easyJet Share News (EZJ)

(Alliance News) - London stocks were staging a rebound on Tuesday after the previous day's market implosion, with down-beaten oil majors and travel stocks leading the way.

The FTSE 100 index of large-cap shares was up 229.80 points, or 3.9%, at 6,195.57 at midday on Tuesday after slumping a hefty 7.7% on Monday.

The mid-cap FTSE 250 was up 572.91 points, or 3.3%, at 18,120.06 on Tuesday, and the AIM All-Share was up 2.6% at 821.50.

The Cboe UK 100 was up 3.3% at 10,488.27, the Cboe UK 250 was up 2.7% at 16,055.63, and the Cboe Small Companies up 1.2% at 10,968.66.

In European equities, the CAC 40 in Paris was up 3.4%, while the DAX 30 in Frankfurt was up 2.9%.

"On any ordinary day, gains of a couple of percent in indices would be a solid day but given the scale of yesterday's decline, it could well be nothing more than a dead cat bounce," said Craig Erlam at Oanda.

"Ultimately, the sustainability of any rebound will hang on the policies we hear from various governments and central banks over the coming days," said Erlam. "Significant efforts to contain the spread and support companies facing cash shortages will be most effective in the near-term, far more so than just a constant reminder that fatality numbers are currently low and stocks are cheap."

US President Donald Trump on Monday said his administration would be meeting with lawmakers of his own party to discuss economic relief measures to mitigate the impact of the coronavirus outbreak spreading through the US.

"We're going to be meeting with House Republicans, [Senate leader] Mitch McConnell, everybody, and discussing a possible payroll tax cut, or substantial relief," he said.

"We're also going to be talking about hourly wage earners getting help, so that they can be in a position where they're not going to ever miss a paycheck," he said, adding he would also be discussing relief measures for companies affected.

Rabobank commented: "Though the overnight presidential reassurances have served to stabilise and indeed buoy markets overnight, Italian lawmakers have taken the decision to extend the quarantine in place in the Lombardy region to the entire country."

The unprecedented measures, in place until April 3, were extended from several large areas of the north to Italy's entire population of more than 60 million in a decree signed Monday night.

Since Covid-19 first emerged in China late last year, Italy has become Europe's hardest-hit country and has seen a rapid rise in cases to more than 9,000, with 463 deaths so far.

Italy has the world's second oldest population after Japan, according to the World Bank, and older people appear to be more vulnerable to becoming severely ill with the new coronavirus.

In the US on Tuesday, stocks are pointed for a rebound. The Dow Jones is seen up 4.2%, the S&P 500 also up 4.2% and the Nasdaq Composite up 4.3%. On Monday, they had lost 7.8%, 7.6% and 7.3%, respectively.

In London, Royal Dutch Shell was the top performer in the FTSE 100 as the market's biggest listing attempted to claw back some of Monday's losses.

Shell 'A' and 'B' shares were both up 11%, having both slumped 18% on Monday following a crash in oil prices.

Brent oil was quoted at USD37.24 a barrel on Tuesday, firm from USD36.22 at the London close on Monday, though still almost 20% down from USD46.00 late Friday.

The North Sea benchmark touched an intraday low of USD31.26 on Monday - its lowest level since early 2016 and suffering the biggest percentage drop since the Gulf War in 1991 following Saudi Arabia's decision to launch a production and price war.

Russia refused to agree to a proposal by OPEC ministers led by Saudi Arabia for a drastic cut of 1.5 million barrels per day, with Russian oil companies fearing loss of market share and of competitiveness against US shale production.

Heavyweight producer Saudi Arabia responded on Sunday with the biggest cut in its prices of the past 20 years in a bid to win market share.

Russian Energy Minster Alexander Novak said Tuesday that Moscow remains open to further cooperation with OPEC to stabilise the oil market. "I want to say the doors aren't closed," Novak told the state-run Rossiya 24 television network.

Saudi Aramco said Tuesday it will boost its supply of crude oil to 12.3 million barrels per day in April. Novak said Russia also could swiftly increase its production.

Aramco shares were up 9.4% in Riyadh on Tuesday.

While oil prices firmed, safe-haven gold gave back some of its recent gains. Gold was quoted at USD1,664.39 an ounce, down from USD1,668.05.

Fellow safe-haven the Japanese yen also slipped amid Tuesday's improved market mood. Against the yen, the dollar was quoted at JPY104.64 Tuesday, up from JPY102.10 late Monday.

The pound was tradig at USD1.3033 on Tuesday, down from USD1.3119 at the London close Monday. The euro was quoted at USD1.1361, down from USD1.1462.

Data from the eurozone in the morning showed the bloc managed to eke out marginal growth in the fourth quarter.

Seasonally adjusted gross domestic product rose 0.1% quarter-on-quarter in the last three months of 2019, in line with preliminary figures but half the rate of growth achieved in the third quarter.

On a year before, the single currency zone's economy expanded 1.0% in the final quarter of 2019. For 2019 as a whole, GDP grew 1.2% in the euro area, slowing from 1.9% in 2018.

Turning back to the FTSE 100, easyJet was up 8.1% after receiving upgrades from both Bank of America and Bernstein.

BofA raised the budget airline to Buy from Neutral, while Bernstein raised the stock to Outperform from Market Perform. easyJet shares have been battered over recent weeks - the stock down 26% since the year began - over fears that holiday demand will be dented by the novel coronavirus.

Other stocks, such as TUI and Carnival, were up 11% and 5.5% respectively at midday.

In the FTSE 250, Ultra Electronics was up 12% as it said Covid-19 is not currently hampering trading.

The defence & aerospace, security, transport and energy reported pretax profit of GBP91.0 million, more than doubled from GBP42.6 million. This was on revenue which climbed 7.7% to GBP825.4 million from GBP766.7 million.

Ultra Electronics ended the year with a "healthy" order book which stood at GBP1.02 billion, a 4.0% year-on-year rise from GBP983.9 million. The company added that although the duration and full impact of the Covid-19 spread is uncertain, the contagion is not currently hindering its trading.

DFS Furniture was down 7.9% as it reported a good start to its second half, though said it is unable to give "guidance with any certainty" for the full-year due to Covid-19.

The retailer of living room and upholstered furniture reported pretax profit of GBP15.9 million for the 26 weeks ended December 29, the company's financial first half, compared to GBP35.3 million a year earlier, as revenue declined by 5.7% to GBP488.0 million from GBP517.6 million.

DFS said its first-half performance was hurt by challenging market conditions, with consumer confidence and political uncertainty reducing retail footfall. However, second half trading has started "satisfactorily", it said.

By Lucy Heming; lucyheming@alliancenews.com

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