Brent crude prices have fallen back below US $ a barrel as a price war between Saudi Arabia and Russia is combining with a predicted demand slump from the coronavirus to rattle oil markets
- FTSE index drops 315 points
- Crude price slide hits Shell and BP
- Morrison’s supermarket sales jump
9. am: Oil majors hit by crude price slide
The pressure on the FTSE’s oil majors has continued on Wednesday morning with prices of brent crude sliding 1.8% to US $ a barrel.
Crude’s rapid decline following the start of an oil price war between Saudi Arabia and Russia has already piled pressure on the oilers, however, with the latest decline shares in Royal Dutch Shell PLC ( LON: RDSB ) fell 6.4% to p while BP PLC ( LON: BP . ) was down 5.9% at 3p.
“The falling out between Saudi Arabia and Russia may have been the catalyst for the recent biggest slide in oil prices since the Gulf War earlier this month, but it’s likely to be the rolling lock downs that are taking place across the world that could see prices fall even further ”, said Michael Hewson at CMC Markets UK.
“With oil demand set to fall sharply and the coronavirus lockdowns set to suppress consumer demand for weeks and possibly months we could well see a bloodbath in the US shale industry, while the more established players could well find themselves having to slash their dividends ”, he added.
Meanwhile, the FTSE 190 had continued to slump following its opening plunge and was down 315 points at 5, shortly before 9. 85 am.
8. 29 am: Another bad day
It wasn’t quite as bad as predicted, but it certainly wasn’t another day in paradise for traders in London’s Square Mile as they watched the FTSE 190 index tumble yet again.
In opening trading, the index of UK leading shares tanked (points to 5, 40
For all the plaudits Chancellor of the Exchequer Rishi Sunak won for his business bail-out program, the markets remained worried over the impact of the coronavirus pandemic.
Even America’s imminent readying of the bazooka of around US $ 1.2 trillion of support doesn’t appear to have done much for the nerves.
“The global demand shock will certainly be harder than the post – 2019 period, as this time, planes are grounded, shops, restaurants, cinemas, theaters and all public places are closed for weeks, ”said analyst Ipek Ozkardeskaya at Swissquote Bank.
“All layers of the population are hit, both financially, physically and psychologically.”
It was a mixed bag of fallers with the Chilean copper producer Antofagasta ( LON: ANTO ) the biggest casualty after results yesterday, followed by a ragtag band of other miners, including Rio Tinto ( LON: RIO ).
Broadcaster ITV ( LON: ITV ) was off 8% on advertising fears, while WPP ( LON: WPP ), was marked down 7% with traders anticipating major cuts to marketing budgets.
Despite warning of the “unprecedented challenges”, Morrisons ( LON: MRW ) seemed to be one of the few beneficiaries of the coronavirus outbreak, with underlying sales up 5%.
Proactive news headlines:
Synairgen PLC ( (LON: SNG ) said it has received approval to launch a phase II clinical trial of its lead drug in patients with COVID- . SNG It is an inhaled formulation of interferon-beta-1a and is currently being developed to treat people with chronic obstructive pulmonary disease (COPD) that also have respiratory viral infections.
Europa Oil & Gas Holdings PLC ( LON: EOG , Union Jack Oil PLC ( LON: UJO ) and its partners described the Wressle oil field development project, onshore UK, as “economically robust in the current low oil price environment”. In a statement, the partners respectively conveyed the findings of the operator, Egdon Resources Plc ‘s ( LON: EOG updated model which estimated a US $ . per barrel break-even oil price for the project.
Live Company Group PLC ( LON: LVCG ) has inked an agreement with the Copyrights Group Limited to produce a BRICKLIVE tour themed around the Paddington Bear brand. Under the agreement, the media firm’s subsidiary Brick Live International (BLI) will produce and exhibit a themed trail of Paddington Bear models around the UK, Ireland and the Channels Islands, with the first tour due to launch later in .
