18th May 2020 08:50
(Alliance News) - Stock prices in London opened sharply higher on Monday with gold and oil stocks among the best performers as the reopening of some economies boosted hopes of a revival in demand for commodities.
Spain on Sunday reported 87 coronavirus deaths over a 24-hour period, the first time in two months that the daily toll has dropped below 100. The number came a day before Spain is to further relax lockdown measures across the country, except in Madrid and Barcelona.
Italy also on Sunday recorded the fewest deaths from coronavirus in one day since its two-month lockdown began, as the country stands poised to reopen most commercial activity. The civil protection unit said 145 people had died of the virus in the prior 24 hours, the lowest level since March 9, when 97 people died of Covid-19.
The FTSE 100 was up 135.86 points, or 2.3%, at 5,935.63. The mid-cap FTSE 250 index was up 333.56 points, or 2.1%, at 15,992.90. The AIM All-Share index was up 0.8% at 815.52.
The Cboe UK 100 index was up 2.0% at 10,012.40. The Cboe 250 was up 0.7% at 13,384.25, and the Cboe Small Companies was flat at 8,684.68.
In mainland Europe, the CAC 40 in Paris was up 2.0%, while the DAX 30 in Frankfurt was up 2.3%.
On the London Stock Exchange, gold miner Fresnillo was the best blue-chip performer, up 6.5%, tracking spot gold prices higher. The precious metal was trading at USD1,760.43 an ounce Monday morning, up sharply from USD1,743.84 at the London equities close Friday.
Gold hit an intraday high of USD1,764.48 an ounce overnight - the highest level since November 2012 - in the wake of comments from US Federal Reserve Chair Jerome Powell.
Powell told broadcaster CBS's '60 Minutes' programme on Sunday that the US economy can begin to recover from a recession in the second half of the year, assuming the coronavirus doesn't erupt in a second wave. But suggested that a full recovery won't likely be possible before the arrival of a vaccine.
"Gold has traded at fresh yearly highs every month so far this year and could continue to do so following Jerome Powell's warning of a drawn-out recovery and a disruption to economic activity that could stretch towards the end of next year," said City Index analyst Fiona Cincotta.
In the FTSE 250, Hochschild Mining was the best performer, up 15%. The gold miner said it has met all the Covid-19 health and safety protocols established by the Peruvian government to restart operations at the Inmaculada and Pallancata mines.
Hochschild plans to begin ramping-up progressively to achieve full production in the coming weeks. The miner expects to reissue its annual guidance once full production is achieved and the overall impact of the suspensions has become clear, it added.
In addition, airlines were among the blue-chip risers as investors reacted positively to annual results and comments from Irish carrier Ryanair Holdings.
British Airways parent International Consolidated Airlines was up 4.4% and easyJet was up 3.5%.
Ryanair reported a rise in earnings and traffic in its recently ended financial year which was largely unaffected by the Covid-19 pandemic that has since battered the airline sector.
Revenue in the financial year that ended March 31 was 10% higher annually at EUR8.49 billion from EUR7.70 billion. Pretax profit, however, was down by 29% year-on-year to EUR670.3 million from EUR948.1 million.
Ryanair expects to operate fewer than 1% of its scheduled flight programme in April, May and June - its first quarter. It expects a EUR200 million loss in the first quarter, with a reduced loss in the second, when it expects to operate 50% of flights.
The company said it is in talks with Boeing to cut planned aircraft deliveries, "to reflect slower traffic growth post Covid-19 in 2020 & 2021".
Ryanair shares were up 4.6%.
Heavyweight oil majors also were in the green with BP, up 4.8%, while Royal Dutch Shell 'A' and 'B' were up 4.7% and 4.1%, respectively, tracking spot oil prices higher.
Brent oil was quoted at USD33.74 a barrel Monday morning, up sharply from USD31.27 late Friday.
"Crude oil surged to over USD30 for the first time since March. Commodity currencies pushed higher as markets took encouragement from signs of business reopening across western economies," commented AxiCorp's Stephen Innes.
The Japanese Nikkei 225 index closed up 0.5%. In China, the Shanghai Composite closed up 0.6%, while the Hang Seng index in Hong Kong is up 0.3%.
The Japanese economy has plunged into recession as the coronavirus pandemic and a consumption tax hike last year ravage the world's third-largest economy.
Japan's gross domestic product contracted at an annualized rate of 3.4% in the first quarter of 2020, according to a report released by the Cabinet Office on Monday.
Economic growth in the last quarter of 2019 was revised down to a 7.3% contraction from a 7.1% fall estimated in March, the office said.
Against the yen, the dollar was quoted at JPY107.15. marginally lower than JPY107.23.
The pound was priced at USD1.2112 on Monday morning, marginally lower from USD1.2125 at the London equities close Friday.
The UK government is investing a further GBP84 million in the hunt for a coronavirus vaccine as ministers announced a ground-breaking deal which could make millions of doses available in the UK as early as September.
Business Secretary Alok Sharma on Sunday said the additional funding would support teams at Oxford University and Imperial College London engaged in the global race to find a vaccine that could finally end the devastating pandemic.
At the same time, he said Oxford had signed a global licensing agreement with AstraZeneca which could see it supply 100 million doses of a vaccine - with 30 million going to the UK - as soon as September if one has been found by then.
AstraZeneca shares were up 2.0% early Monday.
The euro was quoted at USD1.0821, flat from USD1.0818.
By Arvind Bhunjun; [email protected]
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