London close: Benchmark breaks into the green in late trading
London’s benchmark broke into the green by the close on Monday, having spent much of the session below the waterline as oil prices slid and as investors came to terms with the prospect of a prolonged lockdown.
The FTSE 100 ended the session up 0.97% at 5,563.74, while the FTSE 250 was 0.98% weaker at 14,624.63.
Sterling was mixed against its major trading pairs, falling 0.62% against the dollar to last trade at $1.2383, while it strengthened 0.54% on the euro to €1.1242.
The late turnaround on the main board came as equities opened higher across the pond, where sentiment was boosted after the news that Johnson & Johnson had identified a lead candidate for the treatment of the coronavirus.
Human testing on the vaccine was expected to begin in September.
Earlier, investors were digesting news that the People’s Bank of China has cut its seven-day reverse repo rate - which covers short-term loans - to 2.2% from 2.4%, which is the largest cut in half a decade.
“The news over the weekend was no more pleasant, with the death count nearing 34,000, up almost 7,000 since Friday,” said Oanda analyst Craig Erlam.
“Italy will be hoping that two consecutive days of fewer deaths is cause for optimism, although it may be cautious optimism following last week's false dawn.”
Erlam noted that the raft of global stimulus measures continued on Monday, with China’s central bank cutting its reverse repo rate by 20 basis points, the Monetary Authority of Singapore lowering the midpoint of the currency band, and Australia preparing to commit to $80bn of spending over the next six months, including wage subsidies.
“As we've seen already though, these measures aren't having the same impact in the market as they have in the past.
“While they may soften the blow of any downturn, they stand no chance of preventing it altogether and a global recession is coming.
“The hope though is that these measures will ensure it is as brief as possible and maybe even turbo charge the recovery.”
In equity markets, Rolls-Royce slid 11.9% as the Telegraph reported that the aerospace and defence engineer was facing a cash flow crisis due to the collapse in air travel caused by the coronavirus.
Also on Monday, JPMorgan cut its estimates for the European civil aerospace sector and said there is now a 75% chance that Rolls-Royce will need to issue equity.
JPM also said that Standard & Poor’s and possibly other ratings agencies will downgrade Rolls-Royce to non-investment grade.
Aerospace engineer Meggitt was sharply lower, falling 13.23%.
Convenience food group Greencore fell 5.88% after saying it was suspending its full-year guidance and scrapping its interim dividend amid a drop in demand for its food to go products due to the coronavirus outbreak.
Budget airline easyJet slid 7.2% as it said it was grounding its entire fleet in response to "unprecedented" travel restrictions and lockdowns imposed by governments in response to the coronavirus pandemic.
The company said it had reached agreement with the Unite union on furlough arrangements for its cabin crew.
It said the deal would be effective from 1 April for two months and meant that crew will be paid 80% of their average pay through the government's job retention scheme.
Shopping centre owner Hammerson tumbled 22.05% after it pulled its final dividend and guidance as government lockdowns forced many of its tenants to shutter their stores.
Dixons Carphone was knocked 12.71% lower by a downgrade at RBC Capital Markets, while Cineworld slumped 12.38% after a downgrade at JPMorgan.
On the upside, oil giants BP rose 5.92% and Royal Dutch Shell added 2.55%, even as oil prices fell to 18-year lows.
Brent crude was last down 13.22% ad $22.02 per barrel, while West Texas Intermediate lost 6.17% to $20.26.
Pennon gained 4.71% as it said its performance for the 2020 financial year was in line with management expectations, with revenue down due to prolonged wet weather.
Johnson Matthey rose 1.62% even as the specialty chemicals company warned annual results would miss expectations after the coronavirus crisis reduced demand and delayed shipments.
FTSE 100 - Risers
Pearson (PSON) 560.80p 8.10%
Rentokil Initial (RTO) 386.00p 6.66%
Polymetal International (POLY) 1,376.50p 5.93%
BP (BP.) 323.60p 5.92%
Scottish Mortgage Inv Trust (SMT) 563.00p 5.63%
United Utilities Group (UU.) 947.40p 5.50%
London Stock Exchange Group (LSE) 7,322.00p 5.38%
Auto Trader Group (AUTO) 443.30p 4.31%
Rio Tinto (RIO) 3,674.00p 4.14%
Pennon Group (PNN) 1,116.50p 4.10%
FTSE 100 - Fallers
Melrose Industries (MRO) 86.52p -18.53%
Meggitt (MGGT) 269.00p -13.23%
Rolls-Royce Holdings (RR.) 321.30p -11.90%
M&G (MNG) 120.00p -10.85%
Informa (INF) 423.70p -8.94%
Phoenix Group Holdings (PHNX) 606.70p -7.91%
easyJet (EZJ) 550.20p -7.50%
Carnival (CCL) 909.20p -7.38%
ITV (ITV) 62.38p -6.84%
Legal & General Group (LGEN) 195.50p -6.64%
FTSE 250 - Risers
BMO Commercial Property Trust Limited (BCPT) 68.30p 16.55%
PureTech Health (PRTC) 240.00p 11.63%
Future (FUTR) 985.00p 8.84%
Synthomer (SYNT) 248.00p 8.30%
BBGI SICAV S.A. (DI) (BBGI) 159.00p 7.80%
Worldwide Healthcare Trust (WWH) 2,835.00p 5.59%
Kainos Group (KNOS) 604.00p 5.23%
Homeserve (HSV) 1,017.00p 5.17%
Caledonia Investments (CLDN) 2,390.00p 5.05%
Polar Capital Technology Trust (PCT) 1,518.00p 4.83%
FTSE 250 - Fallers
Hammerson (HMSO) 66.64p -22.06%
Airtel Africa (AAF) 38.42p -21.59%
Aston Martin Lagonda Global Holdings (AML) 225.80p -18.81%
Signature Aviation (SIG) 157.15p -15.21%
Mediclinic International (MDC) 253.90p -14.68%
Hyve Group (HYVE) 19.78p -14.37%
Senior (SNR) 62.10p -13.75%
Dixons Carphone (DC.) 70.44p -12.58%
Cineworld Group (CINE) 46.86p -12.38%
Frasers Group (FRAS) 187.10p -10.99%