(Alliance News) - Stocks in London ended mixed on Thursday as central banks across the world rolled out stimulus measures to help support their respective economies.
The FTSE 100 index closed up 71.03 points, or 1.4%, at 5,151.61.
The FTSE 250 ended down 178.49 points, or 1.4%, at 12,829.70, and the AIM All-Share closed flat at 589.90.
The Cboe UK 100 ended up 1.6% at 8,764.85.88, the Cboe UK 250 closed down 0.7% at 11,263.43, and the Cboe Small Companies ended down 3.6% at 7,373.62.
In Paris the CAC 40 ended up 2.7%, while the DAX 30 in Frankfurt ended up 2.0%.
"The FTSE 100 has recovered 5,100 and broken out north of near-term channel resistance to 5180 and notch a 2% gain. Near-term the upside looks capped at 5200, but this is a rally I like... It's starting to show glimpses of more stability. We seem to know now that the central banks - even the ECB - are ready to do whatever it takes. We know governments have woken up and will throw as much money at this as they can. Investors are starting to think they don't want to miss out on what could amount to being the greatest buying opportunity for a years," commented Markets.com analyst Neil Wilson.
In the FTSE 100, Auto Trader closed up 17%. The digital automotive retailer warned it will be loss-making in April after taking measures to help customers during Covid-19.
Auto Trader has decided on two measures: it will not be charging retail customers for advertising packages during April, and it will be allowing customers to defer March advertising costs by 30 days.
This will "clearly" have a financial impact, Auto Trader said, though it stressed it has been able to enact such measures due to its financial strength.
Auto Trader said it cannot give any guidance for its financial year ending March 2021, though results for financial 2020 will meet expectations. The action taking for customers will, however, lead to a operating loss of GBP6 million to GBP7 million in April.
Next closed up 7.8% after the clothing retailer reported a rise in full-year sales, helped by double-digit growth in its online unit.
Earlier in January, Next made a first interim payout of 57.5p per share, a 4.5% year-on-year rise. Pretax profit during the recent year rose 2.0% to GBP748.5 million from GBP733.6 million. Excluding IFRS 16, an accounting rule governing the financial treatment of leases, pretax profit edged 0.8% higher to GBP728.5 million from GBP722.9 million.
Turning to sales, online growth helped Next post a 3.3% rise to GBP4.36 billion from GBP4.22 billion. For the current financial year, sales up to the evening on March 17 were 30% lower year-on-year, with a 25% fall in Online, excluding overseas, and 46% in Retail.
Next, which carried a detailed "stress test" on the effect of the virus outbreak, warned that its full-year sales could fall by as much as 25%.
Conversely, Ocado Group closed down 3.0% after the online grocer said it has had to take a number of actions, including closing its website, as people turn to online shopping amid the Covid-19 pandemic.
In the 13 weeks to March 1, Ocado Retail, the online supermarket's joint venture with Marks & Spencer Group, delivered 10% retail revenue growth to GBP441.2 million, meeting expectations. Average orders per week rose 10% to 343,000 and the average order size was 0.3% higher at GBP110.24.
To cope with panic-buying for groceries, Ocado has had to take a number of measures including stopping registration for new customers, installing queueing on the website, and closing temporarily its mobile phone app.
The pound was quoted at USD1.1665 at the London equities close, down from USD1.1755 at the close Wednesday. Sterling fell to a fresh 35-year low of USD1.1471 in early trade, but staged a mild recovery in the wake of a surprise interest rate cut from the Bank of England.
The BoE on Thursday cut its base interest rate to 0.10% from 0.25% and raised its asset purchase programme by GBP200 million to a total of GBP645 billion. This is the bank's lowest rate since its creation in 1694.
The BoE cut the interest rate to 0.25% from 0.75% just last week.
The central bank said the spread of Covid-19 and measures being taken to contain the virus will result in an economic shock that could be "sharp and large, but should be temporary".
Analysts at the Share Centre said: "Of course this rate cut will do nothing in slowing the spread of the disease which is more dependent of the government's measures. It may also be little comfort for small businesses facing an Armageddon scenario and may do little to stop job losses racking up. However, the BoE's actions that are coordinated with government strategies to prevent job losses will do much to prevent a dire economic situation after the virus disappears. In this regard we need to see more action from the government to support the Bank of Englands effort, such as the discussions in the market along the lines of policies preventing firms from laying off employees."
The pound's woes were compounded by fears of a partial lockdown across London. Emergency legislation to tackle the coronavirus outbreak will be published in parliament after UK Prime Minister Boris Johnson announced the closure of schools and cancellation of exams.
The legislation will be presented as the Army prepares to help out in the crisis and London faces the prospect of greater restrictions, with the capital suffering a faster spread of Covid-19.
The euro stood at USD1.0710 at the European equities close, down from USD1.0840 late Thursday, with substantial stimulus measures from the European Central Bank appearing to have little effect on the single currency.
The ECB late Wednesday unexpectedly said it would spend EUR750 billion on "emergency" bond purchases, as it joined other central banks in stepping up efforts to contain the economic damage from the coronavirus.
The so-called Pandemic Emergency Purchase Programme comes just six days after the ECB unveiled another big stimulus package that had failed to calm nervous markets, piling pressure on the bank to open the financial floodgates.
The decision came after the bank's 25-member governing council held emergency talks by phone late into the evening, following criticism the bank wasn't doing enough to shore up the eurozone economy.
Meanwhile, economic sentiment in Germany fell sharply in March, to levels last seen in the 2008 financial crisis, numbers from the ZEW-Leibniz Centre for European Economic Research showed on Tuesday.
Against the yen, the dollar was trading at JPY110.06, down from JPY108.37 late Wednesday.
Stocks in New York were higher at the London equities close as the US Federal Reserve lent further support to the economy.
The DJIA was up up 0.3%, the S&P 500 index up 0.3% and the Nasdaq Composite up 2.0%.
US Federal Reserve on Thursday opened a facility to provide dollars to more central banks, including Brazil and Mexico.
Emerging markets have been particularly hard hit by an outflow of funds during the crisis that has shut down huge swaths of the global economy.
The Fed said the move aims to "lessen strains in global US dollar funding markets, thereby mitigating the effects of these strains on the supply of credit to households and businesses, both domestically and abroad."
The Fed will provide up to USD60 billion each to the central banks of Australia, Brazil, South Korea, Mexico, Singapore and Sweden, and USD30 billion each to Denmark, Norway and New Zealand. The facility, known as swap lines, will be in place for at least six months, allowing foreign central banks to exchange domestic currency for the greenback.
Brent oil was quoted at USD28.02 a barrel at the equities close from USD26.08 at the same time the prior day.
Gold was quoted at USD1,477.90 an ounce at the London equities close against USD1,491.90 late Wednesday.
The economic calendar on Friday has Germany producer prices at 0700 GMT.
The corporate calendar on Friday has interim results from pub chain JD Wetherspoon.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Ocado (OCDO)
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