The FTSE 100 still sinks in the late afternoon

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The British benchmark ended Tuesday down 136 points, or 2.12%, to 6,335

  • FTSE 100 down 136 points
  • American indices are mainly down
  • IATA Warns Airlines Worst Year Ever

5:15 p.m .: FTSE 100 closes significantly lower

The FTSE 100 Index closed deep in the red as global markets gained strength as the harsh reality of the damage caused by the pandemic began to sink.

The UK benchmark for the largest British companies fell 136 points, or 2.12%, to 6,335. The FTSE 250 also staggered to the close, plunging 381 points to 17,755.

“Yesterday, the World Bank predicted that the world economy would contract by 5.2% in 2020, which would be the largest contraction since the Second World War,” noted analyst David Madden at CMC Markets.

In addition, the fact that so many countries have suffered means that the magnitude of the slowdown is worse than any recession in 150 years, the World Bank also added on Monday.

Madden suggested that the stock brokers ignored the “terrible economic indicators that were released recently because they focused only on reopening the economies, but now it looks like they are facing the harsh reality of the situation.”

Sales in London were wide, with mining, oil, banking, air, hotel and house building stocks all heading south.

(LON: MGGT), the engineering titan, was Footsie’s biggest laggard, losing nearly 8% to 329p.

3:35 p.m .: FTSE 100 in the doldrums

Approaching the final hour of Tuesday’s session, the FTSE 100 failed to make much progress and was down 141 points to 6,330 at 3:35 p.m.

The benchmark is followed by the US markets, which are also in a red sea as the optimism carried over from last week’s employment report finally seems to have dissipated and traders seem satisfied to wait the outcome of the Fed meeting on Wednesday.

Sentiment should also have been shaken by sharp drops in trade from France, Germany and the rest of the eurozone, while gloomy forecasts for the IATA air sector probably didn’t help matters. .

The engineering group (), which was down 7.6% to 330.4p at the end of the afternoon, led the packers of the FTSE 100, while the industrial software group AVEVA Group PLC () , at the top of the list, jumped 4.6%. at 4.203p after a 97% increase in full-year profits.

2:40 p.m .: Wall Street opens lower

US markets opened in negative territory as investor enthusiasm continued to retreat from Monday’s highs.

Shortly after the opening bell, the Dow Jones Industrial Average fell 1.28% to 27,218, while the S&P 500 slipped 1.08% to 3,197 and the Nasdaq fell 0, 6% to 9,865.

Wall Street is unlikely to set new records as traders appear to have begun to question market wisdom, as optimism appears to have strayed too far from the situation on the ground, particularly the pursuit of a global pandemic and social unrest around the world.

An indication of the economic damage caused by the coronavirus became clearer earlier today when the International Air Transport Association (IATA) warned that the airline industry could suffer the worst year in its history with expected losses for 2020 totaling 84 billion US dollars.

Investors could also seek to keep their powder dry before the Fed’s economic forecast expected after its meeting tomorrow.

Meanwhile, in London, the FTSE 100 was also firmly in the red, down 116 points to 6,356 shortly before 2:40 p.m.

12.55 p.m .: American indices decline

Investors have left an element of doubt hanging over a race that saw the Footsie return to pre-lockdown levels.

The London blue chip index fell 103 points (1.6%) to 6,370.

“All of this comes after a great session in Monday in the United States, in which the Nasdaq hit an all time high and the Dow Jones hit a 15 week high,” said Connor Campbell.

“These long and short term records, however, may well have inspired Tuesday’s losses. Investors could question the wisdom of such summits in a world still very firmly in the midst of a pandemic.

“The Dow Jones seems to have been infected with European concerns. Futures contracts have an index losing 300 points when trading starts in the United States, a drop that would return the Dow Jones below 27,300, “he added.

In the United Kingdom, the NFIB small business activity and sentiment index for May rose to 94.4 from 90.9 in April. The consensus forecast was for a reading of 92.5.

