16th Apr 2020 17:00
(Alliance News) - Stocks in London ended higher on Thursday as parts of Europe moved to tentatively reopen their streets and economies, despite fears of a second wave in coronavirus cases.
After weeks on strict lockdowns, Spain and Italy have begun to ease restrictions, allowing some businesses to reopen.
Germany also announced initial steps to reopen some shops and gradually restart schools, Denmark began reopening schools for younger children after a month-long closure and Finland lifted a blockade of Helsinki.
Hard-hit parts of Europe have seen a slowdown in infections and deaths in recent days, with Spain recording 551 new deaths on Thursday, almost half of the daily toll at its peak.
The FTSE 100 index closed up 30.78 points, or 0.6%, at 5,628.43, having spent the better part of the session in the red.
The FTSE 250 ended 31.01 points higher, or 0.2%, at 15,378.57, while the AIM All-Share closed up 9.41 points, or 1.3%, at 743.35.
The Cboe UK 100 ended up 0.8% at 9,546.30, the Cboe UK 250 closed up 0.3% at 13,235.01, and the Cboe Small Companies ended up 0.8% at 8,661.22.
In Paris the CAC 40 ended flat, while the DAX 30 in Frankfurt ended up 0.5%.
"Equity markets are higher today as Germany has become the latest European country to set out plans to gradually re-open some aspects of its economy. Certain businesses will resume trading next week, and schools will re-open next month. Austria, Spain and Italy have all eased restrictions recently and there is a slight sense that countries have a better handle on the situation," said CMC Markets analyst David Madden.
On the London Stock Exchange, Barratt Developments ended the best blue-chip performer up 8.8% after the housebuilder sought to preserve cash by cancelling its interim dividend, halting land-buying, cutting spending and furloughing staff.
The UK's largest housebuilder by volume added that it is "financially strong", with cash of GBP450 million.
"The group's adopted a number of measures, including cancelling the interim dividend, which although painful for shareholders in the shorter could mean survival in the long run," noted Hargreaves Lansdown's Sophie Lund-Yates.
Evraz ended second best blue-chip performer, up 7.7% after the Russian steelmaker said it has seen little operational interruption from the Covid-19 outbreak, but expects steel demand to suffer as a result of a pandemic-induced economic downturn.
Impact on exports will be "less significant", the Russian firm said, due to the recent devaluation of the rouble. Net debt at December 31 stood at USD3.45 billion. Evraz said it had cash of USD1.42 billion.
Auto Trader closed up 5.6% after UBS raised the automotive digital marketplace to Buy from Neutral.
At the other end of the large-cap index, M&G ended the worst performer, down 12% after the stock went ex-dividend, meaning new buyers no longer qualify for the latest payout.
Stocks in New York were mostly lower at the London equities close after data showed another spike in the number of US workers seeking jobless benefits, lifting total filings for claims over the past month over 20 million.
The DJIA was down 0.6%, the S&P 500 index down 0.2%, but the tech-heavy Nasdaq Composite was up 0.7%.
Data from the US Bureau of Labor showed seasonally-adjusted initial claims totalled 5.2 million in the week ended April 11, down from 6.6 million the week before, the week ended April 4. The week before that, the one ended March 28, claims stood at 6.9 million, a record for the series. This brings the total number of workers who have filed initial jobless claims to around 22 million.
For the week to April 11, market consensus had pencilled in 5.1 million claims, according to FXStreet. Prior to Covid-19, the record for jobless claims was 695,000, reached in October 1982.
Seasonally-adjusted insured unemployment - also known as continuing claims - rose to just under 12 million for the week ended April 4, the highest level in the history of the series. The previous week's level was revised down by 9,000 to 7.4 million.
Robert Alster, head of Investment Services at Close Brothers Asset Management, commented: "Make no mistake that these figures are another severe blow to the US economy. However, it's worth noting they represent a slight improvement on the previous numbers which, in turn, might indicate that the US has passed the peak of jobless claims.
"The question on the lips of both policymakers, and those who've lost their jobs, is how long will it take for companies to start hiring again once the country 'reopens' for business? In truth, we don't know - but many will be hoping President Trump is right in his projection that, once the lockdown is lifted, America's unemployed find work considerably more quickly than in previous recessions. Of course it is not inconceivable that companies choose to hire more conservatively; either due to the possibility of further lockdowns or as a way to restructure and emerge from this crisis in better shape."
On the US corporate front, Morgan Stanley reported a sharp drop in quarterly profit as the bank's Investment Management arm struggled amid the Covid-19 pandemic.
In the three months to March 31, the US investment banking giant recorded net income of USD1.70 billion, down 43% from USD2.96 billion in the same quarter the year prior. Diluted EPS slipped 27% to USD1.01 from USD1.39.
Net revenue was down 7.8% year-on-year to USD9.49 billion from USD10.29 billion.
The stock was down 0.7% on Wall Street.
BlackRock said higher costs hurt income in the first quarter of 2020, but its strategic investments continue to deliver.
The New York-based investment manager reported 11% revenue growth to USD3.71 billion in the three months to the end of March compared to USD3.35 billion a year earlier. The boost mainly came from higher investment advisory, administration fees and securities lending revenue.
Net income declined by 41%, however, to USD627 million from USD1.06 billion year-on-year, as general & administration expenses jumped to USD1.14 billion from USD388 million. Higher costs were primarily driven by the charitable contribution and product launch costs, BlackRock explained.
BlackRock's assets under management stood at USD6.467 trillion at the end of March, slightly lower than USD6.515 trillion reported a year earlier.
The stock was up 2.7% in New York.
The pound was quoted at USD1.2466 at the London equities close, down from USD1.2493 at the close Wednesday.
Sterling spiked to an intraday high of USD1.2527 against the greenback in the wake of the historically high US jobless claims numbers, but quickly surrendered these gains.
"The dollar slightly firmed up following the downbeat economic data as traders seem to focus on the positives that the US economy is getting through the worst of the data," said OANDA market analyst Edward Moya.
The euro stood at USD1.0868 at the European equities close, down from USD1.0903 late Wednesday. Against the yen, the dollar was trading at JPY107.31, lower than JPY107.51 late Wednesday.
Brent oil was quoted at USD27.78 a barrel at the London equities close, firm from USD27.68 at the close Wednesday.
OPEC said that the world market for crude is undergoing an unprecedented jolt due to coronavirus mitigation measures that have decimated demand.
"The oil market is currently undergoing a historic shock that is abrupt, extreme and at global scale," said the group of producer nations in its latest monthly report.
The cartel now forecasts a "historical drop" of around 6.8 million barrels per day in average daily demand for 2020. It sees the worst contraction of about 20 million barrels per day in April.
Gold was quoted at USD1,728.30 an ounce at the London close, higher against USD1,720.22 late Wednesday.
The economic events calendar on Friday has China GDP figures overnight and eurozone inflation readings at 1000 BST.
The UK corporate calendar on Friday has first-quarter earnings from bookmaker Flutter Entertainments and asset manager Man Group.
By Arvind Bhunjun; [email protected]
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