ADVFN Morning London Market Report: Monday 10 August 2020

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London open: Stocks rise on Trump coronavirus relief, China data

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London stocks rose in early trade on Monday as investors shrugged off US lawmakers’ failure to agree on a new stimulus package and escalating Sino-US relations, focusing instead on President Donald Trump’s unilateral extension of a relief package.

At 0900 BST, the FTSE 100 was up 0.9% at 6,087.35.

Spreadex analyst Connor Campbell said: “Arguably against the odds the European markets got off to a strong start of Monday, choosing to ignore the many issues that arose over the weekend.

“There’s a list the length of your arm why investors should be feeling edge. Congress is yet to agree on a fresh stimulus plan. The number of Covid-19 cases in the United States has now crossed 5 million. The UK just saw its daily number of fresh cases surpass 1,000 for the first time since June, ahead of the likely confirmation of a 21% economic contraction in Q2 on Thursday.

“And, most importantly, Donald Trump followed up his TikTok and WeChat bans with sanctions on 11 Chinese and Hong Kong officials, while having US health chief Alex Azar praise Taiwan’s democracy and response to the pandemic in a move designed to rile up Beijing.

“Setting all of that aside, the markets decided to instead celebrate the latest payroll tax-cutting executive orders from Trump, designed to bypass the blockade in Congress regarding coronavirus relief – despite critics of the actions claiming, in the words of Joe Biden, that it is a ‘reckless war on Social Security’, and may not actually provide much benefit to American citizens.”

Over the weekend, Trump signed four executive orders on coronavirus relief, one of which will provide up to $400 in enhanced unemployment benefits.

Chinese inflation data also helped to underpin the tone. Figures from the National Bureau of Statistics showed factory gate prices fell at a slower pace in July, with consumer inflation up on the back of higher food prices.

In equity markets, oil giants BP and Shell were among the top performers, along with British Airways and Iberia parent IAG.

Shipping services firm Clarkson surged to the top of the FTSE 250 after saying it would reinstate a previously-deferred dividend as it reported a “robust” first half with higher profits driven by its broking division.

Cineworld advanced, tracking gains for US peers on Friday after a US judge granted the government’s request to end the Paramount Decrees, a set of antitrust rules from the 1940s and 1950s that banned film studios from owning theatres.

Transport operators FirstGroup and Go-Ahead were both trading higher after a fresh round of regional bus funding from the government, while outsourcer Capita gained as it secured an extension to a Transport for London contract.

On the downside, Ocado was under the cosh after a downgrade to ‘underweight’ at Barclays, which said the company was well placed to benefit from a dramatic step-up in demand for online groceries but that the stock is expensive.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Melrose Industries Plc +3.21% +3.25 104.55
2 International Consolidated Airlines Group S.a. +3.12% +5.80 191.45
3 Easyjet Plc +2.26% +13.00 588.00
4 Tui Ag +2.23% +7.20 329.70
5 Whitbread Plc +2.19% +52.00 2,431.00
6 Marks And Spencer Group Plc +1.98% +2.05 105.65
7 Carnival Plc +1.87% +16.60 903.40
8 Intercontinental Hotels Group Plc +1.82% +71.00 3,982.00
9 Bp Plc +1.78% +5.10 292.35
10 Evraz Plc +1.77% +5.50 315.80

 

Top 10 FTSE 100 Fallers

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76.4% of retail CFD accounts lose money.

 

# Name Change Pct Change Cur Price
1 Hikma Pharmaceuticals Plc -3.18% -76.00 2,317.00
2 Hargreaves Lansdown Plc -2.49% -46.50 1,818.50
3 Intertek Group Plc -1.51% -88.00 5,722.00
4 Vodafone Group Plc -1.27% -1.48 115.26
5 Sage Group Plc -1.23% -9.40 756.00
6 Smurfit Kappa Group Plc -1.19% -32.00 2,662.00
7 Scottish Mortgage Investment Trust Plc -1.16% -10.50 892.00
8 Halma Plc -1.16% -26.00 2,224.00
9 London Stock Exchange Group Plc -1.04% -90.00 8,530.00
10 Spirax-sarco Engineering Plc -1.04% -110.00 10,480.00

 

Monday newspaper round-up: Travel industry, Twitter, AA

The travel industry has urged the government to rethink its 14-day quarantine policy for holidaymakers as rising coronavirus cases on the continent – including France and Greece – put more countries within the scope of the blunt approach. Testing at airports and regional quarantine requirements are among alternatives put forward by tourism figures concerned by the impact the policy could have on an already battered sector. – Guardian

The number of footballers investigated by HMRC rose dramatically in the tax year 2019-20, going up from 87 to 246 individuals, according to research by the accountancy firm UHY Hacker Young. The figures show footballers and their image rights are coming under increasing scrutiny as the UK tax authorities look to clamp down on loopholes in the way players are paid. – Guardian

Landlords, shops and restaurants have joined forces to ask the Government to step in and pay commercial rents to help them survive the coronavirus pandemic. Trade bodies have been in talks with ministers about proposals that would see the Government fund up to 50pc of rent and services charges owed by businesses in the retail, hospitality and leisure sectors. These “Property Bounce Back” grants would be targeted at businesses worst affected by lockdown. – Telegraph

Twitter has made an audacious attempt to gatecrash Microsoft’s talks to buy TikTok with a proposal to acquire the Chinese video-sharing app’s US operations. The micro-blogging network has held preliminary talks with TikTok, although it is regarded as a long shot to secure a deal given its market capitalisation of $29 billion is dwarfed by Microsoft’s $1.6 trillion value. Twitter’s interest was first reported in The Wall Street Journal. – The Times

The AA’s biggest shareholder has dismissed the private equity approaches for the breakdown service as “very opportunistic” and told it not to accept too low an offer. Drew Dickson, founder of Albert Bridge Capital, said he was surprised by the AA’s response to the approaches, adding that it was “jeopardising negotiating leverage” by emphasising the “dire circumstances” resulting from its £2.6 billion debt burden. – The Times

 

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