London midday: Stocks maintain gains amid coronavirus hopes
London stocks were still in the green by midday on Monday despite the release of uninspiring data, as investors took heart from a slowdown in new coronavirus cases and deaths.
The FTSE 100 was up 2.1% at 5,531.38, while the pound was 0.3% higher against the dollar at 1.2303, having fallen on Sunday night on news that Prime Minister Boris Johnson had been admitted to hospital with persistent coronavirus symptoms.
In commodity markets, oil prices fell after OPEC cancelled a meeting with Russia about potential production cuts. The price of Brent crude was down 3.6% at $32.91 a barrel, having shed about 10% in immediate response to the cancellation of the meeting.
Joshua Mahony, senior market analyst at IG, said: "Coming off the back of a week which saw huge declines in payrolls and a record-breaking spike in initial jobless claims, the current outperformance highlights the relatively robust nature for stock markets compared with the weeks gone by. Today’s gains have provided a huge boost for some of the more beleaguered stocks, with housebuilders and travel companies finally gaining ground despite huge concerns in the face of the coronavirus.
"With a decline in daily mortality rates across the likes of France, Italy, and New York, we are seeing some optimism that the current restrictions could be shorter than many had previously speculated. However, without a cure or vaccine, any easing on the current restrictions would likely short-term in nature, sparking a likely surge in cases before long."
On home shores, a survey out earlier showed the UK construction sector suffered its worst contraction in March since April 2009 as the coronavirus pandemic took its toll. The IHS Markit/CIPS UK construction total activity index slid to 39.3 from 52.6 in February, coming in well below expectations for a reading of 44.0. A reading below 50.0 signals contraction, while a reading above indicates expansion.
Survey respondents "overwhelmingly" attributed the decline in activity to the impact of the Covid-19 pandemic, with all three broad categories of construction work recording a fall in output. Civil engineering activity suffered the steepest rate of decline, followed closely by commercial building work.
Employment fell at the fastest pace since September 2010 and business expectations slumped to the weakest level since October 2008.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said : "As measures to contain the coronavirus Covid-19 pandemic were put in place across the UK, construction sites closed and builders lost their jobs on a frightening scale as overall activity fell to an extent not seen since April 2009. New orders were reduced to a trickle as the scale of the disease dawned on clients and lockdown severely hindered any further progress."
Elsewhere, a survey from GfK showed consumer confidence fell in March at the fastest rate since records began. GfK released an interim Covid-19 "flash" report using data gathered between 16 and 27 March. It showed that the long-running consumer confidence index slid 25 points between the first two and last two weeks of March to -34, with all measures that make up the index down.
Joe Staton, client strategy director at GfK, said: "The last time we saw such a decline was during the 2008 economic downturn. Our falling confidence in our personal financial situation and the wider economy reflects the new concern for many across the UK. Despite record grocery sales, and recent peaks for purchases of freezers, TVs and home office equipment as people prepared for a long period in the home, the major purchase index is down 50 points - a stark picture for some parts of the retail industry in the short to medium term."
In equity markets, Legal & General was standout gainer after saying late on Friday that it still intends to pay a final dividend for 2019 despite a warning from the Bank of England.
Meanwhile, investors were taking the latest batch of Covid-19 updates in their stride.
Rolls-Royce was rallied as it pulled its dividend and implemented pay cuts from the boardroom to the shop floor as it moved to mitigate the impact of the coronavirus pandemic. The aircraft engine maker said it would cut salary costs across its global workforce by at least 10% in 2020. Salaries for senior managers and the executive team would be reduced by 20% comprising a cut and deferral with an extra bonus deferral for the chief executive and chief financial officer.
Sports betting and gambling company GVC Holdings surged. The company said it now expects the closure of retail outlets and cancellation of sports events to result in £50m of losses per month after taking mitigating actions, versus a previous estimate of £100m per month. However, it also said it was withdrawing its second interim dividend.
Bodycote rose after saying that first-quarter trading had not been "significantly" impacted by the pandemic but that its proposed final dividend was under review given current uncertainty.
WH Smith was also up after announcing that it has secured new lending facilities of £120m that are conditional on raising new equity.
On the downside, Smiths Group lost ground after saying trading was increasingly affected by the Covid-19 crisis as the engineering company reported a 6% increase in operating profit.
Gambling software company Playtech was knocked lower after a downgrade to ‘neutral’ at JPMorgan.
FTSE 100 - Risers
Legal & General Group (LGEN) 189.25p 18.50%
Rolls-Royce Holdings (RR.) 295.20p 17.33%
Melrose Industries (MRO) 84.36p 12.09%
Barratt Developments (BDEV) 429.90p 11.87%
Taylor Wimpey (TW.) 112.65p 10.99%
Carnival (CCL) 680.80p 10.74%
Meggitt (MGGT) 239.70p 10.46%
Next (NXT) 3,728.00p 9.97%
ITV (ITV) 59.48p 9.30%
Prudential (PRU) 1,005.50p 9.27%
FTSE 100 - Fallers
Smiths Group (SMIN) 1,043.00p -1.65%
BP (BP.) 332.10p -1.54%
Halma (HLMA) 1,861.00p -1.51%
Spirax-Sarco Engineering (SPX) 7,782.00p -0.99%
Antofagasta (ANTO) 750.00p -0.95%
London Stock Exchange Group (LSE) 7,134.00p -0.92%
Sage Group (SGE) 554.20p -0.72%
Royal Dutch Shell 'B' (RDSB) 1,409.00p -0.66%
Royal Dutch Shell 'A' (RDSA) 1,462.80p -0.56%
Reckitt Benckiser Group (RB.) 6,222.00p -0.48%
FTSE 250 - Risers
G4S (GFS) 85.38p 22.11%
Dixons Carphone (DC.) 77.25p 18.39%
Premier Oil (PMO) 26.96p 18.04%
Bakkavor Group (BAKK) 75.80p 16.80%
Capita (CPI) 28.09p 16.41%
GVC Holdings (GVC) 561.60p 16.11%
Crest Nicholson Holdings (CRST) 186.80p 13.56%
4Imprint Group (FOUR) 1,846.00p 12.70%
Trainline (TRN) 311.80p 12.16%
Vistry Group (VTY) 571.00p 11.96%
FTSE 250 - Fallers
Playtech (PTEC) 163.55p -7.76%
Ascential (ASCL) 183.50p -4.72%
Aston Martin Lagonda Global Holdings (AML) 75.00p -3.78%
Drax Group (DRX) 168.10p -3.78%
Ninety One (N91) 162.60p -2.52%
Shaftesbury (SHB) 577.50p -2.37%
Spectris (SXS) 2,250.00p -2.00%
Ashmore Group (ASHM) 302.80p -1.43%
Energean Oil & Gas (ENOG) 668.00p -1.33%
IntegraFin Holding (IHP) 414.00p -0.84%