19th May 2020 08:12
(Alliance News) - The UK unemployment rate edged lower in the three months to March, the Office for National Statistics said on Tuesday, but jobless claims jumped a month later.
The unemployment rate in the UK decreased to 3.9% in three months to March, as the lockdown in the UK came into effect, down from the three months to 4.0% in February. Market consensus estimates had expected the latest jobless rate to rise to 4.4%.
Average earnings growth including bonuses came in at 2.4% in the three months to March, down from 2.8% in the period leading up to February. Average earnings growth excluding bonuses slipped to 2.7% in March from 2.9% in February.
The ONS noted the jobs report was based on interviews that took place throughout the period from the start of January to the end of March. "Consequently, most interviews relate to the period prior to the implementation of coronavirus social distancing measures," it said.
Suggesting worse ahead, the number of people claiming jobless benefits jumped by 69% in April from March.
"The surge in people submitting benefit claims last month come as the virus took its toll on jobs and despite the government's job retention scheme, commented Fiona Cincotta at Gain Capital. "This figure is going to get worse before it gets better."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.4% at 6,073.33
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Hang Seng: up 2.1% at 24,435.33
Nikkei 225: closed up 1.5% at 20,433.45
DJIA: closed up 911.95 points, 3.9%, at 24,597.37
S&P 500: closed up 3.2% at 2,953.91
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GBP: up at USD1.2251 (USD1.2221)
EUR: up at USD1.0940 (USD1.0892)
Gold: up at USD1,730.70 per ounce (USD1,729.70)
Oil (Brent): down at USD34.85 a barrel (USD35.48)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
1100 CEST EU construction output
1100 CEST Germany ZEW indicator of economic sentiment
0830 EDT US new residential construction
1630 EDT US API weekly statistical bulletin
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UK Prime Minister Boris Johnson has been by urged by London Mayor Sadiq Khan to impose a 14-day quarantine on international travellers arriving in the UK as soon as possible in response to fears of new arrivals seeding a second wave of Covid-19. Khan said the UK was an international outlier because it had not imposed widespread quarantine arrangements – and suggested this was due to a lack of preparation for a pandemic. UK Transport Secretary Grant Shapps said the scheme would come into operation "early next month" and promised that details would be set out shortly. He indicated that it would be a "blanket" provision applying to all countries, although ministers have already said the common travel area with Ireland would be unaffected. Khan told PA: "We have got a number of airports that serve us – Heathrow, Gatwick, City, Stansted and a number of other peripheral ones – but also the Eurostar as well. "I think it's really important that anybody coming to our country isolates for at least 14 days. I want them tested as well as soon as they possibly can."
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Ireland has recorded its lowest daily coronavirus death toll in almost eight weeks. The four fatalities announced on Monday came as Ireland began the first phase of its lockdown exit plan. The country's Covid-19 death toll now stands at 1,547. Shoppers flocked to garden centres and hardware stores across the country as a number of retail outlets reopened. Some outdoor work resumed and sports including golf and tennis began to be played again nationwide.
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Sales of new cars in the EU collapsed by 76% in April, a trade group said, linking the unprecedented year-on-year drop to restrictions imposed to prevent the spread of the novel coronavirus. Just around 270,000 new cars were registered last month, compared to 1.14 million in April 2019, the European Automobile Manufacturers Association said in a monthly bulletin. "The first full month with Covid-19 restrictions in place resulted in the strongest monthly drop in car demand since records began," ACEA noted. In March, year-on-year sales were down by 55%. In Italy and Spain, two countries which adopted some of the world's strictest virus containment measures, sales were down to almost zero, falling respectively by 98% and 97%. Sales were down by 89% in France, while Germany, a country that has been less seriously affected by the pandemic, reported a smaller year-on-year drop of 61%.
