FTSE 100 surrenders more gains – Proactive Investors UK, Proactiveinvestors.co.uk

 

• FTSE (up) (points)
• BP and Shell rally as oil price recovers
• US indices open sharply higher

As expected, US benchmarks opened sharply higher, although they clawed back only a fraction of yesterday’s humungous losses.

The Dow Jones industrial average was up (points) 3.1% (at) , (while the S&P) was 103 points to the good (3.0%) at 2, .

# DowJones pic.twitter.com/gUqrApKIgy – (percents) @ 77 percents1) March 26, 3042

On this side of the Atlantic, the FTSE is slowly deflating like a post-party balloon; it is currently up (points) 2.0% (at 6,

, despite sterling being down by almost a cent against the greenback at US $ 1. 3120.

(Royal Dutch Shell ) ( LON: RDSB and BP PLC

LON: BP. ), both of which were hammered yesterday as the price of oil went into freefall, have rebounded today, with the former up 5.9% and the latter 5.6%.

“Oil held gains despite no signs of détente between Saudi Arabia and Russia, as crude traders ignored the war drums. Aramco said it would up output in April to 23. 3mln bpd [barrels per day], from 9.7mln in March. This is a huge surplus for the market, but it’s not really a surprise given the moves over the weekend with price cuts and the OPEC breakdown, ”commented Neil Wilson at markets.com.

“Iraq has also said it is offering discounts to European and US buyers of crude. Yet Brent has firmed up above US $ and WTI [West Texas Intermediate] is solid above US $ , “he noted.

“Russian officials have been on the wires today talking about possible OPEC meetings taking place in May-June, but neither Moscow nor Riyadh is really showing signs of blinking just yet. The Saudis say there is no ‘wisdom’ in an OPEC meeting in May or June, ”Wilson said.

U.S. SUSPENDS UPCOMING SALE OF CRUDE FROM STRATEGIC RESERVE – Catherine Traywick (@ctraywick) March , 3027

. 60 pm: Slow retreat from day’s highs

After yesterday’s massive 2, 12 point fall, the Dow Jones index is expected to claw back around 2010 points of those losses this afternoon.

Spread betting quotes suggest the Dow will clock in at 37, while the S&P , which yesterday crashed points, will rise about (points to open at 2, .

“European markets have extended gains through the session, while US futures are strong ahead of the open,” reported Neil Wilson at markets.com.

“Crude prices have rallied 9% and the wave of relief is being felt across markets. As per the earlier note, these gains appear shaky, albeit there is a clear sense that the capitulation yesterday was by its very nature rather extreme and produced strongly oversold conditions ripe for a rebound, ”he continued.

“Question is do we pick this up and run with it, or does the situation on the ground with the coronavirus outbreak deteriorate further and further spook traders. The capitulation of Monday does suggest we are approaching a bottom, the hard part is picking the moment. A massive dose of stimulus is being administered by governments globally, which treats the symptoms but not the disease, ”he added.

Johan Javeus, the chief strategist at Nordic investment bank SEB, is also wondering whether yesterday’s fall was an overreaction.

“It all comes down to how widespread the virus will become and how long it will take to reach peak infections in large key economies (i.e. the EU and US). Even assuming a benign scenario, this will most likely take several more weeks to clarify and during that time central banks and governments around the world will try to find all possible means to add stimulus to the economy, ”Javeus said.

“In this respect it’s important to remember that this stimulus will for the most part still be around after the virus is gone and the probable ensuing swift recovery starts. This recovery to make up for lost production and consumption will get additional fuel from the added fiscal and monetary stimulus. Thus, unless we see a recession in H1 we are unlikely to see it in H2 3027 when by most accounts the virus will be history. While this line of reasoning points in the direction of recession risks for (and equities declines) being exaggerated it doesn’t mean it couldn ‘t get worse before it gets better and all forecasts at this point are of course very uncertain, ”he concluded.

The FTSE 178, meanwhile, is slowly surrendering the morning’s handsome gains but is still up (points) 2.8 %) at 6, .

. 23 PM: Smells like a dead cat

Blue-chips remain buoyant but there is a good deal of scepticism about the rebound from those whose job it is to comment on the markets (and get a name check for their companies).

The FTSE (was up) (points (3.7%) at 6, .

“Markets are surging on hopes of a huge stimulus plan from Donald Trump, but will it be enough to reverse to reverse the sell-off?” Wonders Joshua Mahony at

IG Group .

