20th Mar 2020 12:08
(Alliance News) - London shares were higher at midday on Friday as investors wait on UK Chancellor of the Exchequer Rishi Sunak to unveil a rescue package aimed at supporting domestic businesses during the coronavirus crisis.
The FTSE 100 index was up 109.09 points, or 2.1%, at 5,260.70.
The FTSE 250 was down 853.72 points, or 6.7%, at 13,686.82, and the AIM All-Share was up 34.88 points, or 5.9% at 624.78.
The Cboe UK 100 was up 2.0% at 8,941.46, the Cboe UK 250 was up 5.6% at 11,891.02, and the Cboe Small Companies was up 2.4% at 7,552.43.
In Paris the CAC 40 was up 6.0%, while the DAX 30 in Frankfurt was up 4.6%.
"Pound and FTSE alike are still waiting for Rishi Sunak's latest address, one that is expected to see a wave of new measures announced aimed at mitigating the coronavirus crisis impact on businesses, wages and growth. Given the markets' inconsistent relationship with government and central bank interventions, it's not a guarantee that Sunak's appearance will preserve Friday's rebound," said Spreadex analyst Connor Campbell.
In the FTSE 100, InterContinental Hotels Group was up 11% despite the Holiday Inn and Crowne Plaza owner saying demand is currently at the lowest level it has ever seen.
To combat this, IHG is hoping to save about USD150 million through salary cuts, including "substantial" reduction in salary and incentives from its board and executive committee. Also, IHG will pull its final dividend of 85.9 US cents - saving about USD150 million - and said it will delay any further dividends until "visibility has improved".
Turning to trading, IHG said its global revenue per available room was down 6% in January and February, with a flat performance in the US being offset by a catastrophic drop in Greater China. In February, RevPAR in Greater China was down 90% year on year.
"InterContinental Hotels was one of the top FTSE 100 risers despite being one of a number of companies to suspend its dividend. Its guidance on recent trading is pretty apocalyptic but that had already been priced in by the market," AJ Bell's Russ Mould said.
At the other end of the large cap index, Rightmove was the worst performer, down 7.2% after the property portal said said it expects 2020 revenue to be reduced as a result of discounts to be offered to its Agency, New Homes and Commercial customers from April.
Rightmove said the discounts will reduce 2020 revenue by GBP65 million to GBP75 million. For 2019, the company posted pretax profit of GBP213.6 million on revenue of GBP289.3 million.
In the FTSE 250, JD Wetherspoon was the best performer, up 30% after the pub chain reported a rise in profit and revenue in the first half of its financial year, but cancelled its dividend due to the uncertainty surrounding the Covid-19 outbreak.
In the 26 weeks to January 26, Wetherspoon's recorded pretax profit of GBP57.9 million, up 15% from the GBP50.3 million seen in the same period the year before. Revenue was 4.9% higher year-on-year at GBP933.0 million from GBP889.6 million. Like-for-like sales in the first half of the financial year were 5.0% higher.
Like-for-like bar sales increased by 4.2%, food sales by 5.6% and fruit/slot machines by 20%. Like-for-like hotel room sales decreased by 1.3%, however. Bar sales were 60% of total sales, Wetherspoons noted.
The pound was quoted at USD1.1785 at midday, up from USD1.1665 at the close Thursday, as businesses await a rescue plan from the UK government.
Sunak has been under pressure from Labour, unions and even senior Conservative MPs to do more to help workers and the stalling economy weather the crisis. He will reveal new measures on Friday at the daily Covid-19 press conference in Downing Street, where he is expected to be joined by Boris Johnson.
The move follows the Bank of England's emergency interest rate cut on Thursday to help support the domestic economy.
Prime Minister Boris Johnson said he expects the tide to be turned in the fight within 12 weeks, as he urged the public to follow social distancing advice and for businesses to "stand by your employees".
The euro stood at USD1.0729 at midday, up from USD1.0710 at the European equities close Thursday. Against the yen, the dollar was trading at JPY110.07, flat from JPY110.06 late Thursday.
Stocks in New York are set for a higher open on Friday after Senate Republicans unveiled substantial stimulus measures.
The DJIA was called up 3.1%, the S&P 500 index up 2.7% and the Nasdaq Composite up 3.6%.
Senate Majority Leader Mitch McConnell on Thursday presented a USD1 trillion emergency relief package to combat the economic turmoil caused by the coronavirus pandemic in the US.
The Republican-drafted text, which if it becomes law would be one of the largest federal economic interventions in US history, must now be examined by Senate Democrats before a date for a vote can be set. If and when it clears the Senate, the measure must then be passed by the majority-Democratic House of Representatives before being signed into law by US President Donald Trump.
The Coronavirus Aid, Relief & Economic Security Act provides for "recovery rebates" of up to USD1,200 for taxpayers earning less than USD99,000 per year. It also offers USD208 billion in loans for companies hit by the crisis, including USD58 billion for the airline sector, and USD300 billion in small business loans.
This so-called third phase relief package follows the adoption of a bipartisan USD100 billion aid plan signed into law by the president on Wednesday.
Brent oil was quoted at USD29.86 a barrel at midday, up sharply from USD28.02 at the close Thursday, after Trump hinted he could intervene in the price war between Saudi Arabia and Russia which broke out earlier this month.
Gold was quoted at USD1,510.24 an ounce, up from USD1,477.90 late Thursday.
By Arvind Bhunjun; [email protected]
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