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(Alliance News) - Optimism in financial markets was tepid at the start of the week despite Germany and other countries taking steps towards the re-opening of their economies.

Housebuilders and oil stocks were among the worst performers in London on Monday, the former dented by data from Rightmove and the latter knocked as WTI crude prices in the US slumped below USD14.

The FTSE 100 index was down 44.95 points, or 0.8%, at 5,742.01. The FTSE 250 was down 125.48 points, also 0.8%, at 15,733.81, and the AIM All-Share was 0.6% at 764.06.

The Cboe UK 100 was down 0.3% at 9,722.46, the Cboe UK 250 was down 0.6% at 13,512.88, and the Cboe Small Companies up 0.5% at 8,827.10.

In European equities on Monday, the CAC 40 in Paris was down 0.9%, while the DAX 30 in Frankfurt was down 0.6%.

Pierre Veyret, technical analyst at ActivTrades, commented that the mood "remains uncertain".

"Market participants were happy to notice fewer daily deaths in New York, Italy, Spain and the UK even though we aren't out of the woods yet," Veyret added. "Despite those reassuring numbers coming from the most impacted areas, there is still a lingering fear that economies may reopen too hastily. Investors will then pay close attention to how the situation is going to evolve in the next few days in Germany after the country reopens stores today, a first step to the end of the virus crisis and a real experiment for other nations, especially in Europe."

The state of New York, epicentre of America's coronavirus infections, appeared to have passed the peak of the outbreak Sunday, as President Donald Trump bumped heads with governors over the pace of ending lockdowns.

The US has so far recorded more than 758,000 coronavirus cases and nearly 41,000 deaths, far more than any other nation.

New York has borne the brunt of the virus, which has killed more than 18,000 people in the state, according to a Johns Hopkins University tracker.

"We are past the high point, and all indications at this point is that we are on the descent," Governor Andrew Cuomo told a press conference.

Stocks in the US are on course for a lower start on Monday. The Dow Jones was pointed down 1.5%, the S&P 500 down 1.4% and the Nasdaq Composite 0.9% lower.

In the UK, Downing Street hit back at newspaper reports that Prime Minister Boris Johnson and his administration dragged their feet in the run-up to the outbreak of the coronavirus pandemic.

Number 10 accused the Sunday Times of "falsehoods" and "errors" after the newspaper published a piece in which a Whitehall source claimed the government "missed the boat on testing and PPE", referring to personal protective equipment.

The number of hospital deaths in the UK of people who tested positive for Covid-19 passed 16,000, with a further 596 announced on Sunday. The figure does not include those who died in care homes.

There was positive news from Germany as Europe's largest economy takes its first steps back towards normality on Monday.

From florists to fashion stores, the majority of shops smaller than 800 square metres will be allowed to welcome customers again, in a first wave of relaxations to strict curbs on public life introduced last month.

Chancellor Angela Merkel and regional state premiers announced the decision to reopen last week, though they have been careful to cast it as no more than a cautious first step. While the first shops will open their doors on Monday, each of Germany's 16 states is set to lift the restrictions at a slightly different pace.

Germany hopes to combine the lifting of restrictions with a more efficient tracing of the spread of Covid-19. The country wants to ramp up testing – it has already tested around two million people – and aims to produce around 50 million protective masks, including 10 million of the higher efficiency FFP2 standard a week from August.

The pound was quoted at USD1.2455 Monday, flat against USD1.2457 at the London equities close Friday. The euro was quoted at USD1.0861, up from USD1.0838.

The Japanese yen was weaker on Monday. The dollar was quoted at JPY107.73, up from JPY107.52. Fellow safe-haven gold was quoted at USD1,680.14 an ounce, lower than USD1,690.68.

WTI crude was priced at USD13.76 at midday, down from USD18.41 late Friday. Brent oil traded at USD27.15 a barrel on Monday, down from USD28.21 late Friday.

"In a sign of the testing times we are living through, the US oil benchmark, WTI, is trading at its lowest level this century. Oil is still one of the main fuels for a global economy which is effectively off the road while countries look to contain the coronavirus," commented Russ Mould, investment director at AJ Bell.

"WTI is also in a state of 'super contango', with the gap between the price paid for oil today and contracts for delivery in future months at its highest level in more than a decade," Mould added. "That is encouraging traders to store oil and hold out for higher prices. Today's barrels of oil are being sold at distressed prices as they struggle to find buyers and amid fears there may not be capacity left to house them."

London's oil majors were lower at midday. BP shares were down 1.8%, while Royal Dutch Shell A and B stock was down 1.3% and 0.8% respectively.

Elsewhere in the FTSE 100, housebuilders were lower after Rightmove said UK house prices fell in April due to the coronavirus outbreak.

Rightmove said the average asking price of "the daily dwindling number of properties coming to market" saw a monthly price fall of 0.2% to GBP311,950, with the annual rate of increase from last April being 2.1%.

Visits to property portal Rightmove fell by around 40% at the time of the lockdown announcement, it said, but this has now started to recover slowly.

Barratt Developments was down 4.9%, Taylor Wimpey down 4.4% and Persimmon down 3.4%.

In the FTSE 250, Rank Group rose 6.6% after the Grosvenor Casinos operator said a combination of cost cuts and financial help has slashed monthly expenses.

Gambling firm Rank, which also owns the Mecca Bingo brand, said roughly 7,000 of its 7,600 strong workforce have been furloughed, as it bids to weather the "economic turmoil" caused by the Covid-19 outbreak. UK government measures, and similar schemes in Spain and Belgium, will pocket Rank about GBP8 million per month.

Rank reported a mixed third-quarter trading performance. In the three months ended March 31, net gaming revenue rose 5% annually, though fell 4% on a like-for-like basis. Newly acquired Stride had a 3% like-for-like rise in the third quarter.

Elsewhere in London, Premier Foods was up 17% as it agreed a merger of its UK defined benefit schemes pension schemes, paving the way for a sharp reduction in future pension deficit contributions.

The agreement is a segregated merger of all the group's pension schemes - being the RHM, Premier Foods and Premier Grocery Products pension schemes - which will place all the schemes under one trust. The main benefit is that once the RHM scheme executes a buyout, a surplus would then be passed to the remaining schemes in deficit, and so would result in a "vastly improved" funding position.

Premier Foods also provided a trading update, stating that trading profit for its 2020 financial year ended March 28 was "at the top end of market expectations". The firm noted that its fourth quarter continued to see the positive momentum from prior quarters and march volumes "rose sharply to fulfil increased consumer demand during the outbreak of Covid-19".

By Lucy Heming; lucyheming@alliancenews.com

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