“The NFIB Small Business Jobs report released last Thursday clearly hinted at a rebound in the global index today, reporting a seven point hike in hiring plans. The comprehensive report released today also shows that sales expectations jumped 18 points – due to the reopening – and economic expectations rose five points, “said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“However, profit expectations have dropped, perhaps suggesting that business owners recognize that all of the lost land will not be recovered. Elsewhere, investment plans increased by two points and selling prices increased by four points, although this is likely due mainly to the rebound in gasoline prices. All figures remain depressed, however, with the exception of the economic expectations component, which is most sensitive to the short-term performance of the stock market, “he added.

11.40 am: Prospects of dark jobs

Classify under “Things we probably didn’t need to be informed”. An employment survey of a recruiting company indicates that the employment outlook is very dismal.

The survey found that businesses in all major sectors of the economy are more likely to cut jobs than hire people in the next three months, from July to September.

The net employment outlook figure, calculated simply by subtracting the number of employers per 100 who seek to downsize from the number per 100 seeking to recruit, fell to -12.

This is the weakest forecast since the start of the survey in 1992.

“The level of disruption is unprecedented and many will take a close look at what will happen next with the way COVID-19 progresses, how consumers react and what it all means for their own operations,” said Mark Cahill, Managing Director of the UK Group.

Meanwhile, on the stock market, the FTSE 100 ended the morning side shuffle. The index was down 115 points (1.8%) to 6,358.

10:20 a.m .: Oil majors add to Footsie’s woes as Brent crude prices drop

The leading London stocks index posted a triple-digit loss despite the loss of nearly a cent of the pound against the dollar on the foreign exchange markets.

The FTSE 100 was down 111 points (1.7%) to 6,382, with the heavily weighted tankers adding to the misfortune, the price of Brent crude slipping to 39.97 USD per barrel on the futures market against 40.80 USD per night.

() was down 5.1% to 1,388p while () was down 2.4% to 357.15p.

Software company AVEVA Group PLC (), which derives around 40% of its revenues from the oil and gas industry, defied the trend with a 4.6% increase to 4,203p after its annual results.

Adjusted underlying profit (EBIT) jumped 23.3% to 216.8 mln from 1,754.9 mln the previous year.

9:20 am: “Less terrible” retail sales in May

“About turn,” was the order this morning, with the Footsie driven down mainly by companies that have led it recently.

The index for major London stocks fell 43 points (0.7%) to 6,429, the owner of British Airways, International Consolidated Airlines (), having lost the most, down 6.5% to 309, 9p.

Retailers held up relatively well after data from the British Retail Consortium (BRC).

BRC member survey found that the value of retail sales at High Street retailers fell 5.9% year over year in May, the second most significant decline marked since the start of the survey, but was a big improvement on the 19.9% ​​drop in April.

“May sales demonstrated another month of struggle for retailers across the country, despite an improvement from the previous month. However, as the sun rose and restaurants slept, food sales increased, with consumers going to their local parks for beers, barbecues and picnics. Sales of clothing and beauty products improved slightly in April when people left their homes to meet friends and family outside, “said Helen Dickinson, CEO of BRC.

“Continuing the lock-in trend, office supplies, fitness equipment and bikes all performed well, thanks to strong online sales, and DIY was boosted by the opening of garden centers; however, for the stores whose doors remain closed, it was once again a difficult month and even those which remained open suffered a reduction in attendance and enormous costs to implement measures of social distancing ”, a- she added.

Bike vendor Halfords PLC () got no boost from BRC’s comment on booming bike sales – stocks fell 1.4% to 182.4p – and likewise, the retailer DIY () down 3.5% to 203.5p, felt no benefit from the reports. the smell of burnt meat in British gardens, probably because traders had spotted these trends some time ago.

8:40 a.m .: Profit takers move in

Traders seemingly neglected to read the script with the opening of the FTSE 100 on Tuesday, despite a bumper close to Wall Street procedures overnight, as the US markets have now recovered almost all of their losses since the February collapse.

The British large cap index opened 24 points to 6,449.02, however, canceling out some of its recent rally.

Here in the UK, irrational exuberance has been replaced by circumspection, with the top notch British index looking stalled around 6,500, more than 1,000 points lower than its peak of the year.

