The FTSE 100 bounced strongly on Friday, rising 4.6% to 5,389 points following gains in Asian markets overnight and expectations of more stimulus actions from around the world to combat the coronavirus pandemic.
Stocks which have been hardest hit over the last two weeks bounced back strongly with share prices in Flutter (FLTR), Whitbread (WTB) and Royal Dutch (RDSB) all up double digit percentages.
The next salvo of fiscal bazookas is expected from the US with a $1 trillion-plus package and from China which is set to unleash trillions of yuan to revive its economy.
The Chinese SSE index rallied 2% and the Korean Kospi index was up 6%. Oil prices jumped 8% with Brent crude prices at $31 per barrel and gold prices were 3% higher at $1,513 per ounce.
The pound recovered losses against the US dollar and traded up 3% to $1.18.
Cruise ship operator Carnival (CCL) said first quarter net income fell 55% which excludes impairment charges of $932m. As at 15 March 2020, cumulative advanced bookings for the remainder of 2020 are ‘meaningfully lower’ than the prior year at prices that are ‘considerably lower’, reflecting the impact from coronavirus.
In addition the company said it had used up its $3bn revolving credit facility to increase its cash position. At 29 February the firm had a total of $11.7bn of liquidity to fund ship deliveries.
The shares rallied 13% to 820p having dropped 80% over the last three months.
Shares in InterContinental Hotels (IHG) shot up 16% to £27.70 after it provided a business update. Demand is currently the lowest it has ever seen and the group is taking measures to reduce costs and preserve cash.
The firm is reducing capital expenditure by around $100m and cancelling the dividend of 85.9 cents and deferring future dividends until further notice.
Builders' merchant Travis Perkins (TPK) said it had suspended its dividend and paused the planned demerger of its Wickes DIY chain, citing the spreading coronavirus.
The company said its trading performance so far in 2020 had been as expected, with sales up 2.4% in the year to date.
However the group expects the trading environment to change quickly and materially in the coming weeks. The company’s final dividend payment for 2019 of 33p per share has also been suspended.
Bucking the positive trend today was retailer Marks & Spencer (MKS) after it scrapped its dividend and warned its annual result for the 2020 financial year could come in below its current guidance range, as the coronavirus hits its clothing unit.
The company also warned that its performance will likely be hurt in 2021, though it was too early to tell by how much.
For the year through March 2020, pre-tax profit could be at or below the bottom end the company’s £440m-to-460m guidance range. The shares dropped 4% to 111p.
Sports Direct owner Frasers (FRAS) released a statement regarding the impact from the coronavirus, saying it will cause significant disruption to its business resulting in the group missing its prior guidance of 5% to 15% EBITDA (earnings before interest, tax, depreciation and amortisation) growth. The shares were up 7% to 241.7p.
Pub chain JD Wetherspoon (JDW) pulled its interim dividend and warned it expected profit to fall short of market expectations as recent sales had fallen significantly following the spread of the virus.
In the weeks to 15 March, sales declined by 4.5% and in the early part of the current week, following prime minister Boris Johnson’s advice to avoid pubs, sales had declined at a significantly higher rate, the company said.
Most capital projects would be delayed and the interim dividend has been cancelled in an effort save costs. The shares rocketed up 18% to 662p.
