London close: Stocks firmly higher after roller coaster session

25 March 2020

(Sharecast News) - London stocks had roared back to life by the close on Wednesday as investors continued to mull a slew of stimulus packages from around the world, and following the release of uninspiring data.
The <strong>FTSE 100</strong> ended the session up 4.45% at 5,688.20, and the <strong>FTSE 250</strong> was 4.57% firmer at 14,819.91.

Sterling was mixed against its major trading pairs, strengthening 0.57% against the dollar to last trade at $1.1829, but losing 0.22% on the euro to &euro;1.0882.

Stocks had kicked the session off firmly in the green on news that White House and Senate leaders had agreed a package to help prop up the US economy during the coronavirus pandemic.

By midday, however, London's benchmark was just above the waterline, before rebounding strongly in afternoon trading.

<em>Spreadex</em> analyst Connor Campbell said that if the measures announced in the last few days - "that is, the Fed's unlimited QE and this $2 trillion plan - don't create a sustained rebound, it is unclear what will".

"There are always the plans the G7 hinted at on Tuesday, though given the level of international cooperation required for that, who knows when they will materialise," he added.

Investors were mulling over the latest UK inflation data, which showed that consumer price inflation fell to 1.7% in February from 1.8% in January, in line with consensus expectations.

However, core inflation rose to 1.7% from 1.6%, coming in above consensus expectations of 1.5%.

Ruth Gregory, senior UK economist at <em>Capital Economics</em>, said the decline in CPI inflation "is a small sign of things to come".

"We expect the effects of the coronavirus crisis to drag inflation below 1.0% in the months ahead."

Market participants were also digesting the latest survey from the Confederation of British Industry, which showed that the retail sales outlook for April was the worst it has been since 2009.

The reported sales balance dropped to -3 in March from +1 in February, coming in above consensus expectations for a reading of -15.

However, the expected reading for April is -26 - the lowest since April 2009.

"The CBI's survey suggests that stockpiling of food in response to Covid-19 cushioned the blow to overall retail sales from falling demand for non-essential items in early March, though sales almost certainly have collapsed since then," said Samuel Tombs, chief UK economist at <em>Pantheon Macroeconomics</em>.

He added that unprecedented falls in sales lie ahead, pointing out that the latest survey closed on 13 March, 10 days before the government ordered the closure of all shops, except supermarkets and pharmacies, and told all but critical workers to stay at home.

On the corporate front, there was another string of Covid-19 updates, with dividend suspensions galore again.

<strong>Rentokil Initial</strong> was down 8.18% after it said it was cancelling its dividend and cutting pay in an effort to conserve more than ?500m in cash to strengthen its finances against the Covid-19 crisis.

The pest control and hygiene services company said it took the actions after the virus had a greater impact on its business in the past 10 days.

Housebuilder <strong>Bellway</strong> was 1.55% weaker after confirming it would postpone its interim dividend, as it warned of a slowdown in demand due to the coronavirus and subsequent government-ordered lockdown.

Fellow housebuilder <strong>Persimmon</strong> was 15.28% stronger after saying it had begun the orderly shutdown of its construction sites and closed all of its sales sites, and announced the cancellation of its dividend.

Construction and regeneration company <strong>Morgan Sindall</strong> was ahead 9.93% after it withdrew its guidance and warned on profits as it said the pandemic was disrupting operations.

Waste management company <strong>Biffa</strong> lost 11.4% after it cancelled its dividend, and said it will not be providing any guidance for the 2021 financial year as it expected the Covid-19 outbreak to cause "significant" disruption to its operations.

<strong>Market Movers</strong>

FTSE 100 (UKX) 5,688.20 4.45%
FTSE 250 (MCX) 14,819.91 4.57%
techMARK (TASX) 3,261.73 3.93%

<strong>FTSE 100 - Risers</strong>

JD Sports Fashion (JD.) 519.20p 20.16%
Legal &amp; General Group (LGEN) 187.65p 16.16%
Persimmon (PSN) 1,950.00p 15.28%
Associated British Foods (ABF) 1,852.00p 15.21%
Royal Bank of Scotland Group (RBS) 132.70p 13.72%
Rolls-Royce Holdings (RR.) 397.00p 13.40%
InterContinental Hotels Group (IHG) 3,430.00p 12.46%
easyJet (EZJ) 650.80p 12.21%
Whitbread (WTB) 3,009.00p 11.86%
Standard Life Aberdeen (SLA) 225.10p 11.77%

<strong>FTSE 100 - Fallers</strong>

Rentokil Initial (RTO) 340.10p -8.18%
Polymetal International (POLY) 1,269.50p -3.64%
Morrison (Wm) Supermarkets (MRW) 173.70p -3.37%
Coca-Cola HBC AG (CDI) (CCH) 1,746.50p -2.97%
Melrose Industries (MRO) 100.50p -2.76%
Land Securities Group (LAND) 600.40p -2.02%
HSBC Holdings (HSBA) 509.90p -0.99%
BT Group (BT.A) 131.56p -0.95%
Spirax-Sarco Engineering (SPX) 8,485.00p -0.82%
Ocado Group (OCDO) 1,240.50p -0.80%

<strong>FTSE 250 - Risers</strong>

Marston's (MARS) 42.38p 41.05%
Aston Martin Lagonda Global Holdings (AML) 281.10p 32.16%
National Express Group (NEX) 174.90p 30.23%
William Hill (WMH) 70.50p 27.03%
Virgin Money UK (VMUK) 73.84p 26.61%
SSP Group (SSPG) 290.00p 23.14%
Trainline (TRN) 290.00p 20.83%
Sabre Insurance Group (SBRE) 286.50p 20.45%
OneSavings Bank (OSB) 260.20p 18.38%
4Imprint Group (FOUR) 1,780.00p 18.27%

<strong>FTSE 250 - Fallers</strong>

Forterra (FORT) 191.60p -13.89%
Biffa (BIFF) 202.00p -11.40%
Marshalls (MSLH) 625.00p -8.69%
Avon Rubber (AVON) 2,350.00p -8.20%
Hochschild Mining (HOC) 118.90p -7.83%
Ibstock (IBST) 161.90p -7.80%
Plus500 Ltd (DI) (PLUS) 958.20p -6.65%
Wizz Air Holdings (WIZZ) 2,220.00p -5.49%
Spirent Communications (SPT) 195.20p -5.47%
Vistry Group (VTY) 588.00p -5.01%