(Alliance News) - Stocks in London started the week on a positive note, with US President Donald Trump's executive decision boosted hopes of a US stimulus package.
Trump signed four executive orders over the weekend to defer payroll taxes, impose a moratorium on evictions, and provide USD400 in weekly unemployment benefits, to be partially paid by states, to replace the USD600 weekly payments that expired at the end of July.
Democratic House Speaker Nancy Pelosi met several times last week with Treasury Secretary Steven Mnuchin to try to reach a compromise deal on a new aid package.
However, Mnuchin called the Democratic proposal for aid to state and local governments "absurd," although he said Monday on CNBC that "there's a deal to do if the Democrats are reasonable and want to compromise."
The UK flagship FTSE 100 index closed up 18.41 points, or 0.3%, at 6,050.59. The mid-cap FTSE 250 index added 102.01 points, or 0.6%, to finish at 17,724.94. The AIM All-Share index closed up 0.6% at 938.28.
The Cboe UK 100 index ended up 0.5% at 602.62. The Cboe 250 closed 0.8% higher at 15,101.58, and the Cboe Small Companies closed up 0.9% at 9,343.94.
In mainland Europe, the CAC 40 in Paris advanced 0.4%, while the DAX 30 in Frankfurt ended up 0.1%.
"The signing by President Trump of a number of executive orders to mitigate the loss of the USD600 enhanced unemployment benefit, appears to have introduced an element of comfort to markets who believe rightly, or wrongly that there will be a longer term agreement in the coming weeks. In short, the President's executive actions appear to be being interpreted as a starting point for a possible deal in the coming days," CMC Markets Chief Market Analyst Michael Hewson commented.
He continued: "European markets have undergone a fairly subdued session today, with gains constrained by today's decision by Chinese authorities to retaliate on the US decision to sanction its Hong Kong officials, by implementing sanctions of its own against US senators Marco Rubio and Ted Cruz amongst others.
"It could well be that the decision by Chinese authorities to limit their retaliation to the senior Republican senators, and not senior administration officials is limiting any damage to risk in the short term."
I'n the FTSE 100, oil majors BP, Royal Dutch Shell 'A' and 'B' shares were up 2.8%, 1.8% and 1.3%, respectively, after Saudi Aramco said it sees signs of oil market recovery.
Brent oil was quoted at USD44.84 a barrel at the London equities close Monday, up from USD44.60 at the close Friday.
Saudi Aramco said on Sunday its second-quarter profits plunged 73% due to sharply lower oil prices, as the coronavirus crisis undercuts global demand.
The Saudi Arabian firm, recently dethroned by Apple as the world's most valuable listed company, posted a net profit of USD6.6 billion for the three months to June 30, down from USD24.7 billion for the same period of 2019.
The results are in line with analysts' expectations and stand in contrast to the losses reported by its rival energy giants, which are reeling from a drop in oil demand since the start of the novel coronavirus pandemic.
Aramco's results reflected its "financial resilience", Chief Executive Amin Nasser said, as the company presses ahead with a plan to pay USD75 billion in dividends this year.
Nasser also voiced optimism over what he called a "partial recovery in the energy market" amid an easing of virus restrictions in some countries.
In the FTSE 250, Cineworld shares jumped sharply, adding 18%, after a US judge overturned the rules that dictated the release of how films are released in the US.
"Since the 1950's Hollywood had a monopoly on how films could be produced, exhibited and distributed. These rules allowed the Hollywood studios to limit the number of films local cinemas could show in any geographic area. The ending of this rule now allows US cinemas much more flexibility on the types of films they can show, and where they show them," Madden commented.
Clarkson added 12% after the shipping services provider company said it saw a robust first-half performance in 2020, despite the "unprecedented challenges" faced by the shipping industry.
For the half-year ended June 30, revenue was up 7.5% at GBP180.4 million from GBP167.8 million the year before, and pretax profit was up 9.0% at GBP20.9 million from GBP19.2 million. The shipping services provider said it has a robust balance sheet, with GBP88.8 million of free cash resources.
