LONDON, April 8 ― Britain's stock markets surged yesterday as signs of coronavirus infections easing in the worst-hit regions of Europe boosted energy, banking and battered travel stocks.
The internationally focused FTSE 100 settled 2.2 per cent higher, pulling back from an early rise of 3.5 per cent as a surging pound weighed on exporters.
Midcap stocks gained 5.1 per cent with shares of Cineworld soaring about 50 per cent after it suspended its dividend and said it was in talks with landlords, film studios and major suppliers to offset the impact of the closure of all of its 787 cinemas due to pandemic.
Investors have welcomed signs of slowing increases in coronavirus cases this week, particularly in hard-hit Italy where the death toll fell sharply on Monday.
“What we're seeing right now is a bit of a relief rally on the basis that the second derivative of the newsflow isn't any worse,” said Russell Quelch, a financials analyst at Redburn.
“But it's still very much a volatile, temperamental and an unpredictable market. We're going to stay that way for quite some time until we move into Phase 2 of the crisis which is high volatility and EPS revisions.”
New York state reported its deadliest day with 731 new deaths in the state on Tuesday, while the pace of deaths in Spain ticked up for the first time in five days, paring some hope among investors that cases were plateauing across the hot spots.
Meanwhile, Britain also saw its biggest daily increase in deaths. Prime Minister Boris Johnson was in stable condition in intensive care after receiving oxygen support to help him battle Covid-19, the potentially lethal respiratory illness caused by the novel coronavirus.
Still, the less gloomy tone yesterday helped the FTSE 100 recover about 15 per cent from its March low, but remains 26 per cent below from its January highs as experts warn a sharp economic slump is underway.
Low-cost airline Easyjet jumped 15 per cent, while Carnival Corp shot up 22 per cent after Saudi Arabia's sovereign wealth fund disclosed an 8.2 per cent stake in the coronavirus-hit cruise operator.
Travel stocks have been among the worst hit as they battle dwindling passenger numbers and travel lockdowns.
Oil & gas index and banking stocks gave the biggest boost to the FTSE 100.
Car dealership chain Inchcape rose 11.3 per cent as it scrapped its dividend and said its board and senior management would take a 20 per cent pay cut as it sought to cut costs to endure the coronavirus downturn.
However, UK-based healthcare real estate investment trust Assura dropped 10.2 per cent to the bottom of midcap index on discounted share placement. ― Reuters
