Politics

FTSE 100 ignores trade war noise; Carnival cruises higher after yesterday’s lay-offs news

9.10am: Market ignoresTrump's sabre-rattling

Sabre-rattling in Chinas direction by President Trump has been shrugged off by investors as just electioneering, as equities trend firmer.

The FTSE 100 was up 72 points (1.2%) at 5,813, led by telecoms giant BT Group PLC (LON:BT.A), which was up 6.9% at 109.15p on reports it is planning to sell off a chunk of its Openreach business.

Cruises operator Carnival PLC (LON:CCL) found itself in the unaccustomed spot of being in the top three risers on the Footsie leader-board after it announced yesterday “a combination of layoffs, furloughs, reduced work weeks and salary reductions across the company.”

The shares were up 6.2% at 882.2p. The company said booking trends for the first half of 2021 remain within historical ranges.

@CarnivalPLC has laid out the companys redundancy plan, which will include a combination of furloughs, salary reductions and reduced hours https://t.co/UJBHkUjYMw #carnivalcorporation #redundancy #coronavirus #cruise

— Cruise Trade News (@cruisetradenews) May 15, 2020

Scottish Mortgage Investment Trust (LON:SMT) is probably even less accustomed to being at the top of the Footsie leader-board – and to avoid any confusion, it has not made the podium today either but it was up 2.7% at 693p after publishing its full-year results that showed a 13.7% year-on-year increased in the bet asset value.

8.45am: Upbeat start to end the week

The FTSE 100 took its cue from Wall Street and Asias main markets to open in positive territory on Friday.

The UK's index of blue-chip shares started 71 points higher at 5,811.63, having dropped 162 points on Thursday.

While traders werent unduly perturbed by a slew of seemingly dire economic data from China, sentiment could turn on the latest GDP figure from the Eurozone later and US retail sales numbers this afternoon.

“The economic pictures is now the biggest driver for many assets as the weaker data points to just how deep the economic hole will be,” said James Hughes of Scope Markets.

The days big riser was BT Group (LON:BT.A) amid reports it is planning to sell a stake in its Openreach infrastructure business to fund the £12bn roll-out of fibre broadband. The shares advanced almost 10% early on.

It was a bounce-back day for the travel-related stocks, led by Carnival (LON:CCL), with the cruise lines group sailing 6.8% higher.

Not far behind were Intercontinental Hotels (LON:IHG) and easyJet (LON:EZJ), which were each up 3.6%.

William Hill (LON:WMH) gained 7% after an update on current trading that was not quite as bad as feared.

Proactive news headlines:

Sunrise Resources PLC (LON:SRES) has told investors that key documents in its permitting process for the CS Project, in Nevada, are now available for public comment. The company noted that the move marks the culmination of over 2 years of solid work involving the preparation of a detailed Mine Plan, extensive baseline field and desk environmental studies. "We are delighted to have reached this final stage in the permitting process and, whilst there have been a number of delays to the process, the end result is a robust environmental assessment,” Patrick Cheetham, Sunrise executive chairman said in a statement.

Zoetic International PLC (LON:ZOE) saw its shares jump on Friday as it predicted that distribution agreements agreed and that it is close to signing will lead to a “substantial increase” in sales of its Chill brand of cannabidiol (CBD) products in the US market. In a trading update, the CBD firm said the Chill brands focus on the tobacco replacement market is expected to be “especially attractive” as health concerns were exacerbated by the coronavirus pandemic, adding that it has also commenced negotiations for distribution of Chill products to two overseas markets. Zoetic also said it hopes to conclude “further significant distribution contracts” in the first quarter of its current financial year.

Asiamet Resources Ltd (LON:ARS) told investors it has landed a key approval for the BKM copper project in Indonesia, with the Governor of Central Kalimantan recommending the project to proceed into construction and development. It is part of a process for the project to secure a forestry borrow-to-use (Pinjam Pakai) permit from the Government of Indonesia. "Having recently secured the forestry permit for exploration, Asiamet is very pleased to have now received the Governor's recommendation for the Pinjam Pakai permitting process,” Asiamet executive chairman Tony Manini said in a statement.

discoverIE Group PLC (LON:DSCV) has said its business model is “resilient and flexible” and added that it had been encouraged by the continued “demand for its products” during the coronavirus (COVID-29) pandemic. In a trading update, the electronics designer and distributor said its sales increased by 8% year-on-year at constant currencies in the 12 months ended March 31, 2020, meaning earnings will be slightly ahead of the companys revised expectations following a strong recovery in China. The order book, meanwhile, was up 7% at a record £159mln, though sales to date for the first quarter are currently 10% lower on an organic basis compared with last year. This is partly the result of brief shutdowns of facilities in Sri Lanka, India and the US.