The euro area GDP figures later may offer a guide, but not a definitive reading on how the nearby continent fared during the coronavirus lockdown – and may explain the caution.

In the market, travel values ​​continued to bubble in positive territory, buoyed by the hope that restrictions on international movement could be lifted further.

Cruise ship Carnival () rose to the top of the Footsie riser list with a gain of 9%. British Airways owner IAG () increased 3.3%.

British American Tobacco (LON: BAT) fell 3% after tighter than expected closings in some of its main Latin American territories, resulting in a mini-profit alert.

But as Interactive Investor equity guru Richard Hunter pointed out: “The road ahead can be strewn with obstacles, but BATS’s historic resilience will likely give the company a chance to fight to maintain its prominent position.

“Providing advice and confirming dividend aspirations is increasingly rare in today’s environment, but in a refreshing change, BATS has produced both.”

Proactive news headlines:

() expanded its footprint by acquiring areas off the coast of Uruguay. The company said it had obtained the OFF-1 license, which is estimated to host 1 billion barrels of oil-equivalent potential. Specifically, the company noted the presence of several exploration areas in relatively shallow waters through the new permit, which covers some 15,000 square kilometers.

PLC () provided an update on the development of a coronavirus test (COVID-19) by its owned company, Paraytec Limited, in partnership with the University of Sheffield. Listed company AIM said that the requisite affinity macromolecule, an aptamer that binds to the SPIKE glycoprotein on the surface of the virus, has now been successfully synthesized and supplied to Paraytec. The aptamer is designed to trap the virus on the test service so that it can be covered with a fluorescent module that allows detection.

() said it raised £ 500,000 via a share at 0.12p per share, a modest discount from Monday’s closing price. Paniolo Ventures Inc, a Canadian investment fund, bought the fundraiser, which bought £ 250,000 of shares and now owns 5.55% of the broad base of Blue Star. Current investor Nicholas Slater increased his stake to 13.41% from 10.72% after buying shares worth £ 175,000.

PLC () revealed to have generated a turnover of 42 million pounds sterling during the five months ending at the end of May 2020. This represents 84% ​​of the turnover recorded for the same period in 2019 at constant scope, adjusted subsequent acquisitions. Comparing the monthly pro forma performance to the previous year, the group’s turnover was 60% in April and rose to 98% in May. Each platform within the group, and the group itself, has recorded positive EBITDA for each month this year, the group said in an update on exchanges.

() sees activity levels in its auto financing and home bridging activities return to normal levels as the foreclosure of the coronavirus pandemic (COVID-19) eases. In a statement released prior to the company’s virtual annual general meeting, company president Anthony Coombs promised that the company’s conservative management style, strong cash position and client relationships will “pay now.” dividends, both literally and figuratively ”.

() stated that it had been informed that Mark Learmonth, a director of the company, had sold 10,000 depositary interests in common shares of the company at a price of 12.025p each. He noted that Learmonth now owns 139,775 custodian interests, which represents an approximate 1.2% stake in the company’s share capital.

(), a leading provider of oil and gas drilling and production services in the Middle East and North Africa (MENA), has announced that it will release its first quarter 2020 trade update June 11, 2020, through which the group will update the market on its main financial and operational highlights for the first three months ending March 31, 2020.

(), a mineral exploration and development company, has announced that it will host a webinar presentation and a question and answer session which will be posted online on Tuesday, June 23 at 3:00 p.m. GMT. The presentation will be made by Bill Brodie Good, CTO of Alien Metals, who will brief shareholders and stakeholders on the company’s current exploration programs. All investor questions should be submitted via [email protected] by Monday, June 15, 2020, so they can be integrated into the question and answer session. Those wishing to participate will be able to access the webinar shortly before 3 p.m. on Tuesday, June 23 via the following link: https://www.bigmarker.com/share-talk/Alien-Metals-PLC-Investor-Presentation-and-Q-A-Session

Limited () announced that effective today, its head office has changed to PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT.

6:25 am: Footsie ready to play follows the leader

The FTSE 100 is expected to climb higher on Tuesday after strong overnight gains on Wall Street as concerns over the coronavirus pandemic (COVID-19) subside further.

