LONDON MARKET CLOSE: FTSE 100 Ends Higher In Another Rocky Session

(Alliance News) - In another volatile session, the FTSE 100 managed to end Tuesday higher as the latest stimulus measure from the US Federal Reserve appeared to soothe markets.

"Just as investors were starting to seriously flag once again, the Fed actually managed to pull-off a market-boosting intervention after a string of false dawns," said Connor Campbell at Spreadex.

"The central bank announced on Tuesday that it would be launching a Commercial Paper Funding Facility, ie a way for it to buy up short-term debt issued by struggling companies seeking to raise cash," said Campbell.

"It seems that, after being sceptical of the Fed's rate cuts and trillion-dollar stimulus injections, the creation of this new special credit facility was the kind of thing investors were hoping for."

The FTSE 100 index closed up 143.82 points, or 2.8%, at 5,294.90, rebounding in the afternoon after trading below 5,000 earlier in Tuesday's session.

The FTSE 250 ended down 424.87 points, or 3.0%, at 13,924.88, and the AIM All-Share closed down 37.66 points, or 5.7%, at 625.74.

The Cboe UK 100 ended up 3.1% at 8,934.67, the Cboe UK 250 closed down 3.4% at 12,055.70, and the Cboe Small Companies ended down 7.4% at 8,063.82.

In European equities on Tuesday, the CAC 40 in Paris ended up 2.8%, while the DAX 30 in Frankfurt ended up 2.3%.

The Fed unveiled a new credit facility to help households and business stay afloat as the coronavirus pandemic threatens to undermine the world's largest economy.

The program, authorised by the US Treasury, is aimed at commercial paper, which finances things like auto loans and home mortgages, a market that "has been under considerable strain in recent days as businesses and households face greater uncertainty in light of the coronavirus outbreak".

"By ensuring the smooth functioning of this market, particularly in times of strain, the Federal Reserve is providing credit that will support families, businesses, and jobs across the economy," the Fed said in a statement.

Stocks in New York were in the green at the London equities close, with the DJIA up 3.1%, the S&P 500 index up 4.3%, and the Nasdaq Composite up 4.4%.

"Another major beneficiary of the Fed's move was the dollar. The greenback went on a tear once the CPFF was revealed," said Spreadex's Campbell.

The euro stood at USD1.0974 at the European close, against USD1.1149 at the same time on Monday. Against the yen, the dollar was trading at JPY107.44, higher compared to JPY105.85 late Monday.

The pound was quoted at USD1.2057, lower compared to USD1.2271.

In UK data on Tuesday, the unemployment rate unexpectedly increased in the three months to January from historic lows.

In the three months to January, the UK unemployment rate rose to 3.9% from 3.8% in the three months to December. Market consensus, cited by FXStreet, predicted the reading to remain at the 1975 historic low of 3.8%.

However, the ONS said total employment in the UK rose to a record high of 32.99 million during the three-month period.

In commodities, Brent oil was quoted at USD29.72 a barrel Tuesday from USD29.99 late Monday. Gold was quoted at USD1,527.67 an ounce against USD1,508.34.

Leading the gainers in the FTSE 100 was Antofagasta, ending up 16%.

In 2019, Antofagasta's revenue climbed 4.9% to USD4.97 billion. Pretax profit rose 7.7% to USD1.35 billion.

Boosting earnings was a 7.6% rise in copper sales volumes to 772,200 tonnes. The average realised copper price fell 2.1% to USD2.75 per pound.

Also higher were blue-chip grocers, with online retailer Ocado ending up 10%, J Sainsbury up 6.7% and Tesco up 4.3%.

Supermarket websites and online grocers such as Ocado have been seeing surges in orders, with some key items being rationed per customer. Supermarket shelves have been emptied of essential items such as toilet rolls, cleaning products, dried pasta and tinned food after Covid-19 was classified as a pandemic.

Shares in Just Eat Takeaway.com ended up 11%.

Meanwhile, leisure firms slumped after the UK government on Monday advised people to stay away from pubs, clubs and theatres and to avoid all non-essential contacts and travel to stem the Covid-19 outbreak.

Cineworld shares ended down 43%, and pub operator JD Wetherspoon down 7.5%.

UK Chancellor Rishi Sunak will set out a new package of support on Tuesday afternoon for businesses hit by the outbreak.

Compass managed to quell some of its losses, ending down just 6.6% - having traded more than 20% lower earlier in the session - after warning of a hit from Covid-19.

The contract caterer said the majority of its Sports & Leisure and Education businesses in Europe and North America have been closed due to government restrictions, with its Business & Industry volumes being "severely" hurt.

Compass said revenue growth in its half-year to March 31 is now expected to be between zero and 2%, with operating profit expected to be between GBP125 million to GBP225 million lower than previously expected.

ITV shares closed down 13% despite the broadcaster saying there will be no loss of sponsorship revenue due to the postponement of the European Football Championships.

UEFA earlier Tuesday confirmed the Euro 2020 tournament will be pushed back to the summer of 2021 due to the Covid-19 outbreak.

"We look forward to broadcasting the Euros and providing a significant marketing opportunity for advertisers in 2021, a year which does not have any other large sports tournament," said ITV.

"ITV continues to closely monitor the implications of the coronavirus and will update the market further as appropriate. Our priority remains to protect our people. Currently, ITV's guidance for March and April advertising revenue has not changed."

In the FTSE 250, Dixons Carphone closed up 11% after the electronics retailer said it will close all of its UK standalone Carphone Warehouse stores - 531 shops representing 8% of its total UK selling space.

The company said mobile phones are to be sold through Carphone Warehouse sections of Currys PCWorld electrical shops.

Dixons Carphone expects 2,900 redundancies as the businesses are combined. It said the 70 Carphone Warehouse stores in the Republic of Ireland aren't affected, nor are international operations.

In the corporate calendar on Wednesday, there are full-year results from grocer Wm Morrison Supermarkets, iron ore pellet producer Ferrexpo, automotive retailer Pendragon and advertising and marketing firm S4 Capital.

In the economic calendar for Wednesday, there is eurozone inflation at 1000 GMT.

By Lucy Heming; lucyheming@alliancenews.com

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