Ormonde Mining plc (LON:ORM) has told investors its management continues to review new project opportunities, whilst the coronavirus (COVID-19) pandemic has restricted the firms Spanish mine activities to the desktop. More than 80 projects have so far been looked at by the company since it agreed the divestment of its stake in the Barruecopardo tungsten mine project, it noted. “A small number of these opportunities remain promising, being of an appropriate scale whereby the company's cash would aid meaningful development, and which the directors believe could have the potential to add materially to shareholder value,” Ormonde said in a business update.

Keywords Studios PLC (LON:KWS) has raised £100mln via a share placing to leverage what it said was a “unique opportunity” to continue its acquisition strategy. The video game services firm said it had raised the funds through the issue of 6.9mln new shares at a price of 1,450p each, a 5.8% discount to its closing price on Thursday. Announcing its placing plans after Thursdays close, Keywords said while the coronavirus pandemic had increased the amount of video game playing, driving continued demand for content and for its own services, it was expecting to see “some stress in predominantly smaller service providers, which are typically single location and service with fewer clients and less able to weather the disruption”. The firm also provided a brief update on its current trading, reporting that despite greater pandemic disruption in the second half of March, revenues in March and April were 7% above the same two months of 2019 while the group had also gradually increased the operational capacity of its testing service into May.

Ergomed PLC (LON:ERGO) has announced that it's annual general meeting (AGM) will be held at the company's registered offices at 1 Occam Court, Surrey Research Park, Guildford, GU2 7HJ at 9.30am on Wednesday, June 10, 2020. In light of the UK government's current coronavirus (COVID-19) measures, the AGM will be run as a closed meeting and shareholders will not be able to attend in person, with the Form of Proxy for voting to be available on the company's website at www.ergomedplc.com. In conjunction with the AGM, Ergomed also announced that non-executive director Dr Jim Esinhart will not be standing for re-election and will step down from the board with immediate effect. It also said that non-executive director Rolf Soderstrom, has assumed the additional role of senior independent director.

6.30 am: London set for a brighter day

UK stocks are set to bounce back today, taking their cue from US markets, which finished higher yesterday after a soft start as worries over a second ware of coronavirus (COVID-19) infections eased.

A slew of economic data from China is not expected to spoil the party with spread betting quotes indicating the Footsie will open its account at around 5,796, up 54 points, clawing back a third of yesterdays losses.

“Overnight, China announced several economic reports. The fixed asset investment reading for April was -10.3%, while the consensus estimate was -10%, and keep in mind the March update was -16%,” reported CMCs David Madden.

“Industrial production was 3.9% and economists were anticipating 1.5%, while the previous reading was -1.1%. Retail sales came in at -7.5%, and the forecast was -7%. The retail sales report for March was -15.8%. Traders responded well to the improving data from China, which is why stocks in Asia are a little higher. The European markets are on track to recoup some of yesterdays losses,” he added.

Iris Pang, the chief economist covering Greater China at ING, said “this set of data shows only small and gradual improvements in economic activity, which could upset markets as China is seen as the "first-out" economy from COVID-19.”

“Moreover, COVID-19 could be spreading in clusters around the world now that the first round of infection has not been conclusively eradicated.

“In general, these imply unemployment levels in major countries remaining very high, and demand from these economies should, therefore, be weaker than during previous crises,” Pang suggested.

Asian markets have taken the data in their stride. Picking up the baton from US markets – the Dow Jones Industrials Average rose 377 points to close at 23,625 and the S&P 500 put on 33 points at 2,853 – the Nikkei 225 in Japan was 111 points firmer at 20,025 while in Hong Kong, the Hang Seng was up 96 points at 23,925.

On the home front, investors will have some mid-cap news to chew over in the form of an update fRead More – Source

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