BP Share News (BP.)

(Alliance News) - London stocks got off to a positive start on Thursday, with easyJet topping the FTSE 100 as it reported a strong half prior to the intensification of the Covid-19 pandemic across Europe.

Focus lies on US initial jobless claims at 1330 BST.

"The last three weeks have seen a collective increase of more than 16 million [jobless claims] and another 5 million plus gain is likely this week," Lloyds Bank commented ahead of the US data.

The FTSE 100 index was up 25.16 points, or 0.5%, at 5,622.81 early Thursday. The mid-cap FTSE 250 index was up 147.03 points, or 1.0%, at 15,494.59. The AIM All-Share index was up 0.7% at 739.02.

The Cboe UK 100 index was up 0.5% at 9,512.22. The Cboe 250 was up 0.7% at 13,288.25, and the Cboe Small Companies up 0.1% at 8,604.88.

"Investors are shrugging off the pessimism and willing to focus on more positive things. Germany has drawn a plan to ease off the lockdown restrictions and traders are optimistic about this development," said Naeem Aslam at AvaTrade.

"Having said this, European markets aren't trading higher with bigger margins, we are only seeing some small gains, and it is likely that as the trading resumes, these small gains may disappear because of the selling pressure on the energy sector," he added.

Brent oil was trading at USD27.42 a barrel early Thursday, down on USD27.68 late Wednesday.

Oil prices have crashed as the coronavirus pandemic saps global demand, with the situation compounded by a supply glut resulting from a price war between OPEC cartel kingpin Saudi Arabia and non-OPEC rival Russia.

Adding to traders' worries, the International Energy Agency said Wednesday that 2020 was likely to be "the worst year in the history" of the sector.

London's oil majors were marginally higher in early trade. BP was up 0.4% while Royal Dutch Shell A and B shares were up 0.6% and 0.9% respectively. The stocks closed down 6.7%, 6.9% and 7.4% respectively on Wednesday.

Shell on Thursday pledged to become carbon neutral by 2050, matching a commitment by rival BP.

"Society's expectations have shifted quickly in the debate around climate change," Chief Executive Ben van Beurden said in a statement.

"Shell now needs to go further with our own ambitions, which is why we aim to be a net-zero emissions energy business by 2050 or sooner. Society, and our customers, expect nothing less."

In mainland Europe, the CAC 40 in Paris was up 0.6% while the DAX 30 in Frankfurt was up 0.7% early Thursday.

In Asia on Thursday, the Japanese Nikkei 225 index closed down 1.3%. In China, the Shanghai Composite ended up 0.3%, while the Hang Seng index in Hong Kong is down 0.5%.

Around the world, the total number of Covid-19 cases soared past two million, according to an AFP tally, and the death toll topped 134,000, according to Johns Hopkins University.

US President Donald Trump said he will announce Thursday the first plans for lifting coronavirus lockdowns across the US after the country passed the pandemic's "peak", mirroring a gradual easing in Europe.

His comments came shortly before the number of US fatalities – already the world's highest – reached a new daily record and became the heaviest one-day death toll of any nation.

Earlier, Germany also unveiled its plans for cautious reopening, becoming the first major European nation to take on the delicate task of restarting its economy without triggering a new wave of infections before a vaccine can be developed. However, Spanish Prime Minister Pedro Sanchez, who has allowed work to restart in some factories and building sites, warned that "nothing will be the same until a vaccine is found".

In the UK, the coronavirus lockdown will be extended for another three weeks, the government is expected to announce, amid renewed warnings that it is still too soon to start easing the restrictions.

Sterling was quoted at USD1.2494 early Thursday, flat against USD1.2493 at the London equities close on Wednesday.

The euro traded at USD1.0880 early Thursday, lower than USD1.0903 late Wednesday. Against the yen, the dollar was quoted at JPY107.82, up from JPY107.51.

In London early Thursday, easyJet was at the top of the FTSE 100, up 7.8% as it guided to a narrowed interim loss.

The low-cost airline said it expects to post a headline pretax loss between GBP185 million to GBP205 million for the six months to March 31, which would be improved on a loss of GBP275 million a year ago.

easyJet's fleet was fully grounded on March 30.

Revenue for the period was up 1.6% to GBP2.38 billion, with seat capacity down 7.6%. Airline revenue per seat at constant currency is expected to have increased by 10%, continuing the strong momentum seen in the first quarter.

"Decisive cost actions, deferring the purchase of 24 new aircraft and the raising of significant new finance ensure that easyJet has sufficient liquidity to endure a lengthy fleet grounding," easyJet highlighted.

There can be no certainty as to when commercial flights will restart. easyJet said it is working through different demand scenarios for re-starting flying, which could be done with as little as two weeks' notice.

Amid a tussle with easyJet's founder and biggest shareholder Stelios Haji-Ioannou regarding a multiple plane purchase from Airbus, easyJet noted that it has no ability to terminate its contract by force majeure and the level of direct OEM support for the operation of its existing fleet would "increase in cost significantly" if it did attempt to cancel the deal.

Given continued uncertainty, easyJet said it is not possible to provide guidance for the remainder of its financial year.

"However we continue to take every step necessary to reduce cost, conserve cash burn, enhance liquidity, protect the business and ensure it is best positioned for a return to flying," said easyJet.

Barratt Developments rose 3.3%. The housebuilder said that, between March 23 and April 12, it delivered 1,349 home completions. Its total forward sales are 12,376 homes, worth GBP2.89 billion.

"Our experienced board remains focused on taking the right actions and planning for the future, so that when appropriate to do so, we can re-start our sales centres, construction sites and offices safely and are well-placed to continue to deliver the high-quality homes the country needs," said Barratt.

In the FTSE 250, Dunelm was among the top performers, up 4.9%, as it reported healthy demand for online orders.

After a phased restart of its online business, this is now fully operational, and Dunelm said it has been able to serve a "high level" of customer demand. Recent online order levels have been "significantly higher" than those seen prior to Covid-19.

Its physical stores remain closed, in line with government guidance. In preparation for re-opening, Dunelm is working on changes to store operations that will help ensure employee and customer safety.

On its financial position, Dunelm said it is eligible to access funding under the Covid Corporate Financing Facility.

"The board is confident that the group has access to sufficient liquidity, even in the event of a prolonged store closure period. Currently, we would only anticipate the need to issue paper under the CCFF scheme in the event that our stores remain closed for a period greater than six months," Dunelm said.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.