Insurers, supermarkets and miners are being sold off on the FTSE this morning as it becomes clear that despite the recent plateauing of new cases in Europe’s worst hit countries, it will still be weeks before businesses and industries in Europe return to any semblance of normal.
However, encouragingly the FTSE league table is beginning to look more like a normal day’s trading with a healthy number of stocks on both sides of the index.
Tesco provided the first more comprehensive glimpse into how supermarkets fared during the corona crisis, showing that after the first few weeks of panic buying shop sales have fallen back to pre-crisis levels. Some items like soap, tinned tomatoes and baked beans have seen more than a 100% increase in sales but the chain had to also face much higher expenses, paying for additional staff not only to meet rising demand but also to cover absences. Tellingly, the company refrained from making forecasts for the rest of the year given the current unpredictable situation.
German travel group TUI, one of the hardest hit stocks during this crisis, bounced 6.8% after it signed a nearly $2 billion state-aid bridging loan with development bank KfW. TUI had to suspend its tour operator, flight, hotel and cruises last month and hopes that the loan will help it stay afloat.
Oil nudges higher ahead of OPEC meeting
Crude oil investors are positioning themselves for OPEC and Russia to provide them with good news tomorrow – a broad production cut that will take the currently superflous oil out of the market. Nothing is clear cut; Saudi Arabia and Russia have already delayed the meeting from Monday to Thursday because of disagreements while both wait for signs that the US will also join in the production reductions before committing to cuts themselves.