Wednesday, 8 April: The FTSE 100 began the day lower following back to back sessions of gains this week. This followed mixed Asian trade and negative sessions on Wall St. Not very surprising as the appetite for risk is still capped from crippling uncertainty, positive territory for more than one session likely leaves investors feeling like they’ve shot off far too soon, like a brave runner on the Great North Run start, who takes a look around and finds comfort in the ‘safety in numbers’ philosophy. For a long time it will take some huge town halls to make a bet at where the bottom is or the correct entry point, but once that momentum feels safe it will likely gather pace quickly…..
The FTSE 250 actually outperformed the FTSE 100 again today and managed a hat-trick of gains this week, closing 1.9% higher in contrast to the FTSE 100 losing 0.5%. One of the main reasons for the lag was the hit insurers have taken from advice they’ve received to suspend dividends. Aviva, Direct Line, Hiscox and RSA (among others) have all confirmed dividend suspensions. Late last week L&G shares were bolstered after they announced they would defy advice and sustain their dividend. There remains a few like Prudential who are yet to say what they will do, but the hunt for income is becoming harder by the day.
Tesco also dropped today after stating pre-tax profit for FY20 fell on higher expenses than they’d anticipated. They expect nearly £1bn of impairment charges also on the back of the coronavirus pandemic.
In other news TUI has signed a €1.8bn state-aid bridging loan with German state-owned development bank KfW, sending shares 6% higher. ASOS shares jumped 28% after they raised £247m in equity issue, mainly allocated to existing shareholders. The online retailer has seen a recent solid recovery in their shares after being pummelled early on, with the fact they’re still trading to relatively little change likely playing in their favour with investors.
A.G Barr have provide the market with their latest trading update for the FY21, in which pre-tax profit and revenue has fallen. They also unsurprisingly expect sales to be hit from the current pandemic. The share’s moves today likely reflect the news was already very much expected by the market, as they moved 0.6% higher. Which is barely a nudge in today’s market.
Recruitment firm Robert Walters has seen Q1 gross profit down 11% from the coronavirus pandemic and expects Q2 to be even worse. Despite this, shares climbed 7% on the day recruiters faired alright. Staffline soared near 40% higher, PageGroup, Hays and SThree all jumped 5.7%.
DS Smith today reported than they will not pay the interim dividend and that directors have waived annual bonuses. Again it seems very much the standard template for company updates at the moment but we can hardly expect much else 🤷♂️. DS Smith shares closed today’s session flat.