firmer at 2,939.51 and the Nasdaq Composite saw out the session 3.57% stronger at 8,914.71.

The Dow closed 532.31 points higher on Wednesday, reversing losses recorded in the previous session after investors digested a number of earnings reports and several US states began the process of reopening their economies.

Boosting sentiment throughout the session was news that a study of Gilead's Remdesivir drug undertaken by the National Institute of Allergy and Infectious Diseases met its primary endpoint, lifting expectations for a potential coronavirus treatment.

Gilead also published the results of its own study, which showed similar improvements in patients taking the drug to treat the virus whether it be on five-day or 10-day doses.

Elsewhere, following two days of deliberations, policymakers on the Federal Open Market Committee, the monetary authority's top decision-making body, acknowledged in their policy statement that the Covid-19 coronavirus posed "considerable risks to the outlook over the medium-term" and vowed to do its utmost to maintain loose monetary policy until the economy was firmly on the path to recovery.

Fed chairman Jerome Powell went even further in his post-meeting webcast, saying: "I would say that it may well be the case that the economy will need more support from all of us if the recovery is to be a robust one."