UK stock markets lost their modest early gains on Monday as investors continued to mull the damage the coronavirus pandemic is having on the global economy and company earnings.

While the benchmark FTSE 100 nudged 0.5% higher in early deals, that positive momentum proved short-lived, with the UK's leading index falling 0.9% into the red at 5,737.31.

The more domestic facing FTSE 250 saw a similar reverse as oil prices collapsed again, losing 0.8% to 15,737.81.

West Texas Intermediate, the US pricing monitor, fell to its lowest in more than two decades after output cuts proved insufficient to cope with plunging demand. Futures in New York fell more than 18% to below $15 a barrel after also losing almost a fifth of their value last week as the deal by OPEC+ and other producers failed to counter the demand hit from a crippled global economy.

Elsewhere in equities, European futures are higher after mixed trading in Asia overnight.

MIXED START FOR FTSE

Leading the FTSE 100 higher was fashion stores chain Next (NXT), up 3% at £45.68, as investor sentiment was bolstered by its re-opening on online sales channels last week. Budget airline EasyJet (EZJ) was also in demand, rallying around 3% to 658.6p.

Oil stocks, miners and select industrials acted as the index’s biggest drag, with defence firm Meggitt (MGGT) and commodity suppliers Rio Tinto (RIO) and Anglo American (AAL) at the head of the loser board, off more than 2% a piece.

Mr Kilping cakes and Oxo stock cubes producer Premier Foods (PFD) soared 24% to 40.62p on announcing that it expected to report a trading profit at the top end of market expectations.

Premier Foods also announced a pensions deal that could reduce its contributions by 45%.

Furniture retailer DFS (DFS) rallied 11% to 145p as it confirmed media reports that it was in the advanced stages of negotiating £60m-to-£70m of additional debt and was also preparing for a possible equity raise.

House builder Redrow (RDW) slipped 3.6% to 394.04p, even as it announced that it had secured more debt from its lenders and also confirmed that it was eligible to tap UK government financing support.

Pub owner Marston's (MARS) firmed 3.3% to 41.58p, having agreed a waiver on its debt covenants.

Bingo hall and casino company Rank (RNK) climbed 4.5% to 174.56p after it announced that it had furloughed about 7,000 employees to save costs during the disease pandemic.

Rank said it would await more clarity on the Covid-19 situation before deciding whether to pay its next planned dividend.

Lift science research tools provider Abcam (ABC) gained 2.6% to £11.86 despite it warning on revenue, citing government imposed lockdowns hurting its performance in North America and EMEA.

SMALL CAP WRAP

Also in the pharma space, cash-strapped drug delivery technology company Midatech Pharma (MTPH:AIM) dropped 13% to 21p after it announced that it was considering a potential sale of the company as part of an ongoing strategic review.

Midatech hired Noble as a financial adviser to assist in a search for potential acquirers or partners.

IT services provider SysGroup (SYS:AIM) added 1.9% to 26.5p on forecasting its annual adjusted earnings for the year through March 2020 would double, though it warned the Covid-19 crisis could cause contract renewal delays.

Disease test kit supplier Omega Diagnostics (ODX:AIM) surged 17% to 33.25p, having signed an agreement to provide manufacturing support for a Covid-19 immunity test being developed by Mologic.

Financial services group WH Ireland (WHI:AIM) was steady at 46p as it confirmed press speculation that it was in talks to potentially acquire corporate finance assets from Cantor Fitzgerald.

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Issue Date: 20 Apr 2020