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(Alliance News) - Stock prices in London are seen opening in the red on Friday despite markets in the US having a strong session overnight due to a rising oil price.
In London, bus operators welcomed financial help from the UK government but budget airline Ryanair reported a drop in passenger numbers with nearly its entire fleet now grounded due to the Covid-19 health crisis.
IG futures indicate the FTSE 100 index is to open 20.0 points lower at 5,460.22. The blue-chip index closed up 25.65 points, or 0.5%, at 5,480.22 on Thursday.
The number of confirmed coronavirus cases around the world has soared past one million and deaths have topped 50,000 as the US reported the highest daily death toll of any country so far.
Despite more than half the planet living in some form of lockdown, the virus is continuing to spread rapidly and to claim lives at an alarming pace, with the US, Spain and the UK all seeing their worst days yet.
The economic cost of the pandemic is getting starker by the day, with new figures on Thursday showing that an extra 6.6 million Americans signed on for unemployment benefit last week, taking to 10 million the number of people who lost their jobs in the last two weeks of March.
Oil, however, was boosted by US President Donald Trump saying oil production cuts are imminent after talks with Crown Prince Mohammed bin Salman of Saudi Arabia and Russian leader Vladimir Putin.
"Oil soared 35% after Trump tweeted he expects Saudi and Russia to curb production by as much as 15 million barrels to halt the meltdown in oil. His tweet didn't mention if this amount would be per day, or over an extended period," said Ipek Ozkardeskaya at Swissquote Bank.
"And given the very significant number, we wouldn't be surprised to see investors disappointed by a much smaller action if there is any in the first place."
Brent oil was quoted at USD28.69 a barrel, retreating from USD30.02 at the London close Thursday. Brent had hit an intra-day high of USD36.16.
In the US on Thursday, Wall Street ended in the green, with the Dow Jones Industrial Average closing up 2.2%, the S&P 500 up 2.3%, and the Nasdaq Composite up 1.7%.
The session was boosted by gains for oil majors Chevron and ExxonMobil, which ended 11% and 7.6% higher respectively as the oil price jumped.
On Friday comes the closely-watched US jobs report for March, although the numbers could mask the full extent of the damage Covid-19 has caused to the world's largest economy.
The US economy is expected to have lost 100,000 jobs in March, while the unemployment rate is seen at 3.8%, up from 3.5% in February.
This jobs report will follow Thursday's initial jobless claims which reached a fresh record high. For the week ended March 28, seasonally-adjusted initial claims were a whopping 6.6 million, with the previous week's level revised up by 24,000 to stand at just over 3.3 million.
For perspective, the record high before the past two readings was 695,000, recorded in October 1982.
"Looking at the devastating jobless claims figures, it is possible we see significantly worse figures," added Ozkardeskaya.
In London early Friday, UK travel operators welcomed financial support from the UK government for the bus sector amid the collapse in demand caused by Covid-19.
Bus companies in England will receive almost GBP170 million in new government funding to ensure services continue to operate during the coronavirus pandemic.
UK Transport Secretary Grant Shapps said on Friday the investment will protect crucial local transport links across England for those unable to work from home.
FirstGroup Chief Executive said he was "pleased" with the help, while his counterpart at Go-Ahead Group David Brown said he was "very pleased". Stagecoach said the aid was "welcome".
In the FTSE 100, defence company BAE Systems said it is in a "strong" position with a large order backlog, mainly in the form of contracts from governments across the world.
The balance sheet is strong, BAE continued, as is liquidity. Covid-19 has had no material impact on financial performance in the first quarter of 2020, though disruption is beginning to increase.
However, BAE has still decided to defer its 13.8 pence per share final dividend for 2019 declared in February. An update on the dividend will be provided in July when reporting results for the first half of 2020.
Back in the FTSE 250, events and data firm Ascential has taken the "difficult" decision to cancel the Cannes Lions festival this year, having already postponed it due to Covid-19.
Ascential said it would not have been commercially viable to run it this year, with the next edition running in June 2021.
Ascential has decided to withdraw the 4.0p per share final payout for 2019 declared earlier this year, which will save it GBP15 million. Salary increases, including for some executive and non-executive directors, have also been halted.
Great Portland Estates said it is financially strong but warned only 62.9% of rent due in the first quarter of 2020 was collected, compared to 99.2% a year before and 99.3% in the last quarter of 2019.
Another 4.5% for the quarter is expected imminently, Great Portland said, with over half of the outstanding amount from retail, hospitality and leisure.
Elsewhere, budget airline Ryanair reported a 48% fall in passenger numbers in March to 5.7 million, as airlines bear the brunt of the coronavirus pandemic. It operated 33,000 flights in March, just under half of the budgeted number of 64,000.
Ryanair expects to carry out "minimal if any" traffic during April and May. It is currently operating less than 20 flights a day.
The firm expects pre-exceptional items post-tax profit of between EUR950 million and EUR1.00 billion in the financial year ended March 31, which is at the lower end of the previously guided range.
Ryanair will be booking a EUR300 million charge due to the ineffectiveness of fuel hedges made for financial 2021, it added.
Ryanair stressed it has one of the "strongest" balance sheets in the industry. No guidance is yet possible for its newly begun financial year.
Online trading firm CMC Markets said net trading revenue has been strong over its year ended March 31, especially in the last quarter due to a rise in market activity.
CMC sees contract-for-difference revenue nearly doubling to GBP214 million, while its stockbroking business is set to double annual revenue, to GBP32 million.
CMC has reaffirmed its policy of paying a total annual dividend of 50% of post-tax profit.
In Asia on Friday, the Japanese Nikkei 225 index closed flat after a late surge. In China, the Shanghai Composite is down 0.7%, while the Hang Seng index in Hong Kong is down 0.7%.
China's services sector recovered somewhat in March, data from Caixin showed on Friday, but still remained in contraction territory.
The headline business activity index rose to 43.0 from a record low of 26.5 in February, indicating an easing of the sector's downturn. The reading did, though, remain below the no-change mark of 50, signalling service sector output continued to shrink in March.
Covid-19 continued to weigh on demand in March, as highlighted by a further reduction in total new business. The rate of contraction, "though solid", was softer than that seen in February, Caixin said.
Later Friday are more services PMI readings from Germany, the eurozone, the UK and US at 0855 BST, 0900 BST, 0930 BST and 1445 BST, respectively.
By George Collard; georgecollard@alliancenews.com
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