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(Alliance News) - The FTSE 100 rebounded on Thursday after a sharp drop on Wednesday, managing to register modest gains despite coronavirus fears continuing to persist.
Investor caution has stemmed from the US, where dozens of states including Texas, Florida and Arizona have seen infections spike in recent days.
Some US officials who loosened restrictions on business, dining, public gatherings and tourism are now urging residents to again stay home.
Disneyland, near Los Angeles, delayed its planned July 17 reopening without announcing a new date for the world's second-most visited theme park, while Apple and Nike have closed stores that had recently reopened.
The issue had become serious enough for previous virus hotspots New York, Connecticut and New Jersey to announce they will impose a 14-day quarantine on people arriving from areas with high infection rates.
The FTSE 100 index closed up 23.45 points, or 0.5%, at 6,147.14. The UK flagship index closed down 3.1%, at 6,123.69 on Wednesday.
The FTSE 250 ended down 38.71 points, or 0.2%, at 17,112.12, and the AIM All-Share closed down 1.05 points, or 0.1%, at 885.30.
The Cboe UK 100 ended up 0.4% at 10,417.11, the Cboe UK 250 closed down 0.5% at 14,612.43, but the Cboe Small Companies ended down 0.6% at 9,421.25.
In Paris the CAC 40 ended up 1.3%, while the DAX 30 in Frankfurt ended up 0.7%.
"Indices have managed to clock up some passable gains this afternoon, although this is more of a holding action rather than a solid rebound from yesterday's heavy losses. The key question for investors now is whether the rise in cases is a series of localised outbreaks or the beginning of a real second wave," said IG Group's Chris Beauchamp.
"If the former, then we could see the steady rise in indices resume, but if it is the latter then stock markets, having already rallied sharply from their lows three months ago and heading into the quieter summer period, may well be at risk of further declines. In one way the price action of the past two days looks similar to previous drops since March - a quick and dramatic fall that is then steadily clawed back," added Beauchamp.
In the FTSE 100, London Stock Exchange Group closed up 2.2% after the exchange operator poached Anna Manz, the current Johnson Matthey chief financial officer, as its own CFO.
Manz departs London-based speciality chemicals company Johnson Matthey after close to four years, stepping down November 20 - the day before Johnson Matthey's interim results publication. The search for her successor has begun. Johnson Matthey closed down 0.4%.
At the other end of the large-cap index, Rightmove ended the worst performer down 4.2% after Berenberg downgraded the property portal to Sell from Hold. The German bank said the 'Say No To Rightmove' campaign dissatisfied agents are waging against the company has the potential to derail future revenue and margins.
In the FTSE 250, Petropavlovsk ended the best performer, up 7.5%. The Russian gold miner said Thursday it has commenced trading of its secondary shares on the Moscow Stock Exchange, following its approval on Wednesday.
At the other end of the midcaps, Royal Mail ended the worst performer, down 12% after the postal operator reported a slump in full-year profit and announced plans to cut 2,000 management jobs.
Revenue for the financial year that ended in March was GBP10.84 billion, up 2.5% from GBP10.58 billion the year before, which comprised 53 weeks. UKPIL parcel volumes were up 2%, lower than expected, due to threat of industrial action in the third quarter and impact of Covid-19 on international import volumes in the final quarter. Parcel revenue was up 4.6% for the year, due to targeted pricing actions.
However, group pretax profit dropped to GBP180 million from GBP241 million as operating costs rose 3.7% to GBP10.62 billion. To save costs, Royal Mail is to cut around 2,000 UK management roles, which is expected to deliver an annual operating profit benefit in the 2022 financial year of GBP330 million.
Looking out, Royal Mail continues to expect UKPIL to be "materially" loss-making in the financial year ahead, while GLS profitability may potentially be reduced.
The pound was quoted at USD1.2405 at the London equities close, lower from USD1.2427 at the close Wednesday. The greenback retained its safe-haven allure, despite, recent Covid-19 health concerns being focused on the US.
The euro stood at USD1.1216 at the European equities close, down from USD1.1263 late Wednesday, amid dollar strength.
Meanwhile, the European Central Bank defended its bond-buying programme in its latest meeting minutes.
In a shock decision in May, Germany's Constitutional Court threatened to block the Bundesbank, the local central bank, from participating in the stimulus plan unless the ECB could show within three months that its government debt purchases are not "disproportionate".
While the court made clear that its ruling did not affect the ECB's programmes on shoring up the economy in the coronavirus pandemic, it had raised uncertainty over a key crisis-fighting tool at a time when Europe is facing the biggest economic storm since World War II.
The Asset Purchase Programme is a "proportionate" measure helping to deliver the ECB's price stability target, "with sufficient safeguards having been built into the design of these programmes to limit potential adverse side effects," the minutes of the most-recent monetary policy-setting meeting read.
ING analyst Carsten Brzeski said the minutes "are clearly an attempt to address the concerns of the German constitutional court without explicitly saying so".
Against the yen, the dollar was trading at JPY107.17, up from JPY106.44 late Wednesday.
Stocks in New York were marginally higher at the London equities close as investors grappled with a mixed batch of economic data, after initial jobless claims topped estimates and durable goods orders came in better than expected.
The DJIA was flat, the S&P 500 index up 0.1% and the Nasdaq Composite up 0.2%.
Another 1.5 million Americans were sent to the unemployment line in the week to June 20, figures from the US Department of Labor showed on Thursday.
The 1.48 million claims in the week to last Saturday were down slightly from the previous week's level of 1.54 million. However, the latest figure was higher than the 1.3 million claims the market had pencilled in, according to FXStreet, and remain a historically high level. The latest data take the total number of Americans to file for unemployment since the Covid-19 crisis began to bite in March to around 47 million.
US durable goods orders gained more than expected in May, the Commerce Department said, supported by renewed demand in the transportation sector as auto and aircraft factories began working again.
The 15.8% jump to USD194.4 billion in goods reversed April's sharp drop of 18.1%, which was revised even further downward in the May report.
Elsewhere, the US economy shrank by 5% in the first quarter of 2020, latest figures from the Bureau of Economic Analysis confirmed.
Brent oil was quoted at USD40.44 a barrel at the London close, unchanged from the close Wednesday.
Gold was quoted at USD1,760.11 an ounce at the London equities close, lower against USD1,775.65 late Wednesday.
The economic events calendar on Friday has US personal consumption expenditure index figures at 1330 BST - the core reading is the Federal Reserve's preferred gauge of inflation.
The UK corporate calendar on Friday has first-quarter results from supermarket chain Tesco and interim results from pub operator Marston's.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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