With Europe fully in the grip of the coronavirus, and the spread speeding up in the US, it's little wonder that the markets have started on a weaker footing across Europe. But some glimmers of hope like the slight slowing down in the number of new UK cases and an antibody test that could be available within days in the UK, have helped the FTSE bounce from the lows it has reached.
Defense and aerospace contractor Meggitt, one of the first UK firms to decide to protect cash flow and not pay any dividend until the autumn is hit the hardest, down 13%. Meggitt’s decision had already come on Friday, but it came ahead of a broader recommendation from the ECB for banks to hold out on dividend payments for roughly six months. Other firms are likely to follow as they hunker down to survive the crisis.
Some UK stocks bounces
The number of cases in the UK is still just under 20,000 as the first two weeks of social distancing are nearly over. The UK, which is undoubtedly at least a week to ten days behind Germany and France on the virus spread curve is, for the moment, managing to contain the numbers to a lower band compared with Germany’s and France’s 80,000. Whether today’s numbers will lead to any easing of restrictions in the UK remains to be seen.
On the FTSE, several groups of companies have emerged as those that will emerged from the COVID-19 epidemic the least damaged, and they are clearly in the black this morning. Top of the leader board are precious metals and gold producers followed by waste management firms Pennon Group and Rentokil, pharmaceuticals, delivery companies, supermarkets and, for a dose of safe haven buying – utilities.