A busy week for economic data gets off to a positive start in the UK with markets on the front foot as investors embraced the government’s first moves to ease pandemic lockdown measures.
Both the benchmark FTSE 100 and FTSE 250 mid cap indexes made early gains on Monday despite the absence of major corporate news, rising around 1% apiece to 5,994.32 and 16,414.81, outstripping gains on major European markets.
Chemicals firm Johnson Matthey (JMAT) tops the early FTSE leader board, up close on 5% at £20.48, while budget flyer EasyJet (EZJ) is the biggest FTSE faller, down nearly 7% to 494.9p as investors continue to mull over the grounding of much of its aircraft fleet.
This week sees some key economic data with first quarter UK GDP data due, although ugly figures look certain as the pandemic lockdown put the squeeze on economic activity. There are also GDP figures from Germany to look out for and Eurozone industrial production numbers for April, while in the US some key retail sales and industrial output numbers will be released.
QUIET ON THE CORPORATE FRONT
It’s a fairly slow Monday for company announcements although there is upbeat drug data from AstraZenenca (AZN).
The pharma giant reported positive news on the progress of its gastric and ovarian cancer drugs in the US, with the latter approved for use in the US. That sent Astra shares 0.5% higher to £85.98.
FTSE 250 industrial supplies business Diploma (DPLM) rose 1.5% to £17.96 despite joining the lengthening list of companies that have pulled dividends and calling the near-term outlook ‘highly uncertain.’
But investors were otherwise impressed by robust first half figures that showed high single digit increases in sales and profits for the six months to 31 March.
Plastics manufacturer Victrex (VCT) shed 0.5% to £19.63 as it booked a 1% fall in first half profit and scrapped its interim dividend after rising sales were offset by margin pressure.
Victrex said it had made a ‘solid start’ to the second half, but was seeing ‘emerging headwinds’ in its forward order book due to the Covid-19 crisis.
Healthcare facility investor Primary Health Properties (PHP) gained 1% to 158.6p after it bought a portfolio of 20 medical centres in England and Wales for £47.1m.
Equally important, the company also reported ‘robust’ rent collection across its portfolio.
Automotive fluid system supplier TI Fluid Systems (TIF) moved more than 1% higher to 172.6p in response to its announcement that it would pay its 2019 final dividend as planned, despite its revenue slipping in the first quarter.
Funeral operator Dignity (DTY) nudged 0.4% higher to 235p despite reporting a fall in profit that it pinned on operational impacts from the Covid-19 crisis.
Dignity is also expecting a rise in deaths related to the respiratory disease to keep it busy this year.
SMALLER COMPANY WRAP
Israeli healthcare kit designer BATM Advanced Communications (BVC) continued to surge as it races to develop Covid-19 home test kits and launched an antibody test in Europe.
BATM shares jumped nearly 8% on Monday to 86p, valuing the business at about £380m. The stock has doubled in value since mid-April.
Cream cakes retailer Cake Box (CBOX:AIM) rose 0.7% higher to 153.5p on announcing that it expected to have all its high-street shops open by early June.
Consultancy company Science Group (SAG:AIM) slid 2.4% to 200p, having decided to not recommend a dividend at its upcoming annual general meeting.
Science Group said payment of an interim dividend would be considered later in the year if appropriate.
Regenerative medicine company Tissue Regenix (TRX:AIM) jumped more than 25% to 0.85p on news that it had inked a manufacturing pact to develop a new product line that addresses orthopaedic soft tissue repairs.
Property investor RDI REIT(RDI) slid close on 3% to 50.4p as it swung to a first half loss and scrapped its interim dividend amid falls in rental income and the market value of its portfolio.
Marketing services group XLMedia (XLM:AIM) rallied more than 4% to 25p, on announcing that it would reduce its headcount as part of a strategy overhaul.
XL Media did not specify how many jobs would be cut, only saying that the measures were expected to generate more than $5m of annualised savings.