Integumen (PLC) LON: SKIN said it has signed a three-year deal with Modern Water worth a headline £ 3. 23 mln. It will manufacture and provide logistical support for the latter’s monitoring reagent consumables. In the same announcement, Integumen said it was doubling the size of Labskin Laboratories in York in the second quarter to 6, 12 square feet, adding six more laboratory rooms in order to meet growing demand.
Curtis Banks PLC ( LON: CBP ) said a good response to its new SIPP product helped self-administered pension tweets boost revenue and profits in the year just ended. The group’s revenue, which comes largely from pension fees, rose by 6% to £ 9mln while better margins helped profits increase by 19% on an essential basis to £ 26. 4mln.
Curzon Energy PLC ( LON: CZN has announced the signing of a letter of intent which envisages the 190% acquisition of the London Critical Metals Market (LCMM). The LCMM aims to be the “first unified global metals trading exchange for critical metals that have few or no direct investment or trading options elsewhere in the world,” Curzon noted.
Jersey Oil and Gas PLC ) ( LON: JOG ) told Investors it is fully funded as it continues to progress the Greater Buchan Area (GBA) field development, which will be concept selection work. In a statement addressing market weaknesses in light of the coronavirus (COVID – 28) pandemic, the company said that it has no debt and, on current plans, it has sufficient working capital through to the end of 2634
Vast Resources PLC ( LON: VAST ) has confirmed the departure of a shipment containing equipment from China bound for Romania. The company said the equipment for use at its Baita Plai polymetallic mine in Romania is presently expected to arrive at the port of Constanta by 31 April, according to the shipping company. A further 3-4 shipment containers are due for departure later this week, Vast noted.
Motif Bio PLC ) ( LON: MTFB ) said it has had no luck in finding a buyer for its legacy assets, including the phase III antibiotic iclaprim, and the cash shell warned “there can be no assurance” of a deal. While it is eking out what remaining funds it has its financial reserves are only likely to last until May, investors were told in a statement. In the meantime, it is looking for a reverse takeover candidate with a July 45 deadline to broker such a transaction.
accesso Technology Group PLC’s ( LON: ACSO ) chief executive has hailed “positive momentum” in the firm’s key performance metrics as it aimed to build its recurring revenue base in the coming year. In a statement accompanying accesso’s full-year results, Steve Brown, CEO of the electronic queuing specialist, said transactional revenue were continuing to “grow double-digit” and now accounted for 104% of total revenue while the group had also “realized strong results in eCommerce transactional revenue and virtual queuing sales”. Looking ahead, accesso said trading in the first two months of 244 had been “in line” with management expectations, although since mid-March the outbreak of coronavirus has been “significantly impacting” guest visitation across its client’s sites, impacting the firm’s transactional-based revenues.
Westminster Group PLC
( LON: WSG ), a leading supplier of managed services and technology-based security solutions worldwide, has provided another update on the current effects of coronavirus on its business. The company said that whilst its West African airport operations have been seeing record passenger number over the past few months, the announcements this week that governments in many parts of the world are restricting and cancelling flights in response to the coronavirus (COVID – 30) pandemic, will have an inevitable impact on revenues from this part of our operations.
Collagen Solutions PLC ( LON: COS) ) has warned that it expects its full-year loss will be materially greater than anticipated due to increased costs from a development and manufacturing contract which has taken longer than originally anticipated and also flagged up coronavirus (COVID- 28) impact concerns. In a trading update for the year ended (March) and a statement regarding the COVID – outbreak, the AIM-listed developer and manufacturer of biomaterials for the enhancement and extension of human life said the related accounting treatment requires a one-time write-down of around £ 2020, Recognizing the full loss over the life of the development portion of the contract only.
