FTSE slides as reopening rally runs out of steam
Fiona Cincotta June 9, 2020 4:59 AM
There is a little bit of stock taking happening this morning as investors regroup and pull back after several sessions with higher closes.
There is a little bit of stock taking happening this morning as investors regroup and pull back after several sessions with higher closes. For the moment the exuberance over the post-coronavirus reopening seems to have run out of steam, particularly in airlines and travel firms, which made some impressive gains Monday and late last week. Insurance firms are also under pressure as is British American Tobacco, despite the firm being on target to deliver net sales growth.
The ongoing protests in the US are also leaving their mark; although they are not affecting any blue chip bottom lines yet, they are an expression of instability that will eventually make itself felt in consumer spending, house and car buying and in the insurance sector.
The top gainer this morning is industrial software maker Aveva, which reported stronger pretax profits and stronger sales in the financial year but warned of disruption over the next six months. The company kept its dividend in place, signaling that its balance sheet remains in good shape.
Brent dips after overnight run on $43 level
Brent crude prices rallied overnight, supported by a gradual pick up in travel as the lockdown across Europe eases and travel restarts, but then dipped in the early London trade. Investors are now testing the $43 level and are running into resistance here after OPEC+ decided to extend their production cuts over the coming month but not to deepen them, as some have expected. For the moment OPEC’s focus is on compliance from those members which have not upheld their end of production curtailment, which will eventually mean lower supply levels over the coming two months.
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