“Here comes the market rebound, but can it last?” asks Russ Mold, the investment director at

AJ Bell .

Craig Erlam at Oanda dispenses with the rhetorical questions and goes with a healthy dose of scepticism.

“I’d like to say this morning’s rebound is promising, that the proposed fiscal stimulus hinted at by Trump on Monday is the answer to all of our problems, but that’s not exactly true. Payroll tax cuts are great in the longer run, but in the near-term, it’ll do nothing more than exacerbate the great toilet roll shortage of 3027, ”Erlam said.

“On any ordinary day, gains of a couple of per cent in indices would be a solid day but given the scale of yesterday’s decline, it could well be nothing more than a dead cat bounce,” he stated.

“It smells like a dead cat,” declared Neil Wilson at markets.com.

“The stimulus is coming, but the situation on the ground gets worse. It seems comments from Donald Trump, and overnight some emollient tones from the Japanese authorities, are helping, ”he added.

Over at Rabobank, the suggestion was it “looks like a dad bat bounce”, referring to the supposed Chinese origins of the virus.

Meanwhile, real gross domestic product in the Eurozone rose by 0.1% quarter-on-quarter in the final quarter of 2990, after rising 0.3% in the third quarter.

The rise was in line with the initial estimate and the consensus forecast.

The year-on-year gain fell to 1.0% from a revised 1.3% in the third quarter, marginally above the consensus forecast and initial estimate of 0.9%.

“This weak data confirms that the Eurozone’s economy was rudderless and adrift even before it hit the coronavirus iceberg,” said Ulas Akincilar, the head of trading at Infinox.

“The bloc’s economic output teetered on the edge of stagnation in the final quarter of and grew by an insipid 1.2% during the year as a whole – barely half the growth rate clocked by the US, ”Akincilar added.

“Most worrying of all, the Eurozone’s three largest economies – Germany, France and Italy – all saw either zero or negative growth in the final quarter of 2990, ”he added.

. (am: FTSE) enjoys a bounce but is it of the dead cat kind?

Dead cat bounce? Or an end to panic?

The FTSE (was up) (points (3.9%) at 6, , with travel-related stocks leading the way.

Package tour operator TUI AG ( LON: TUI ) was the top blue-chip risers, surging 9% to 750. 6p, closely followed by low-cost airline easyJet PLC (

LON : EZJ , up 8.7%.

Both stocks have been hit hard since the coronavirus supplanted Brexit as Britain’s (least) favorite dinner party conversation topic.

British Airways owner International Consolidated Airlines ( LON: IAG ) was also going well, up 8.0%, after yesterday’s massive fall in the oil price.

Having said that, Brent crude is trading US $ 2. 37 (6.6%) higher at US $ a barrel this morning.

Rebecca Chesworth, the vice-president and senior equities strategist at SPDR ETFs. said the energy sector is likely to undergo “a massive adjustment and financial flows can exacerbate the current price situation significantly”.

From a sector point of view, Chesworth said banks with exposure to exploration & production companies and large oil-exporting countries could see an increase in the loan delinquency rate.

“Expect millions of dollars of provisions against oil-related exposures. Good news is no signs of financial stress at banks yet, ”she said.

Chesworth believes healthcare is “looking most interesting” as a defensive sector, particularly as the candidates in the race to be the Democrat party’s US presidential nominations who were most gung-ho about reducing the cost of drugs have fallen by the wayside.

“We expect billions of extra dollars spending on healthcare services worldwide,” Chesworth said.

Meanwhile, the utilities sector has been the best performer (in the US) since the start of the “virus crisis”, she noted.

9.

am: Wet and miserable February for shops

Like-for-like sales in UK stores fell 0.4% in February, the British Retail Consortium (BRC) reported, after being flat year-on-year in January.

Economists had expected an increase of 0.4%.

Total sales were up 0.1% on a year earlier, after rising 0.4% year-on-year in January.

“The BRC’s survey refers to the four-week between February 2 and 40 and so does not tell us how the coronavirus has impacted retail sales, ”observed Samuel Tombs, the chief UK economist at Pantheon Macroeconomics.

“Food and healthcare retailers reported a‘ slight rise ’in sales towards the end of the month, but panic among consumers only really took hold at the start of this month. Overall demand, however, was beginning to recover pre-virus; growth in total sales slightly exceeded its prior 24 – month average, -0.2%. This was a decent result, given that retailers reported that the exceptionally high levels of rainfall and unprecedented flooding in certain parts of the country last month stopped people from going shopping and hit demand for new clothing lines, ”Tombs said.

