LONDON, March 26 ― London shares extended gains for a second session yesterday as an imminent US stimulus package and moves by companies to deal with the financial effects of the coronavirus crisis offset the impact on markets of a surge in cases domestically.
The FTSE 100 closed up 4.5 per cent following its biggest percentage gain on Tuesday since the wild swings of the 2008 financial crisis.
That aided a 16 per cent recovery from the lows hit last week as investors pinned hopes on massive steps by central banks and governments to cushion the economic impact of the pandemic.
US senators are set to vote on a US$2 trillion (RM8.87 trillion) package of legislation, expected to include a US$500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to US$3,000 apiece to millions of US families.
“What the European, British or the US governments have done in terms of stimulating the economy has helped, but I don't think we're out of rough times” said Simon Calton, chief executive officer at Carlton James in London.
Volatility was still in play, driving the blue-chip FTSE index down 0.8 per cent in late morning trading. It recovered as oil companies and other recently battered stocks surged.
The health crisis continued to deepen, with Britain seeing its biggest daily jump in the death toll from coronavirus on Tuesday. Prince Charles, the 71-year-old heir to the British throne, tested positive for the virus.
Businesses listed more damage, with housebuilder Persimmon Plc and retirement home developer McCarthy & Stone starting an orderly shutdown of their construction sites.
Pest control company Rentokil Initial Plc dropped 8.2 per cent as it withdrew its 2020 outlook and suspended dividend payments even as it saw a surge in demand for its specialist hygiene and disinfection services.
British travel-food company SSP, however, rose 23 per cent after launching an emergency issue of shares worth 20 per cent of its equity capital as it laid off staff and cut spending.
SSP and student housing operator Unite Group were among companies that emerged as likely candidates for the government's emergency lending scheme, aimed at helping tide companies over the coronavirus shutdown.
Bicycles and car products retailer Halfords surged 26 per cent after saying it was confident that it could operate within its debt facilities, although it warned of a 25 per cent drop in sales and suspended its dividend.
Companies listed on the pan-European STOXX 600 are now expected to report a 14.9 per cent decline in earnings in the second quarter, down from an 8.2 per cent drop forecast a week earlier. ― Reuters
