London’s FTSE 100 traded down 55.4 points or 0.92% to 5,939.35 early on Wednesday as investors continued to fret about a potential second wave of COVID-19 infections as lockdowns ease and data showed the British economy slumped in March.
UK gross domestic product shrank 5.8% in March, although that was better than market expectations of a 7.9% contraction.
In corporate news, Ferguson (FERG), the supplier of products and services to the water and heating, ventilation and air-conditioning (HVAC) industries, firmed 2.6% to £61.22 as investors focused on its strong balance sheet and liquidity position.
Continuing to operate as an essential business with the majority of branches open, Ferguson did however withdraw guidance and reported lower third quarter revenue as ‘strong’ momentum in February and March was offset in April following a downturn in demand due to coronavirus lockdown measures.
Travel company TUI (TUI) weakened 1.8% to 259.6p after it said it needs to reduce its fixed cost base by 30% and cut thousands of jobs in a bid to stay afloat in a market weakened by the coronavirus pandemic.
The Germany-headquartered group also warned turnover would decline significantly in the current financial year, with cost savings only partly compensating for the virus-induced downturn.
Luxury carmaker Aston Martin Lagonda (AML) edged 0.4% ahead to 38.2p despite withdrawing guidance after reporting a sharp rise in first quarter losses with revenue down 60% as the COVID-19 pandemic impacted dealer demand and weighed on prices, hurting margins.
The James Bond carmaker also said it was on track to start deliveries in the summer and executive chairman Lawrence Stroll is ‘even more enthusiastic and confident in the multi-year plan that we have set out to bring new and exciting products to market to drive demand and build the Aston Martin brand’.
Enterprise software giant Sage (SGE) improved 2.6p to 657.6p as headline half year results met market expectations, albeit with a sequential slowdown in organic revenue growth in the second quarter.
Sage commented that it is still ‘too early to quantify with confidence’ the impact of the pandemic on performance for the year to 30 September, while recent trading has seen a slowdown in new customer acquisition.
Housebuilder Taylor Wimpey (TW.) ticked up 1.25p to 147.1p on news it will reopen its show homes and sales centres from next Friday amid ‘stable’ housing market conditions.
Rival homebuilder Crest Nicholson (CRST) climbed 2.8% higher to 235.4p after it said it would get a phased restart of activity on its sites underway next week and added that it had continued to see moderate sales despite shutting operations since early April.
Stock Spirits (STCK), the European spirits and liqueurs brands business with a strong balance sheet, fizzed 6.2% higher to 206p on strong first half results and a palate pleasing 5.3% rise in the half time dividend. Stock Spirits also assured investors the pandemic has had a ‘minimal impact on our operations to date’, with demand for its products remaining robust.
Lamprell (LAM) lost 9.8% at 9.5p after the oi rig assembler pulled guidance and raised concerns about its future after reporting wider losses as asset writedowns offset an uptick in revenue.