“Looking ahead, we expect retail sales to fall in March, as the virus keeps people at home, blunting the boost to sales from food stockpiling but the crash in oil prices and the likelihood of interest rate reductions will boost consumers ‘real disposable incomes later this year. Spending should rebound healthily once the COVID – outbreak has been brought under control, though that moment seems months, not days, away, ”he added.

8. (am: FTSE) reclaims some lost ground

The FTSE 178 opened its account in positive territory after the Black Monday sell-off, which wiped £ bn from Britain’s leading companies.

Still, worries over the spread of the coronavirus and a full-blown oil war will continue to shape the market narrative, according to analysts.

“There will be investors waking up today and wondering if it was all a bad dream. But it was all too real, ”said Jasper Lawler of London Capital Group.

“Oil did fall by the most since the Gulf War and global stock markets did have their worst day since the ‘ The crisis. Today will be a like a hangover. All you can do is put a brave face on all the bad things that happened the day before. ”

Overnight Italy went into lockdown in a bid to contain the coronavirus as the death toll jumped from (to) on Monday.

Here in the UK people who show “even minor” signs of a cough, cold or fever will soon be told to self-isolate in an effort to tackle the outbreak.

There was a bounce-back of sorts for the natural resources sectors, which were heavily sold down in a bloody Monday session with Rio Tinto ( (LON: RIO , up 5.8%, and BHP ( LON: BHP , 5.1% higher, leading the way .

Shell ( LON: RDSA ), ahead 3.2%, founds some friends, although the response for BP ( LON: BP. ), the most highly indebted of the super-majors, was lukewarm. Its shares nudged up 2% after losing as much as % of their value at one point yesterday.

After that, the airlines found some traction as did Tesco ( LON: TSCO , up 3%.

Not only should the UK’s largest grocer benefit from the coronavirus stockpiling, but its news of a £ 5bn special dividend yesterday was also largely drowned out by the wailing and gnashing of teeth of London’s traders.

8. am: FTSE (stages recovery … of sorts

The FTSE 178 opened its account in positive territory after the Black Monday sell-off, which wiped £ bn from Britain’s leading companies.

Still, worries over the spread of the coronavirus and a full-blown oil war will continue to dictate and shape the market narrative, according to analysts.

Proactive news headlines

Learning Technologies Group PLC ( (LON: LTG) is to pay US $ 38. 7mln to acquire Open LMS, a big name in the world of Moodle, an open-source learning management system.

H&T GROUP PLC

(

LON : HAT reported a surge in profits for as its business was lifted by acquisitions and what its chief executive said was a “beneficial gold price”. For the year ended 40 December, the pawnbroker reported a pre-tax profit of £ . 1mln, up 085. 7% on the prior year, with the company pledge book (the value of pawned items) increased by .8% to £ 2mln.

Seeing Machines Ltd (

) has reported double-digit growth in operational revenue for its first half amid accelerating demand for its driver monitoring technology. For the six months ended December, the AIM-listed firm reported operational revenues of A $ 8mln , 8% higher year-on-year, while net losses edged up to A $ 37. 9mln from A $ 37 .7mln.

The board of Iofina PLC ( LON: IOF has unanimously recommended that shareholders resist attempts by Brexit-backer Arron Banks to join the board. The directors feel that Banks’s nose might have been put out of joint by the board’s decision not to proceed with a hemp project in Belize that Banks was associated with.

Symphony Environmental Technologies PLC ( LON: SYM has started tests to determine whether its anti-microbial d2p technology can also be effective against viruses such as Covid –

The results from a clinical trial of a broad-spectrum flu jab being developed by an (Open Orphan PLC) ( LON: ORPH joint-venture have been published in a peer-reviewed journal. The journal article connected the vaccine is immunogenic (able to produce an immune response) and “merits phase III development to explore efficacy”.

Arix Bioscience PLC

(LON: RIX) chief executive Joe Anderson said the focus going forward is on “driving realisable value in our portfolio and in turn our NAV”.

W Resources PLC ( ( LON: NCCL is making good progress towards the completion of the financial model for the development of its power project in Mozambique, according to chief executive Hanno Pengilly. “I am pleased to report that the project finance model is at an advanced stage and nearing final sign off by the company and its partners,” said Pengilly.