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BROKER RATING CHANGES
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CREDIT SUISSE CUTS ROLLS-ROYCE TO 'UNDERPERFORM' (OUTPERFORM) - PRICE TARGET 245 (1070) PENCE
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BERENBERG RAISES GREGGS TO 'BUY' ('HOLD') - TARGET 1860 (1700) PENCE
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COMPANIES - FTSE 100
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Imperial Brands cut its dividend after reporting a drop in interim profit as the tobacco firm said Covid-19 has only had a small effect on the business so far. For the half-year ended March 31, revenue rose to GBP14.67 billion from GBP14.39 billion last year, but pretax profit fell 23% to GBP785 million from GBP1.02 billion. Operating profit fell 20% to GBP925 million. Imperial Brands cut its interim dividend by 33% to 41.70 pence from 62.56p last year. Looking ahead, Imperial expects coronavirus-related factors to have a low single-digit impact on earnings per share. Joint chief executives Dominic Brisby and Joerg Biebernick said: "We have reduced our next generation products spend following the poor returns on investment last year and this, together with recent weaknesses in the vapour category, has resulted in lower [next-generation products] revenue." They added: "Overall, Covid-19 has so far had only a small impact on trading but we expect this to be more pronounced in the second half due to continued pressures on our duty-free and travel retail business, changes in consumption patterns including down-trading and a reversal of some first-half inventory build."
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DCC said it delivered a resilient annual performance amid the uncertainty created by the Covid-19 pandemic. For the financial year ended March 31, revenue slipped 3.1% to GBP14.76 billion from GBP15.23 billion in financial 2019 and pretax profit by 4.9% to GBP311.5 million from GBP327.4 million the year before. However, adjusted operating profit rose 7.3% to GBP494.3 million from GBP460.5 million. Despite the mixed performance, DCC raised its total dividend 5.0% to 145.27 pence from 138.35p. "Overall, DCC has traded robustly in April and the early weeks of May and has been significantly profitable in the period. Relative to initial expectations at the beginning of April, the performance of the Group has been better than anticipated, albeit behind the prior year. The group continues to be active from a development perspective and in recent days the Irish LPG business acquired an all-island electricity business, as it continues to grow its natural gas and power offering, while the US LPG business completed a small bolt-on acquisition," DCC said.
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More than 2,000 employees of the retail arm of energy supplier SSE are set to lose their jobs as new owner Ovo announced sweeping redundancies across its business, PA reports. Ovo will ask its staff to apply for voluntary redundancy as it tries to shed 2,600 roles after the coronavirus crisis forced it to speed up integration plans, it said on Tuesday. Around 8 in 10 of these will be among the workers who came to Ovo as part of its GBP500 million deal to buy SSE's retail arm. The lion's share of the lost jobs will be among those who work out in the field, such as meter readers and home service engineers. Ovo said that the Covid-19 outbreak, which has forced many of its fieldworkers to stay at home, has accelerated changes that were already happening in the energy sector. For instance, customers are now being forced to read their own meters.
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COMPANIES - GLOBAL
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Japan's SoftBank may sell up to USD20 billion of its shares in T-Mobile US, in the wake of the telecommunications company sealing a tie-up with Sprint, the Financial Times reported. The news comes roughly two months after the technology conglomerate announced plans to sell up to USD41 billion of assets to finance a stock buyback, reduce debts and increase its cash reserves. SoftBank followed up on Monday by saying it will buyback JPY500 billion, about USD4.66 billion, worth of stock between now and March 2021, about 6.7% of its shares. The FT reported that Goldman Sachs and Morgan Stanley are advising SoftBank on the potential T-Mobile stake sale. The newspaper added that Deutsche Telekom AG, T-Mobile's largest shareholder, will look to boost its stake. Under the terms of merger of T-Mobile and Sprint, Deutsche Telekom was to hold 43% of the combined company and Softbank 24%, with the remaining 33% in public hands. With a USD125 billion market capitalisation for T-Mobile US, SoftBank's 24% stake is worth USD30 billion.
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Former Walt Disney executive Kevin Mayer will become the head of TikTok and chief operating officer of the popular video app's parent company, the group announced. Mayer's surprise jump from one of the entertainment industry's most venerable companies is another victory for buzzy upstart TikTok, which has seen a surge in popularity among people locked down during the coronavirus pandemic, AFP reports. Mayer headed Disney's direct-to-consumer offerings, where he oversaw the successful rollout of Disney+ television streaming service. His new realm will include TikTok and global development at the app's parent company, Beijing-based ByteDance, according to the business. He will report directly to ByteDance Founder & Chief Executive Yiming Zhang.
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Tuesday's Shareholder Meetings
Diaceutics
Restaurant Group
Team17
PPHE Hotel Group
Bank of Ireland
Aquis Exchange
accesso Technology
Glenveagh Properties
Quixant
Schroder Asian Total Return Investment Company
Fidelity Japan Trust
Allianz Technology Trust
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By Tom Waite; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
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