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(Alliance News) - The FTSE 100 started Thursday's session cautiously on the front foot, with investors hopeful both Italy and Spain are reaching peaks in their respective coronavirus outbreaks.

London's blue-chip index was supported by oil stocks, the commodity buoyed as US Donald Trump said he will meet US energy executives this week to discuss plummeting oil values amid the Covid-19 health crisis and a Saudi-Russian price war.

The FTSE 100 index was up 34.95 points, or 0.5%, at 5,489.52 early Thursday.

However, more-domestic UK stocks were slightly lower. The mid-cap FTSE 250 index was down 10.64 points, or 0.1%, at 14,536.56. The AIM All-Share index was down 0.2% at 665.01.

The Cboe UK 100 index was up 1.3% at 9,315.00. The Cboe 250 was down up 0.5% at 12,556.58, and the Cboe Small Companies up 0.1% at 8,025.77.

In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.4% early Thursday.

"European markets are trading higher on the hope that worst may be over for the epicentre of Europe," said Naeem Aslam, chief market analyst at AvaTrade.

"The coronavirus outbreak seems to be stabilized in Italy. There is only moderate growth in new coronavirus cases and the death rate has eased off," Aslam added. "It is highly likely that Spain may be seeing its peak in the next couple of days, but the pain is only going to become worse for the UK as the country is still far from seeing the peak of the coronavirus cases and the deaths caused by it."

More than 900,000 people have been infected by the novel coronavirus and nearly 46,000 have died since it first emerged in the Chinese city of Wuhan late last year, according to an AFP tally.

Britain and France both reported their highest daily death tolls from Covid-19 on Wednesday, although there were signs the epidemic could be peaking in Europe.

Italy's toll – the highest in the world – climbed past 13,000, while Spain surpassed 9,000. But epidemiologists said the infection rate was continuing to slow.

Fernando Simon, head of Spain's health ministry's emergency coordination unit, said it appeared the country may have passed the peak.

The US is rapidly becoming the worst hit country, with its total number of infections rising above 215,000. The death toll in the US over the past 24 hours was a new one-day record of 884, and new known cases exceeded 25,000, according to a Johns Hopkins University database.

Against this backdrop, focus will be on US initial jobless claims due at 1330 BST.

"According to consensus among economists, the sad record from last week is about to be beaten, as economists expect another spike of 3.5m applications for unemployment benefit last week," said Danske Bank.

"We are likely to continue to see layoffs in coming weeks, while the US economy remains locked down and hence the jobs report for April will be extremely negative," Danske Bank said. "If claims have risen by another 3.5m, the April jobs report will show a decline in employment of at least 7m but, unfortunately, probably more."

Elsewhere in the economic calendar, eurozone producer prices are at 1000 BST.

Sterling was quoted at USD1.2408 early Thursday, higher than USD1.2395 at the London equities close on Wednesday.

The euro traded at USD1.0938 early Thursday, firm versus USD1.0927 late Wednesday. Against the yen, the dollar was quoted at JPY107.21 versus JPY107.11.

In Asia on Thursday, the Japanese Nikkei 225 index ended down 1.4%. In China, the Shanghai Composite closed up 1.7%, while the Hang Seng index in Hong Kong is up 0.5% in late.

Gold was quoted at USD1,596.76 an ounce early Thursday, firm against USD1,590.30 on Wednesday.

Brent oil was trading at USD27.30 a barrel early Thursday, up from USD25.38 late Wednesday, strengthening after President Trump said he will meet US energy executives this week to discuss plummeting oil values amid coronavirus and a Saudi-Russian price war.

Towards the top of the FTSE 100 was Royal Dutch Shell, 'A' and 'B' shares both up 4.4%, while BP advanced 3.3%, both benefiting from the higher oil price.

SEGRO was up 2.7% as the property investor decided to go ahead with the payment of a 14.4p final dividend in May.

The property investor said it is "very well capitalised" with a strong balance sheet, high liquidity, and "significant" headroom to its financial covenants. SEGRO had cash and undrawn facilities of GBP1.2 billion at the end of March.

Rental income would have to fall by 80% or asset values by 64% before any debt covenants are breached, the firm highlighted.

Trading in the early part of 2020, prior to the Covid-19 crisis ramping up, was "encouraging". SEGRO said it is working, on a case by case basis, with customers representing around a quarter of total headline rent regarding relief, primarily by delaying rental payments.

For the most recent quarterly payment date, being March 25, 71% of rent due has been paid, and around 25% is subject to discussions over rescheduling payments. At the same stage last year, 96% of rent had been paid.

Bunzl was down 1.9%. The distribution firm said its "resilient" business delivered a good performance in the first quarter of 2020, but it has withdrawn guidance due to Covid-19.

Revenue was up 4.5% at actual exchange rates, and when adjusted for trading days and at constant rates, revenue was up 6%. Of this, acquisitions contributed 3% and underlying revenue growth 3%.

"Trading has been strong in safety across the quarter and has strengthened more recently in grocery, healthcare and cleaning & hygiene. The foodservice and retail sectors, which together account for around 35% of group revenue, have been increasingly negatively impacted by the COVID-19 crisis in the latter part of March," said Bunzl.

Given uncertainty around Covid-19, the firm withdrew its guidance for 2020.

Bunzl said it has a strong balance sheet and has paused all acquisition activity. It will no longer propose a final dividend for 2019 at its annual general meeting later in the month.

Carnival shares sank 11% as the cruise operator reduced the size of a share placing but did say a note offering has been upscaled.

The firm has been hit hard by the global Covid-19 pandemic, with growing port restrictions around the world forcing the company to halt cruise operations and offer refunds to customers.

Carnival will be offering 62.5 million shares at USD8.00 each. This will raise USD500 million approximately, but Carnival had previously said it would be offering USD1.25 billion worth of stock. In a separate announcement, Carnival said it will be offering USD4 billion worth of senior secured notes, rather than USD3 billion planned before.

In the FTSE 250, Hays shares tumbled 14%. The recruitment firm said Covid-19 has caused a "very material deceleration in client activity", and it is now seeking to raise GBP200 million.

Trading between the start of 2020 and mid-March was in line with forecasts, the firm said, with like-for-like net fees down 5% year-on-year.

"However, since then the rapidly escalating impact of Covid-19 has driven a very material deceleration in client and candidate activity. To date, across our major markets, the impact has been felt most in Europe, and least in Australia," said Hays.

While unable to estimate the extent of the impact on earnings this financial year, it is likely to be "substantial" and operating profit for the financial year ending June is expected to be "materially" below consensus of GBP190 million.

Hays has decided to cancel its 1.11p interim dividend, due to be paid next week, and will look to return to paying dividends at an appropriate time.

It has also decided to raise proceeds of around GBP200 million in a share placing and subscription.

"To ensure that we have a strong balance sheet and can continue with minimal or no debt once our end markets stabilise, the board has concluded that it is prudent to now raise equity. This will both provide the group with a further liquidity buffer and importantly best allow us to pursue organic growth opportunities with new and existing blue-chip clients," said Hays.

By Lucy Heming; lucyheming@alliancenews.com

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