Stern messages weigh on FTSE
Fiona Cincotta April 24, 2020 11:41 AM
Judging from this week’s government briefings, all fairly stern, the prospect of normalcy for UK businesses seems to be slipping further and further away.
Judging from this week’s government briefings, all fairly stern, the prospect of normalcy for UK businesses seems to be slipping further and further away. Talk of social distancing for the best part of 2020 and no vaccine potentially until next year would mean that many businesses even when they restart will have to operate at a much smaller capacity.
FtSE stocks slipped across the board as investors chewed on the new reality, with their overall mood not helped by the fact that European leaders failed to offer any more support at the end of their summit yesterday.
In London, aerospace component maker Meggitt was among the worst hit stocks, accompanied by product testing firm Intertek and airlines. Investors were also underimpressed with Burberry’s directors deciding to cut their salaries by 20% in the next three months, a drop in the ocean while shops across the UK remain shut. The luxury brand share price took a 4.5% hit this morning.
It was not all gloom and doom though and Reckitt Benckiser, supermarket chains and house builders recorded some gains in early trade. Persimmon also briefly moved into positive territory after revealing plans to restart construction work from Monday, following on similar decisions by Taylor Wimpey and Vistry.
The countrywide lockdown has worked in favour of online trading platform IG Group which saw a 23% jump in trading over the last quarter as housebound workers tried their hand out at investing.
Oil companies results
Oil majors Shell and BP are due to report results next week and if the numbers from Italian oil-and–gas major Eni are anything to go by they are unlikely to be pretty. Eni reported a loss of nearly €3 billion as it aligned the book value of its inventories to the new market prices, a process both Shell and BP will also have to go through. They will also comment on demand prospects for the rest of the year which is unlikely to be positive while the virus is gripping large parts of the globe.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.