In light of the strong cash position, Clarkson has decided to pay the equivalent of the deferred 2019 final dividend of 53 pence per share as an interim dividend. The company also declared a further interim dividend for 2020 of 25p per share, unchanged from last year.
FirstGroup and Go-Ahead Group closed up 5.7% and 10% respectively after both transport firms noted the UK Department of Transport's announcement for a funding round of GBP218.4 million on Saturday.
The funding package - which is under the Covid-19 Bus Service Support Grant Restart - will last for eight weeks, after which weekly funding of up to GBP27.3 million will be made available "until a time when the funding is no longer needed".
In addition, the UK government has announced plans to publish a National Bus Strategy, setting out plans for supporting continued bus services across the country. The government is also looking for ways that ensure that the bus sector can operate independently and become viable.
FirstGroup said the funding programme has already helped to improve bus service capacity, with First Bus operations across England having increased operated mileage to 90% of pre-pandemic levels from 40%, while passenger volumes have increased to 40% from 10% of normal levels since the low point in March.
Peer Stagecoach also rose on the news, closing up 11%.
Petropavlovsk gave back 3.2% after resolutions ousting its chair and chief executive passed at a requisitioned general meeting, along with a resolution requiring it to arrange for an independent forensic investigation.
The successful resolution to remove all directors appointed since July 9 was proposed by Prosperity Capital Management. Prosperity's other resolutions, to re-appoint Damien Hackett and Harry Kenyon-Slaney, as well as to appoint Vitaliy Zarkhin, failed.
Everest Alliance, a 5% shareholder, proposed the appointment of Michael Kavanagh to the board, which was approved, but the passing of the Prosperity director removal resolution means FTSE 250-listed Russia-focused gold miner Petropavlovsk must remove him as a director.
The forensic investigation, which will cover related party transactions for the three years prior to the requisitioned meeting, was also proposed by Everest Alliance.
Stocks in New York were mixed at the London equities close against a backdrop of heightened tensions between the US and China, with the DJIA up 0.8%, but the S&P 500 index was down 0.1%, and the Nasdaq Composite was down 0.9%.
In the latest developments, China has sanctioned 11 Americans, including senators Marco Rubio and Ted Cruz, in retaliation for similar US moves against Chinese officials over Beijing's crackdown in Hong Kong.
Washington had announced on Friday it was freezing the US assets of Hong Kong Chief Executive Carrie Lam and 10 other senior Chinese officials, in the toughest US action on Hong Kong since China imposed a sweeping new security law on the territory.
The pound was quoted at USD1.3083 at Monday evening, up from USD1.3050 at the London equities close Friday.
The euro stood at USD1.1761 at the close, lower from USD1.1789 at the European equities close Friday. Against the yen, the dollar was trading at JPY105.81, soft from JPY105.86 late Friday.
Gold was quoted at USD2,033.00 an ounce at the close, slightly higher from USD2,032.40 late Friday.
The rebound in the dollar on Friday and today has taken the shine off gold, Oanda's Craig Erlam said.
He continued: "A test of USD2,000 would be very interesting, with it being a key psychology support for the yellow metal. A break could exacerbate any move to the downside and see USD1,980 support quickly put to the test. That could all depend on the dollar which is forming a double bottom of its own. A break above last Monday's peak could trigger a bullish corrective move in the dollar, back towards the June/early July support zone and put considerable pressure on gold prices."
The economic calendar on Tuesday, there is UK retail sales data for July scheduled overnight, then at 0930 BST there is the ILO unemployment rate. At 1030 BST, there is ZEW economic sentiment data for Germany and the eurozone. In the afternoon, there is a US producer price index print at 1330 BST.
In a busy UK corporate calendar on Tuesday, blue chip Asia-focused life insurer Prudential will put out half year results, along with midcap pizza franchiser Domino's Pizza, oilfield services firm Petrofac and contracts-for-difference firm Plus500. AA, Bellway and Card Factory are scheduled to issue trading statements.
By Paul McGowan; paulmcgowan@alliancenews.com
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