(Alliance News) - London stocks managed to close in the green on Monday as investors focused on the re-opening of some European economies following weeks of strict coronavirus lockdowns and falling daily death tolls.
Equity markets edged higher despite WTI crude oil prices crashing to multi-decade lows amid demand worries and the looming expiry of the May contract.
The FTSE 100 index closed up 25.87 points, or 0.5%, at 5,812.83. The FTSE 250 closed down 36.56 points, or 0.2%, at 15,822.73, and the AIM All-Share closed up 4.48 points, or 0.6%, at 763.75.
The Cboe UK 100 ended up 0.7% at 9,815.75, the Cboe UK 250 closed up 0.1% at 13,598.94, and the Cboe Small Companies ended up 0.3% at 8,804.33.
In European equities on Monday, the CAC 40 in Paris ended up 0.7%, while the DAX 30 in Frankfurt ended up 0.5%.
Stocks were heartened by some European countries beginning to re-open their economies after stringent lockdowns imposed to stem the spread of Covid-19.
Some shops reopened in Germany and parents dropped their children off at nurseries in Norway as tight restrictions in place for weeks were lifted in parts of the continent.
But Chancellor Angela Merkel urged Germans to stay disciplined, warning: "We stand at the beginning of the pandemic and are still a long way from being out of the woods."
After being hit hard by the virus that first emerged in China late last year, Europe has seen encouraging signs in recent days, with death rates dropping in Italy, Spain, France and the UK.
Spain on Monday recorded 399 coronavirus deaths in the last 24 hours, its lowest daily count in weeks, and authorities are starting to shut some makeshift facilities set up to relieve the overburdened health system, including a morgue at a Madrid ice rink. France, which on Sunday recorded its lowest number of hospital deaths since March 23, also said a nationwide lockdown in force for a month was beginning to bear fruit.
A total of 16,509 people hospitalised with coronavirus in the UK have now died, health ministry figures showed Monday, up by 449 – the lowest daily toll for a fortnight. Figures are, however, always lower on a Monday due to reporting delays over the weekend.
And in the US – the country with the highest number of deaths and infections – the governor of hard-hit New York, Andrew Cuomo, said the outbreak was "on the descent".
Chris Beauchamp, chief market analyst at IG, said: "While there is still a long way to go on the reopening of economies across the globe, the signs of a return to a modicum of normality have provided further good news for investors. It will be a long, difficult road, and it is by no means clear that consumer activity will rebound quickly, but the signs of popular discontent with ongoing lockdowns are certainly there to be seen – the next few weeks of restrictions will be much harder for governments to manage, and credible plans need to be put in place."
Stocks in New York were lower at the London equities close, with the Dow Jones down 1.0%%, the S&P 500 index down 0.7%, and the Nasdaq Composite flat.
The pound was quoted at USD1.2458 at the London equities close Monday, flat compared to USD1.2457 at the close on Friday. The euro stood at USD1.0873 at the European equities close Monday, higher against USD1.0838 at the same time on Friday.
Against the yen, the dollar was trading at JPY107.72 compared to JPY107.52 late Friday.
Gold edged up slightly to USD1,692.55 an ounce at the London equities close Monday against USD1,690.68 at the close on Friday.
However, oil prices took another leg lower.
WTI crude was priced at USD10.66 at the London equities close, trading around its worst levels since 1986, and down sharply from USD18.41 late Friday.
The fall comes as oil prices have been pummelled in recent weeks by demand fears due to Covid-19 and a Saudi-led price war. The move was also technically driven as investors closed out their positions ahead of the May contract expiry Monday.
"The WTI June contract has endured a large loss today, but its declines are small when compared with the May contract. We might see some normality return to the WTI market once the May contract has expired," commented David Madden at CMC Markets.
Brent oil fell to USD26.22 a barrel at the London equities close Monday from USD28.21 late Friday.
London-listed oil stocks closed lower. BP shares ended down 0.8% while Royal Dutch Shell A and B stock closed 1.0% and 0.3% lower respectively.
Another group finishing in the red were housebuilders, with Barratt Developments closing down 4.9%, Taylor Wimpey down 4.1% and Persimmon down 1.9%.
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.
Standard Chartered closed down 2.2%. The emerging markets-focused lender and partner PT Astra International have agreed with Bangkok Bank Public to amend the sale price of their combined 89.1% stake in PT Bank Permata.
Standard Chartered said the two partners have agreed to change the purchase price of the Indonesian bank to 1.63 times Permata's shareholders' equity as at March, from 1.77 times the equity as at the same date, provided the sale closes before the end of June. The amendment brings the total amount payable to Standard Chartered for its 44% stake down to IDR17 trillion - around USD1.06 billion.
In December, Standard Chartered said it would sell its stake for about USD1.3 billion in cash to the Thai commercial lender with the proceeds to be used to cover some of its expected USD500 million of restructuring charges over the next three years.
Elsewhere in London, Premier Foods ended up 25% as the Kipling cake maker 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".
DFS rallied 10% after the furniture retailer announced a planned equity raise amongst other measures to maintain liquidity amid the Covid-19 outbreak as it noted a jump in online sales.
The furniture retailer said it is planning an equity fundraise through the placing of up to 19.9% of its existing share capital. DFS stated that in addition to cutting costs and reducing its monthly cash outflow to less than GB14 million until the business fully reopens, it is in advanced stages of securing a debt facility of between GBP60 million to GBP70 million with its lenders to add to its existing GBP250 million bank facility.
Separately, the company said that from March 25 until April 17, online sales from its website shot up by 20% and its order banks grew to GBP192 million from GBP185 million.
In the UK corporate calendar for Tuesday, there are first quarter results from London Stock Exchange Group and gold miner Centamin. There are half-year results from Primark owner Associated British Foods and a trading statement from Jupiter Fund Management.
In the economic calendar, UK unemployment and wage data is out at 0700 BST on Tuesday and the German ZEW survey at 1000 BST.
By Lucy Heming; lucyheming@alliancenews.com
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