London close: Stocks march higher despite ongoing Covid worries
London stocks closed in the green on Monday, despite growing concerns about rising coronavirus infections in the US.
The FTSE 100 ended the session up 1.08% at 6,225.77, and the FTSE 250 was 0.5% firmer at 17,198.66.
Sterling was weaker against its major trading pairs, last falling 0.41% against the dollar to $1.2286, and sliding 0.6% on the euro to €1.0930.
On the Covid-19 front, the US states of Texas, Florida and Arizona have all reversed some of their reopening plans following a spike in new cases.
Meanwhile, Leicester could be the first city in England to face a local lockdown after recording 658 new cases in the two weeks to 16 June, many of which are linked to outbreaks at food production plants.
“Florida set a new record for the number of new daily cases on Saturday, but the reading eased a little on Sunday,” said CMC Markets analyst David Madden.
“It is evident that the reopening of economies can bring about a surge in cases, but given the reaction by traders on both sides of the Atlantic, they don’t seem to care that much for now.”
Madden said while Florida and Texas had rowed back on certain aspects of reopening their economies, the moves were “relatively minor”, so it had not spooked markets.
“Traders will be keeping an eye on the situation to see if the new measures help contain the virus.”
In equity markets, BP closed up 3.38% as the oil giant agreed to sell its petrochemicals business to chemical company Ineos for $5bn.
“The asset disposal means that BP have achieved their goal of selling-off $15bn worth of assets one year ahead of schedule,” noted David Madden.
“Bernard Looney took over as CEO earlier this year, and he is keen to restructure the company, as well as reduce its exposure to fossil fuels too. Earlier this month the group revealed plans to cut the headcount by 15%.”
The company recently said it would incur an impairment charge of up to $17.5bn, Madden said, adding that BP revised its long-term 2020-2050 price assumption for Brent crude to $55, which was a “huge factor” in the impairment charge, he said.
“In April, Royal Dutch Shell cut their dividend so there is a lot of talk that BP will cut their pay-out too, so their second quarter update in early August will be closely watched.”
IAG flew 3.97% higher after British Airways reportedly reached a deal to cut 350 pilots and put another 300 in a pool for rehire when needed.
Elsewhere, Energean surged 22.21% after saying it had agreed to exclude Edison E&P’s Norwegian subsidiary from its takeover deal, and cut capital expenditure guidance as oil companies wrestle with a slump in prices amid the coronavirus crisis.
The deal, originally worth $750m, will now cost Energean a gross $284m after ditching Edison’s Algerian assets in April.
Capital expenditure guidance was cut to between $760m and $780m, from a previous $840m.
Drax shares rose 9.59% amid speculation the temporary power provider could be a takeover target.
The Mail on Sunday suggested Drax could be in early stage talks to be bought by an unnamed energy company, noting chatter of a 340p a share bid price, valuing the group at £1.35bn.
On the downside, Carnival was 5.12% weaker after saying it will pay a hefty 7.5% on top of interbank rates to borrow $2.8bn (£2.3bn) to shore up the embattled cruise operator's finances as the Covid-19 crisis casts doubts on its future.
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 230.60p 3.97%
Standard Chartered (STAN) 439.20p 3.93%
Kingfisher (KGF) 223.10p 3.91%
Pearson (PSON) 582.40p 3.63%
BP (BP.) 314.90p 3.38%
Barclays (BARC) 114.50p 3.17%
Burberry Group (BRBY) 1,588.50p 3.16%
ITV (ITV) 73.80p 2.87%
3i Group (III) 845.60p 2.70%
Polymetal International (POLY) 1,589.50p 2.58%
FTSE 100 - Fallers
GVC Holdings (GVC) 742.80p -2.72%
Flutter Entertainment (FLTR) 10,920.00p -2.04%
Avast (AVST) 522.50p -1.69%
Unilever (ULVR) 4,443.00p -1.68%
Aveva Group (AVV) 4,060.00p -1.60%
JD Sports Fashion (JD.) 619.00p -1.05%
Barratt Developments (BDEV) 497.20p -0.88%
Admiral Group (ADM) 2,302.00p -0.56%
Informa (INF) 464.50p -0.56%
Land Securities Group (LAND) 551.20p -0.54%
FTSE 250 - Risers
Energean (ENOG) 541.00p 22.21%
Drax Group (DRX) 255.20p 14.34%
TUI AG Reg Shs (DI) (TUI) 389.20p 7.54%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,580.00p 5.76%
Wizz Air Holdings (WIZZ) 3,312.00p 5.48%
easyJet (EZJ) 686.40p 5.34%
Hammerson (HMSO) 86.14p 4.90%
AO World (AO.) 146.20p 4.43%
OneSavings Bank (OSB) 263.00p 4.37%
Royal Mail (RMG) 172.20p 4.36%
FTSE 250 - Fallers
Cineworld Group (CINE) 57.86p -10.55%
BMO Commercial Property Trust Limited (BCPT) 64.40p -8.41%
Carnival (CCL) 919.00p -5.12%
PayPoint (PAY) 612.00p -4.67%
Barr (A.G.) (BAG) 452.00p -4.64%
UK Commercial Property Reit Limited (UKCM) 61.60p -4.35%
Oxford Biomedica (OXB) 718.00p -4.01%
Go-Ahead Group (GOG) 870.00p -3.87%
Workspace Group (WKP) 664.00p -3.58%
William Hill (WMH) 118.85p -3.26%