London open: Stocks rise as investors eye jobless claims, OPEC meeting
London stocks rose in early trade on Thursday following solid gains on Wall Street, as investors eyed the release of the latest US jobless claims data amid hopes that the Covid-19 outbreak is peaking.
At 0830 BST, the FTSE 100 was up 2.3% at 5,809.66, even as it emerged that the UK lockdown is set to be extended by three weeks.
London Capital Group analyst Jasper Lawler said: "The mood in markets continues to improve but it’s patchy. Virus cases continue to rise at a rapid clip but markets are extrapolating the data forward and hoping we’re close to a peak.
"Asian and European markets are playing catch-up to the rally on Wall Street with a more positive start on Thursday.
"It might not feel like it but the S&P 500 just entered a bull market! After rising 3.4% on Wednesday the US equity benchmark is now up 23% from the March low. A rise of over 20% demarks a bull market.
"The lockdown extension is a downside risk. The FTSE 100 is pushing higher even as it becomes clear that the UK lockdown will need to be extended. The incapacity of the Prime Minister only heightens the concern that there is just no exit strategy."
Lawler suggested the market rally is on "borrowed time" as he questioned the efficacy of lockdowns.
"Are lockdowns only full eased when virus cases drop to zero? How long will that take? Will testing capabilities and hospital resources be good enough to mean lockdowns can be avoided if there is a second wave?"
Investors were eyeing an OPEC meeting later in the day amid expectations that a production cut will be agreed, while US initial jobless claims at 1330 BST will also be in focus after last week’s 6.6 million surge.
In equity markets, cruise operator Carnival was the standout gainer, while InterContinental Hotels also advanced. Both stocks have been hit hard recently on concerns about the impact of the pandemic.
Just Eat Takeaway rallied as it said first-quarter orders rose 50%.
FTSE 250 housebuilder Redrow was up after saying it is eligible for access to £300m funding from the government’s Covid Corporate Financing Facility and that it has furloughed 80% of its staff due to the outbreak. FTSE 100 peers Barratt, Taylor Wimpey and Persimmon followed suit.
Diageo rose after saying it would pay its interim dividend as planned but the drinks company put on hold the next phase of its three-year share buyback as Covid-19 restrictions took a significant toll on its business.
Gambling company Flutter was in the black as it said its final dividend would be paid out in shares rather than cash, while paper and packaging maker Mondi gained even as it pulled its dividend and cut capital expenditure by up to €200m as plant closures forced by the coronavirus crisis hit production.
Rail and coach travel platform Trainline chugged higher as it announced a series of cost-cutting measures and said its executive team will take a pay cut amid a "significant" drop in passenger numbers due to the virus outbreak.
In broker note action, William Hill was boosted by an upgrade to ‘outperform’ at RBC Capital Markets, while Hammerson was knocked lower by a downgrade to ‘hold’ at HSBC.
FTSE 100 - Risers
Carnival (CCL) 962.00p 8.75%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,180.00p 8.26%
Barratt Developments (BDEV) 523.60p 7.74%
JD Sports Fashion (JD.) 564.80p 7.62%
InterContinental Hotels Group (IHG) 3,764.00p 7.08%
Melrose Industries (MRO) 100.65p 6.67%
Meggitt (MGGT) 285.60p 6.41%
Barclays (BARC) 97.81p 5.57%
Taylor Wimpey (TW.) 139.35p 5.49%
Persimmon (PSN) 2,135.00p 5.43%
FTSE 100 - Fallers
British American Tobacco (BATS) 2,918.50p -0.41%
Morrison (Wm) Supermarkets (MRW) 178.40p -0.22%
NMC Health (NMC) 938.40p 0.00%
Admiral Group (ADM) 2,206.00p 0.09%
Polymetal International (POLY) 1,416.50p 0.25%
M&G (MNG) 134.40p 0.30%
Sainsbury (J) (SBRY) 198.45p 0.30%
Reckitt Benckiser Group (RB.) 6,152.00p 0.33%
Unilever (ULVR) 4,107.00p 0.39%
AstraZeneca (AZN) 7,010.00p 0.56%
FTSE 250 - Risers
Premier Oil (PMO) 33.80p 16.83%
Redrow (RDW) 462.60p 14.28%
William Hill (WMH) 107.15p 13.43%
OneSavings Bank (OSB) 261.40p 12.77%
Playtech (PTEC) 219.30p 10.70%
Provident Financial (PFG) 193.80p 9.55%
Cineworld Group (CINE) 66.00p 8.87%
PureTech Health (PRTC) 266.50p 8.78%
Close Brothers Group (CBG) 1,124.00p 8.70%
Drax Group (DRX) 201.40p 8.57%
FTSE 250 - Fallers
Vivo Energy (VVO) 72.50p -6.57%
Barr (A.G.) (BAG) 496.00p -3.12%
Watches of Switzerland Group (WOSG) 222.50p -2.41%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,290.00p -2.12%
Mediclinic International (MDC) 276.40p -2.06%
Ninety One (N91) 182.00p -1.83%
Caledonia Investments (CLDN) 2,585.00p -1.71%
BlackRock World Mining Trust (BRWM) 293.00p -0.85%
BMO Commercial Property Trust Limited (BCPT) 83.60p -0.83%
Fidelity Special Values (FSV) 180.20p -0.77%