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London open: Stocks rise on US stimulus package

Wed, 25th Mar 2020 08:07

(Sharecast News) - London stocks rose in early trade on Wednesday as investors cheered news that White House and Senate leaders have agreed a $2 trillion package to help prop up the US economy during the coronavirus pandemic.
At 0840 GMT, the FTSE 100 was up 1.4% at 5,524.07.

Spreadex analyst Connor Campbell said: "Lacking the same intensity as Tuesday - which is fair; that session was the best since 2008 - the markets nevertheless continued to rebound on Wednesday as US politicians finally reached an agreement on a stimulus plan.

He said the package, which should be passed later in the day, "was exactly what investors were looking for after days of intransigence by both Republicans and Democrats".

"The only worry is, if the measures announced in the last few days - that is, the Fed's unlimited QE and this $2 trillion plan - don't create a sustained rebound, it is unclear what will. There are always the plans the G7 hinted at on Tuesday, though given the level of international co-operation required for that, who knows when they will materialise."

Investors were also mulling over the latest UK inflation data, which showed that consumer price inflation fell to 1.7% in February from 1.8% in January, in line with consensus expectations. However, core inflation rose to 1.7% from 1.6%, coming in above consensus expectations of 1.5%.

Ruth Gregory, senior UK economist at Capital Economics, said the decline in CPI inflation "is a small sign of things to come".

"We expect the effects of the coronavirus crisis to drag inflation below 1.0% in the months ahead."

On the corporate front, there was another string of Covid-19 updates, with dividend suspensions galore again.

Rentokil International said it was cancelling its dividend and cutting pay in an effort to conserve more than ?500m in cash to strengthen its finances against the Covid-19 crisis. The pest control and hygiene services company said it took the actions after the virus had a greater impact on its business in the past 10 days.

Housebuilder Bellway will postpone its interim dividend, it said, as it warned of a slowdown in demand due to the Covid-19 outbreak and subsequent government-ordered lockdown.

Fellow housebuilder Persimmon said it has begun the orderly shutdown of its construction sites and closed all of its sales sites, as it announced the cancellation of its dividend.

Construction and regeneration company Morgan Sindall withdrew its guidance and warned on profits as it said the pandemic was disrupting operations.

Airport food concession operator SSP cancelled its interim dividend, cut jobs and said it was in advanced talks with the UK government on a financial support package as European revenues slumped by 80% due to the coronavirus.

Market Movers

FTSE 100 (UKX) 5,524.07 1.43%
FTSE 250 (MCX) 14,564.39 2.76%
techMARK (TASX) 3,215.04 2.44%

FTSE 100 - Risers

Whitbread (WTB) 3,197.00p 18.85%
JD Sports Fashion (JD.) 508.00p 17.57%
Intermediate Capital Group (ICP) 894.50p 12.23%
Burberry Group (BRBY) 1,378.00p 10.24%
M&G (MNG) 152.50p 9.71%
Royal Bank of Scotland Group (RBS) 129.50p 7.69%
London Stock Exchange Group (LSE) 7,432.00p 7.68%
Centrica (CNA) 45.00p 7.35%
Smiths Group (SMIN) 1,086.00p 6.84%
Aveva Group (AVV) 3,520.00p 6.67%

FTSE 100 - Fallers

Rentokil Initial (RTO) 323.90p -12.55%
Halma (HLMA) 1,792.50p -2.74%
HSBC Holdings (HSBA) 503.60p -2.21%
Land Securities Group (LAND) 600.60p -1.99%
Ocado Group (OCDO) 1,227.50p -1.84%
Persimmon (PSN) 1,670.50p -1.24%
Royal Dutch Shell 'B' (RDSB) 1,298.00p -1.08%
BT Group (BT.A) 131.50p -0.99%
Royal Dutch Shell 'A' (RDSA) 1,347.20p -0.74%
Fresnillo (FRES) 722.00p -0.66%

FTSE 250 - Risers

Go-Ahead Group (GOG) 930.00p 18.47%
Aston Martin Lagonda Global Holdings (AML) 253.90p 17.33%
Marston's (MARS) 36.24p 17.13%
TBC Bank Group (TBCG) 899.00p 16.00%
Micro Focus International (MCRO) 402.90p 12.76%
4Imprint Group (FOUR) 1,695.00p 12.62%
Avast (AVST) 375.40p 11.53%
Virgin Money UK (VMUK) 65.02p 11.49%
National Express Group (NEX) 149.70p 11.47%
OneSavings Bank (OSB) 244.40p 11.19%

FTSE 250 - Fallers

Sirius Real Estate Ltd. (SRE) 56.60p -5.67%
XP Power Ltd. (DI) (XPP) 2,550.00p -4.85%
Hiscox Limited (DI) (HSX) 916.00p -3.48%
Bellway (BWY) 2,000.00p -3.43%
Impax Environmental Markets (IEM) 260.00p -3.35%
Biffa (BIFF) 221.00p -3.07%
Petropavlovsk (POG) 20.80p -3.03%
Crest Nicholson Holdings (CRST) 186.50p -3.02%
Hill & Smith Holdings (HILS) 1,045.00p -2.43%
Vistry Group (VTY) 604.50p -2.34%

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