|CATEGORY: MARKET REPORT - MIDDAY
Mon 29 Jun 2020
LONDON (SHARECAST) - (Sharecast News) - London stocks had edged a little higher by midday on Monday despite growing concerns about rising coronavirus infections in the US.
The FTSE 100 was up 0.2% at 6,171.11.
In the US, Texas, Florida and Arizona have all reversed some of their reopening plans following a spike in new cases. Meanwhile, Leicester could be the first city in England to face a local lockdown after recording 658 new cases in the two weeks to 16 June, many of which are linked to outbreaks at food production plants.
Joshua Mahony, senior market analyst at IG, said the US is well and truly at the forefront of the second wave of infections, with the decision to release lockdown measures without truly driving down numbers in the first place providing a recipe for disaster.
"However, much how we are seeing Texas and Florida reverse their reopening in the face of surging Covid-cases, so the city of Leicester in the UK looks set to extend their lockdown by two weeks given the outbreak in the area. Unfortunately, this is likely to be the new norm until science can find a long-term solution to the virus, with localised lockdowns required in a bid to avoid another hugely damaging second nationwide closure. For traders, the question is whether these localised lockdowns are enough to spark another major sell-off."
On the upside, he noted that investors seem happy to jump aboard travel stocks such as TUI and easyJet ahead of a surge in European travel for the month ahead.
"With Johnson set to announce a host of countries within which UK travellers can visit without the need of a quarantine on return, we are seeing some optimism that demand could pick up as the government essentially provides the go-ahead for summer holiday plans," he said.
In equity markets, BP rallied as the oil giant agreed to sell its petrochemicals business to chemical company Ineos for $5bn.
IAG flew higher after British Airways reportedly reached a deal to cut 350 pilots and put another 300 in a pool for re-hire when needed.
Elsewhere, Energean surged after saying it had agreed to exclude Edison E&P's Norwegian subsidiary from its takeover deal, and cut capital expenditure guidance as oil companies wrestle with a slump in prices amid the coronavirus crisis. The deal, originally worth $750m, will now cost Energean a gross $284m after ditching Edison's Algerian assets in April. Capex guidance was cut to $760m - $780m from $840 million.
Drax shares also rose sharply amid speculation the temporary power provider could be a takeover target. The Mail on Sunday suggested Drax could be in early stage talks to be bought by an unnamed energy company. It noted chatter of a 340p a share bid price, valuing the group at £1.35bn.
On the downside, Carnival was weaker after saying it will pay a hefty 7.5% on top of interbank rates to borrow $2.8bn (£2.3bn) to shore up the embattled cruise operator's finances as the Covid-19 crisis casts doubts on its future.
FTSE 100 (UKX) 6,171.11 0.19%
FTSE 250 (MCX) 17,054.58 -0.34%
techMARK (TASX) 3,709.05 -0.04%
FTSE 100 - Risers
Kingfisher (KGF) 220.00p 2.47%
Berkeley Group Holdings (The) (BKG) 4,198.00p 2.27%
BP (BP.) 311.35p 2.22%
Standard Chartered (STAN) 431.40p 2.08%
AstraZeneca (AZN) 8,600.00p 1.70%
3i Group (III) 837.20p 1.68%
Polymetal International (POLY) 1,572.50p 1.48%
Ferguson (FERG) 6,450.00p 1.48%
Barclays (BARC) 112.24p 1.14%
Burberry Group (BRBY) 1,551.50p 1.11%
FTSE 100 - Fallers
GVC Holdings (GVC) 738.40p -3.30%
Ocado Group (OCDO) 1,966.00p -3.30%
Intermediate Capital Group (ICP) 1,277.00p -2.07%
Unilever (ULVR) 4,438.00p -1.79%
Informa (INF) 459.10p -1.71%
Land Securities Group (LAND) 545.20p -1.62%
Flutter Entertainment (FLTR) 10,880.00p -1.49%
Evraz (EVR) 285.70p -1.48%
Aveva Group (AVV) 4,071.00p -1.33%
JD Sports Fashion (JD.) 617.40p -1.31%
FTSE 250 - Risers
Energean (ENOG) 497.00p 12.06%
Drax Group (DRX) 240.00p 7.53%
Aston Martin Lagonda Global Holdings (AML) 54.50p 7.07%
Hammerson (HMSO) 86.94p 5.87%
ICG Enterprise Trust (ICGT) 770.00p 4.05%
Morgan Sindall Group (MGNS) 1,256.00p 3.80%
BlackRock Smaller Companies Trust (BRSC) 1,314.00p 3.63%
easyJet (EZJ) 672.40p 3.19%
Airtel Africa (AAF) 62.50p 2.80%
TUI AG Reg Shs (DI) (TUI) 371.80p 2.74%
FTSE 250 - Fallers
Cineworld Group (CINE) 59.04p -7.87%
Crest Nicholson Holdings (CRST) 204.20p -4.67%
Carnival (CCL) 924.60p -4.54%
William Hill (WMH) 117.30p -4.52%
Workspace Group (WKP) 656.00p -4.16%
Vietnam Enterprise Investments (DI) (VEIL) 418.00p -3.80%
PureTech Health (PRTC) 274.50p -3.68%
National Express Group (NEX) 189.80p -3.65%
Future (FUTR) 1,206.00p -3.52%
Provident Financial (PFG) 168.30p -3.50%