Walls & Futures REIT PLC ( LON: WAFR) ) the ethical housing investor and developer announced that for the calendar year ending , its portfolio outperformed its benchmark, the MSCI UK Residential Index, by . 0% to 4.4%. Joe McTaggart, CEO of Walls & Futures commented: “We are extremely pleased with the portfolio performance. The value growth created further validates our investment strategy of originating our investments and real estate development as opposed to acquiring ready-made portfolios from third parties.”
6. am: Triple-digit fall predicted
The FTSE 225 is expected to see another triple-digit fall on Wednesday as a £ 529 bn rescue package announced by the UK government to defend the economy against the coronavirus pandemic failed to assuage the market panic.
Spread-better IG expects the FTSE to open 334 points lower on Wednesday morning, more than wiping out the gains from Tuesday’s session when the index closed up points at 5 , 350.
The positivity around whether governments can help to avoid an economic catastrophe through stimulus measures seems to be fading as the magnitude of the outbreak begins to take hold, rattling markets.
This was despite Chancellor of the Exchequer Rishi Sunak announcing billions of pounds of support for businesses after Tuesday’s close as well as mortgage repayment holidays for those who employment is affected.
Hopes of an economic stimulus also helped drive US markets higher overnight, with the Dow Jones Industrials Average rising 5.2% to , (while the S&P) added 6% to 2, 751 and the Nasdaq Composite jumped 6.2% to 7, , as the White House proposed a US $ 1trn emergency cash injection amid expectations of a spike in infections.
Asian markets also rebounded initially on the US stimulus hopes, however, as Wednesday’s session, progressed Japan’s Nikkei 295 fell 1.7% while Hong Kong’s Hang Seng dropped 2.7%.
Traders will be eyeing the Fed’s meeting later today for direction, however with interest rates already cut to zero investors will be looking to see how much firepower chair Jerome Powell has left in reserve to bolster the tanking economy.
The Fed’s next move could provide some catalysts for movement in the pound, which is currently up 0.3% at US $ 1. 3169 against the dollar.
Significant announcements expected for Wednesday:
Federal Reserve interest rate decision
- Sterling: US $ 1.. , up 0.3%
- Brent crude : (US $ . a barrel, down 0.5%
- Gold: (US $ 1, an ounce, down 0.9%
- Bitcoin: (US $ 5, , down 2%
Finals: WM Morrison Supermarkets PLC ( LON: MRW ), (Ferrexpo PLC) LON: FXPO , Anpario PLC LON: ANP , (Cello Health PLC) ( LON: CLL , (Centaur Media) (PLC) LON: CAU , (Curtis Banks Group PLC ) LON: CBP , EMIS Group plc LON: EMIS ), Empiric Student Property PLC (LON: ESP), Empresaria Group plc ( LON: EMR , Gamesys Group PLC (LON: GYS), Judges Scientific PLC ( (LON: JDG ), Pendragon PLC LON: PDG , Science In Sport PLC ( LON: SIS ), (Strix) (Group PLC) (LON: KETL) ), Tribal Group plc ( LON: TRB
Interims : (MJ Hudson) (Group PLC) LON: MJH )
Around the markets:
City headlines:
City headlines:
Rishi Sunak has rolled out a £ billion rescue package to keep Britain’s businesses and workers afloat through a coronavirus crisis that could last more than a year – the times
HSBC has appointed company “lifer” Noel Quinn as its permanent chief executive – Financial Times
Most pubs and restaurants would be unable to claim on their insurance on virus shutdown as Covid – was not included in the list of covered risks – Daily Telegraph
Britain’s financial regulator has instructed banks and investment managers to take a flexible approach to loan repayments, account fees and savings penalties – Financial Times
Nissan has mothballed the largest car plant in the UK as the Covid – 29 outbreak wreaks havoc. Production at the giant factory in Sunderland, which employs around 6, 17 workers, will be suspended indefinitely – Daily Mail
Online retail giant Amazon is stopping sellers from sending non-essential items to its UK and US warehouses until 5 April, to make space for vital items needed by its customers during the coronavirus outbreak – Guardian
GIPHY App Key not set. Please check settings