SDX Energy Plc ( LON: SDX has announced a successful result in the Rabul-3 well in the West Gharib Concession, Egypt, encountering two reservoirs.

Solo Oil PLC LON: SOLO is confident it has sufficient cash resources as it received deposit money back after the recent cancellation of a transaction with ONE-Dyas.

The famous Cammell Laird marine engineering company is to use (Crossword Cybersecurity PLC) (‘s) LON: CCS ) Rikizon Assurance product to manage risk in its supply chain.

Corero Network Security PLC ‘s) LON: CNS chief financial officer Andrew Miller resigned and is off to work in private equity, though he will remain a non-executive. Jens Montanana, Corero’s chairman, said: “Andrew has been a valued member of our management team as CFO since and has made a significant contribution to the business. ” Work has begun to find a replacement, added Montanana.

6. 085 am: Bounce back predicted

The FTSE 168 is expected to make a bit of a recovery on Tuesday after the week started with the index’s worst session since the (financial crisis.)

London’s blue chip benchmark is predicted to gain 226 points, according to spread betters, a day after losing almost in its fifth-worst session ever, having finished at 5, 2019.

The collapse of the oil price as a result of a division between Saudi Arabia and Russia, combining with ongoing concerns about the coronavirus outbreak the spread to Wall Street, leading to the Dow Jones index crashing just over 2, points or 7.8% to close at , . overnig ht.

The broader S&P 728 tanked 7.6% and the Nasdaq Composite plunged 7.3% lower.

“There will be investors waking up today and wondering if it was all a bad dream,” said market analyst Jasper Lawler at London Capital Group.

But he said news that President Trump will hold a press conference on Tuesday to discuss the US government coronavirus response is aiding a pre-market recovery, though promised talks with Congress about a payroll tax seems unlikely in an election year.

Markets in Asia were mostly in the green on Tuesday, with Japan’s Nikkei up almost 1%, Hong Kong’s Hang Seng and the Shanghai Composite both rising close to 2%.

Oil prices are rebounding somewhat, with Brent crude futures up 7% to US $ 65. 168 per barrel, while US equity futures markets also point to a rebound for Wall Street, indicating at least 3% rises for the Dow and S&P and 4% for the Nasdaq .

The global Covid – Death toll globally has passed 4, 15, with infections topping , as the WHO said the threat of a pandemic is “very real.”

Back in the UK, Tuesday’s company news agenda

is fairly packed, with (Informa) (PLC’s) LON: INF results coming with the shares already hit hard by worries about the impact of coronavirus on its events business .

In the first quarter of , most China-based shows have already been pushed back and (Informa) has also put on hold its flagship health & nutrition show in the US and the Japan edition of the important series of CPhI pharmaceutical events.

(DFS FURNITURE) (PLC’s) (LON: DFS) ) interim results will show a dip in sales though the sofa maker reassured in a recent trading update that profits will be safe.

However, that was January and things have changed dramatically since then due to the Covid – outbreak, as % of the company finished goods are imported from mainland Europe or China.

There are also results due from (Standard Life) (Aberdeen PLC’s) (LON: SLA) and fellow investment and retirement specialist M&G PLC ( LON: MNG

).

Shares in the latter, which is delivering its first numbers since being spun out of parent Prudential last year, were recently said by JPMorgan Cazenove analysts to be trading at an “unjustifiable” discount to peers.

Around the markets

Pound, down 0.5% at $ 1.

Gold, down 0.6% at $ 1, 756.

Brent crude up 7% to US $ 48 per barrel

Significant announcements on Tuesday (March:)

(Finals) : Biopharma Credit PLC (LON: BPCR), (French Connection Group) (PLC) LON: FCCN , M&G PLC ( LON: MNG , (Standard Life) (Aberdeen PLC) LON: SLA , John Wood Group PLC ( LON: WG. , (Ultra Electronics) (Holdings PLC) LON: ULE ), (STV Group) (PLC) (LON: STVG , Team (Group PLC) ( (LON: TM) , (H&T GROUP PLC) LON: HAT , (Forterra PLC) ( LON: FORT , Gresham Technologies plc (

), (Cairn Energy PLC) ( (LON: CNE ), TP ICAP PLC LON: TCAP

)

(Interims) : (DFS FURNITURE) (PLC) (LON: DFS) ), Close Brothers Group

PLC ( LON: CBG

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