UK shares join global rebound on stimulus measures
Reuters
Published Mar 24, 2020 08:46
Updated Mar 24, 2020 15:24
By Sruthi Shankar and Devik Jain
(Reuters) - UK shares regained some ground on Tuesday, as massive stimulus measures from central banks and governments paused the coronavirus-driven selloff even as Britain went into a lockdown.
The FTSE 100 index (FTSE) rose 4.3%, tracking strong gains in Asia, as investors cheered the U.S. Federal Reserve's offer of unlimited expansion of asset purchases to stabilise financial markets.
"A bit of a breather from the equity market death spiral today as risk sentiment recovered after the Fed went all in," said Stephen Innes, a strategist at AxiCorp.
"And there's probably a bit more gas left in the tank as the markets attempt to weigh the pros and cons of the most significant monetary policy experiment ever."
UK's commodity-heavy FTSE 100 was boosted by a jump in oil and metal prices. Oil majors BP Plc (L:BP) Royal Dutch Shell Plc (L:RDSb) rallied more than 15%, while the wider mining index (FTNMX1770) rose 10%, led by BHP Group (L:BHPB), Rio Tinto (L:RIO) and Anglo American Plc (L:AAL).
Battered travel stocks including those of Carnival Corp (L:CCL) and InterContinental Hotels Group (L:IHG) jumped more than 8%.
UK midcap shares (FTMC) also rose 4.3%. However, the main FTSE index was set for its worst month in over three decades as more companies issued profit warnings and Prime Minister Boris Johnson ordered Britons to stay at home. The number of deaths in Britain has risen to 335 from the coronavirus.
Home furnishings retailer Dunelm Group (L:DNLM) dropped 3% after saying it would draw down all its available credit and cancel interim dividend payment due to the coronavirus pandemic.
Britain's biggest sportswear retailer JD Sports (L:JD) rose 5.5% as it delayed the publication of financial results to May, but said it has enough cash to ride out the coronavirus crisis.
Latest data showed Britain's economy is shrinking at a record pace, faster than during the 2008-09 financial crisis, as businesses across the services sector shut due to the coronavirus.
The flash composite PMI sank to 37.1 from 53.0, its lowest since the survey started in January 1998 and below all forecasts in a Reuters poll of economists.
"In the near term, a further fall in the PMIs to new lows is likely as containment measures are strengthened and there is a simultaneous sudden stop for many firms," UniCredit analysts wrote in a client note.
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Online gambling firm 888 Holdings (L:888) soared 30% after saying more people were playing casino and poker as they remained holed up in their homes, but said its 2020 core profit could be hit in the high single-digit millions of dollars.
Written By: Reuters
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