Bad news is seemingly starting to catch up with the FTSE 100 as the UK’s benchmark index fell 1.29% to 5,751.39 in early trading on Friday.
Despite a mountain of concerning economic data, which today includes UK retail sales for March falling a record 5.1%, as a result of the coronavirus pandemic, markets appear to have shrugged off most of the numbers, with many becoming in line with revised analyst expectations.
But what tipped the scales this morning appears to be news that remdesivir, the antiviral drug promoted by US president Donald Trump among others, failed its first clinical randomised trial.
According to documents accidentally published by the World Health Organisation, remdesivir did not improve patients’ condition, while the study was also stopped early because of side effects.
Asian stock markets also fell after the news emerged, with China’s Shanghai Composite down 1.06%, Japan’s Nikkei 225 falling 0.86% and the Hang Seng in Hong Kong dipping 0.37%.
In commodities, gold gained 1.5% to $1,736 per ounce while oil is at least back in positive territory with West Texas Intermediate crude futures trading 2% higher today at $16.83 per barrel and brent crude futures up 2.2% to $21.80 a barrel.
PEARSON PLANS TO PAY DIVIDEND
While in company news, educational services provider and publisher Pearson (PSON) fell 1.1% to 446.3p on announcing that its revenue fell 5% in the first quarter, owing to disruptions caused by the coronavirus crisis including school closures.
Pearson, however, also touted ample financial headroom and pressed on with plans to pay its 2019 final dividend.
It said the proposed final dividend of 13.5p per share would be voted on at its annual general meeting on Friday and would be payable on 7 May subject to shareholder approval.
‘We are in a strong financial position with a healthy balance sheet, low net debt and good liquidity,’ chief executive John Fallon said.
BURBERRY MAINTAINS STAFF PAY AS TOP BRASS TAKE CUT
Luxury fashion house Burberry (BRBY) dropped 3% to £13 after it said it would keep paying employees’ base salaries without tapping UK government support.
The company added that its top brass had agreed to a voluntary 20% reduction in their base salary and fees from April through June, while Burberry also delayed the release of its annual results by eight days.
Burberry said it would continue to maintain base pay for all employees unable to fulfil their roles because of store or site closures.
Its trench coat factory in Castleford was now manufacturing non-surgical gowns and supplying them to the NHS, with more than 100,000 pieces of PPE donated so far.
PERSIMMON LATEST HOUSEBUILDER TO REOPEN SITES
Housebuilder Persimmon (PSN) slipped 1.8% to £21.50, even as it said it would begin a phased restart at construction sites from Monday that had been idled due to coronavirus pandemic.
The company also announced that it had secured about 820 gross private sales reservations in the five weeks ended 19 April, as its sales team worked from home using online resources.
‘The government has issued clear guidance that it sees construction as a vital element of the UK economy,’ Persimmon said.
EMBATTLED FIRSTGROUP BAGS GOVT SUPPORT
Struggling bus and rail operator FirstGroup (FGP) gained over 4% to 62p after it said it had tapped coronavirus government aid programmes in a bid to bolster its liquidity.
Liquidity was further enhanced through £300m issuance under UK government’s Covid Corporate Financing Facility scheme, boosting committed headroom and free cash increases to about £800m.
Which is just as well given the company said it has seen a significant decline in demand across its rail and bus businesses in the UK and North America, with passenger volumes in its various divisions down between 60-90%.
OTHER COMPANY NEWS
Immunotherapy developer Scancell (SCLP:AIM) soared 73% to 8.8p on announcing that it had initiated a research programme to develop a coronavirus vaccine.
Pharma giant AstraZeneca (AZN) was broadly flat at £81.84, having released further positive results from a clinical trial of a drug used to treat prostate cancer.
Trading platform IG (IGG) rose 1.7% to 748.5p, as it reiterated its intention to pay a dividend amid a jump in trading activity owing to market volatility created by the coronavirus crisis.
IG, however, also said its costs would be higher than expected as it invested in its business.
Component manufacturer for the aerospace and defence sectors Senior (SNR) gained 1% to 61.45p on announcing that it had decided to hold onto its aerostructures business, having invited bids last December.
Senior also said it had furloughed around 17% of its workforce as the Covid-19 crisis crimped customer demand.
Cybersecurity group Shearwater (SWG:AIM) dropped 9.3% to 263p as it launched a share placing to raise at least £2.5m to fund ‘considerable growth opportunities within its markets’.
Pesticides company Plant Health Care (PHC:AIM) fell 4.4% to 6p on posting a full-year loss, as its sales fell and margins were squeezed by US trade tariffs imposed on China.