The London blue chips were called 38 points more by traders at CMC Markets, after dropping almost 12 points or 0.2% to 6,472.59 the previous day.

US stocks had an exceptional session earlier this week, outperforming their European counterparts, as the Federal Reserve gave more encouraging signals.

The Dow Jones Industrials Average added 461 points or 1.7% to close at 27,572.44, while the broader S&P 500 climbed 1.2% and the tech-loaded Nasdaq Composite rose 1 , 1%.

The S&P is now less than 1% below where it started the year and the Nasdaq is 9% higher, while the blue-blooded Dow continues to lag, still down more than 4%.

The encouragement from the Fed took the form of expanding its mainstreet loan program, allowing more small and medium-sized businesses to access support.

“It should scream to everyone that the Fed won’t be surprised when it announces its latest rate decision tomorrow night,” said Jeffrey Halley, market analyst at Oanda.

“This should mean that there will be no surprise in derailing the rally from buying everything after COVID-19, which is still in full swing. The rebound in stocks was not built on a V-shaped recovery in the world economy … It was rather built on the almost unlimited amounts of unconventional easing from the world’s central banks in its innumerable forms. And, it appears in the case of the Fed in particular, a determination to support the losses of investors, however stupid or greedy they may be. ”

Investors in Britain will wake up by showering with new results and updates, including the cigarette manufacturer’s first quarter figures ().

The demand for tobacco products tends to be unaffected by macroeconomic conditions and, so far, the coronavirus pandemic has not had much impact on the operations of the FTSE 100 group.

BAT has guided revenue growth this year in the lower part of its medium-term range of 3% to 5%, so shareholders are likely to monitor any potential change in this forecast, as well as the dividend.

Emphasis will also be placed on the housing construction sector, with a trade statement expected from ().

Last week’s house price data indicated lower prices and these updates will provide more details on the restart of activity after the foreclosure, including sales volumes and prices.

In late April, Bellway announced that it would gradually reopen construction sites under new guidelines for social distancing from coronaviruses, starting with properties in the late stages of construction.

Around the markets:

  • Pound: down 0.1% to US $ 1.2711
  • Oil: + 0.2% to US41.03
  • Gold: down 1% to US $ 1,692

Important events expected on Tuesday:

Trading updates: (), ()

Finals: AVEVA Group PLC (), PLC (), (), PLC (), (), Ltd ()

City titles:

FT

  • Hong Kong hedge funds plan to exit the market as national security law looms – the city’s status as the top Asian destination for industry talent is at stake
  • The majority of the British government wants to reduce social distancing by 2 million – Boris Johnson supports calls for a softening of the rule to boost the economy.
  • “Glimmer of hope” in UK retail and consumer spending in May – the drop is much less severe than in April, but it is the second largest contraction in more than 25 years.

The temperature

  • The Nasdaq closed at an all-time high last night, becoming the first of the major Wall Street indices to confirm a new bull market. Remarkably, it did so only 16 weeks after the lockouts brought down the stock markets and pushed the US economy into recession.
  • Cracks begin to appear in nuclear generators – pressure increases on aging British reactors as problems begin to appear.
  • The co-founder of, acquired for the first time a majority stake in the frozen products trade since its creation 50 years ago.

Telegraph

  • One in six companies is expected to downsize – a “rapid increase” in the number of workers made redundant or on leave, warns chief economist Andy Haldane.
  • The scrappage scheme may not stimulate British automakers – restricting incentives for fully electric cars means jobs in the UK will not be protected as few models are still produced in British factories.
  • Coronavirus “to plunge almost all countries into recession” – the world economy is facing its biggest crash since World War II, with a recession three times more severe than the financial crisis.

Guardian

  • The United States is officially in recession, ending the longest economic expansion in US history, the committee calling for recession announced on Monday.
  • British households are expected to accumulate a combined debt of £ 6 billion due to the coronavirus crisis, as millions of people fall behind on credit card payments, municipal taxes and utility bills public.
  • British retailers suffered a second consecutive drop in monthly sales in May as the coronavirus shutdown wreaked havoc on the main street.



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