Markets started the week on a positive note with Asian stocks trading higher after better than expected Chinese export data and a strong sales update from Taiwan Semiconductor Manufacturing, one of the world’s largest computer-chip makers.
US futures were also higher after several major US brokers declared the sell-off over and JPMorgan claimed markets would hit new all-time highs next year.
The FTSE 100 joined in the rally, gaining 0.8% to 5,890 points in early trading, lifted by healthcare and retail stocks. Surprisingly, major oil stocks such as BP (BP.) and Royal Dutch Shell (RDSB) failed to respond to talk of record production cuts by ‘OPEC-plus’ which was underpinning crude prices.
The biggest gainer on the FTSE was pharmaceutical giant AstraZeneca (AZN) which reported ‘overwhelmingly positive’ phase III trial results for its cancer drug Tagrisso, with studies showing it produced ‘unprecedented results’ in treating patients with early-stage non-small cell lung cancer. Shares gained 6.7% to £75.99.
Another big gainer was clothing retailer Next (NXT) which announced it had re-opened its online operations including its warehouses and distribution sites ‘in a very limited way’ from today. Shares added 3.6% to £47.90.
The company temporarily closed its online business on 26 March over concerns from employees worried about contracting coronavirus.
Outside the FTSE 100, shares in bus and rail operator National Express (NEX) jumped 6% to 274p after the firm reported a strong start to the year even with the withdrawal of some services due to the epidemic.
It also announced it was cancelling its final dividend for the 2019 financial year, adding to the tally of UK companies withdrawing payouts.
Defence group Chemring (CHG) gained 3.8% to 211p after it reported that all of its businesses remained open and orders were strong with more than 90% of current year revenues already covered. It also confirmed it would pay the final dividend for 2019 of 2.9p per share as agreed at the AGM last month.
Mining firm Hochschild (HOC) cancelled its final dividend for 2019 in order to conserve it cash while its mines in Peru remain closed. In Argentina, while the government has approved the re-opening of its San Jose mine, the ramp-up is likely to take some time. Shares traded sideways at 138p.
Shares in pub operator Mitchells & Butler (MAB) slid 7.5% to 206p after it disclosed that the forced closure of its sites ‘could amount to a technical breach of our secured financing arrangements.’
The firm’s banks have given it a temporary waiver until 15 May to avoid breaching covenants and ‘further discussions’ are under way, but shareholders were understandably shaken at the revelation.
In contrast, rival Revolution Bars (RBG) announced that it had negotiated more headroom with its lender, NatWest, after cutting operating costs to just £400,000 a week thanks to rent relief, deferred VAT and payroll taxes and support from suppliers. Shares jumped 25% to 19.25p in response.
Investors in AIM-listed gaming technology firm Nektan (NKTN:AIM) were less fortunate as trading was suspended after the firm ‘failed to secure the necessary funds for the requisite additional working capital necessary to secure the future of the company.’
The company has applied to the Gibraltar courts to have an administrator appointed later today.
SEE HERE FOR A LIST OF FTSE RISERS AND FALLERS
