(Alliance News) - Stock prices in London are seen opening higher on Tuesday after the long Easter weekend in the UK and Europe, following upbeat trading in Asian equity markets as the Covid-19 death toll appeared to slow.
In early UK company news, transport operator National Express said it has suffered a "significant decline" in revenue as a result of the coronavirus outbreak and withdrew its dividend. Also joining the queue of London listings pulling dividends in response to the pandemic were gold miner Hochschild Mining and defence contractor Ultra Electronics.
IG futures indicate the FTSE 100 index is to open 98.04 points higher at 5,940.70. The blue-chip index closed up 164.93 points, or 2.9%, at 5,842.66 on Thursday.
Ultra Electronics Holdings said trading in the first quarter of 2020 was broadly in line with expectations with a good underlying order book, revenue, profit and cash performance.
Ultra said demand in defence markets and most of its critical detection and control markets remains robust.
The defence company said it has developed a response plan with actions to mitigate any possible profitability, liquidity and cash flow challenges that may arise from Covid-19. However, the company has not seen any deterioration in trading so far.
Still, Ultra said it is mindful of the uncertainty as to the duration of further disruption from Covid-19 and as a precautionary measure the board has decided to withdraw its previous proposal to pay a final 2019 dividend of 39.2 pence per share.
Based on the board's current knowledge, Ultra said, it intends to pay an additional interim dividend of the same amount in the second half of 2020. The board will keep this under review as the pandemic unfolds, the company added.
National Express said that, before the coronavirus outbreak, the first two months of 2020 delivered significant year-on-year revenue growth of 17%. However, since then the transport company has seen a decline in revenue as services have been withdrawn.
National Express has temporarily suspended all National Express coach services in the face of the coronavirus pandemic.
Nonetheless, the company said overall revenue for the period to March 31, was still up 8.9% year-on-year in constant currency and 9.4% on a reported basis.
However, National Express said that in light of Covid-19, the board is withdrawing its recommendation for a final dividend.
Hochschild Mining said that due to the ongoing uncertainty and the continued suspension of some of its operations, it has decided to withdraw its proposal to pay a final dividend for 2019.
The gold miner said this was a prudent course of action reflecting its focus on the conservation of cash resources, and it will review the decision once the situation becomes clearer. Hochschild said it had USD166 million in cash on December 31, with USD33 million debt.
Hochschild said both of its mines in Peru - Inmaculada and Pallancata - remain closed after that country extended its Covid-19 lockdown until April 26. In Argentina, the San Jose mine has been allowed to reopen but will need to ramp-up production over the coming weeks due to the effect of travel restrictions on workers.
Centrica confirmed it has appointed Interim Chief Executive Chris O'Shea as CEO on a permanent basis, effective immediately. O'Shea became interim CEO in March, having been chief financial officer since late 2018. The search for a new CFO is underway, the British Gas-owner added.
Coronavirus deaths in the hard-hit US were flat for a second consecutive day, with New York's governor saying the "worst is over" as many countries weigh a gradual reopening of their shattered economies.
In New York, where the virus has killed more than 10,000 people and seen unclaimed victims buried in unmarked mass graves, Governor Andrew Cuomo said the nightmare might be coming to an end for the city.
As countries reach different stages of the coronavirus curve, debate is raging over whether to return to normal life and possibly risk a second wave of infections.
Italy will reopen some bookshops and laundries on a trial basis Tuesday, as its number of critically ill patients dropped for the tenth straight day despite the total death toll topping 20,000.
The Japanese Nikkei 225 index closed up 3.3%. In China, the Shanghai Composite is up 1.1%, while the Hang Seng index in Hong Kong is up 0.7%.
China's foreign trade fell again in March even as businesses returned to work after the coronavirus outbreak, with the global pandemic weighing on the manufacturing powerhouse's outlook.
Exports fell 6.6% in March from a year earlier and imports dropped 0.9%, according to customs data released Tuesday.
The contraction was less than a Bloomberg economist forecast that predicted a 10% or more decline in both figures, and well short of the 17% plunge in exports seen in the first two months of the year.
CMC Markets analyst Michael Hewson said: "While markets have taken the view that the numbers were better than expectations, it doesn't change the fact that the declines still point to a sharp decline in this week's China first-quarter GDP numbers, which are expected to show a sharp contraction in the Chinese economy.
"Nonetheless, Asia markets have reacted positively to the data, as well as the improvements in the death rates across Europe, and we look set for a strongly positive start for European markets when they reopen later this morning."
The pound was quoted at USD1.2562 Tuesday morning, up from USD1.2455 at the London equities close Thursday.
The UK government has insisted its plan to tackle the coronavirus pandemic "is working" but warned the nationwide lockdown will not be lifted this week.
Foreign Secretary Dominic Raab on Monday showed some cautious optimism as he revealed the latest data suggested the UK was "starting to win this struggle", three weeks after restrictions were imposed.
The euro was quoted at USD1.0940, flat from USD1.0942 late Thursday. Against the yen, the dollar was quoted at JPY107.71, down from JPY108.50.
Brent oil was quoted at USD31.86 a barrel early Tuesday, down from USD33.18 late Thursday.
Top global oil producers are considering slashing output by 20 million barrels a day under the terms of a deal to boost prices, US President Donald Trump said on Monday.
Trump's remarks came after OPEC producers and their allies agreed on Sunday to cut production by 9.7 million barrels a day, which some analysts feared would be too little to stem the damage from the combination of plunging demand amid the coronavirus pandemic and a price war between Russia and Saudi Arabia.
"People are saying 10 million but we think the number they will actually hit is going to be closer to 20 million barrels a day," Trump said at a press briefing about the coronavirus, referring to how much oil production would be cut.
Gold was quoted at USD1,715.14 an ounce, up sharply from USD1,677.77.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Hochschild (HOC)
Centrica (CNA)