Portfolio

London open: Stocks edge higher but Hong Kong tensions weigh

By Michele Maatouk

Date: Thursday 28 May 2020

London open: Stocks edge higher but Hong Kong tensions weigh

(Sharecast News) - London stocks edged higher in early trade on Thursday as optimism over lockdown easing was tempered by growing tensions in Hong Kong.
At 0840 BST, the FTSE 100 was up 0.3% at 6,164.51.

Spreadex analyst Connor Campbell said: "Ireland and the Netherlands are the latest European countries to eye reopening; the former is potentially looking to accelerate plans next week, while the latter has brought forward easing-measures to July 1st, two months ahead of initially planned. That joins the UK's retail intentions for June 1st and 15th, and the potential for the lifting of some travel restrictions in Spain and Germany.

"All this comes with a pretty massive warning, however. In Italy and South Korea, two of the countries a fair few steps ahead of everyone else, the number of coronavirus cases post-easing have increased day-on-day, with Korea even considering a return to restrictions due to the spike."

Stocks were already coming off opening highs after China's parliament approved the imposition of national security legislation on Hong Kong, sparking concerns over an already-tense situation in HK and souring relations between the US and China.

In equity markets, easyJet flew higher after it announced plans to cut about 4,500 jobs, or 30% of its workforce, as the airline prepares to restart flying with a smaller fleet and reduced demand as a result of the Covid-19 crisis. The company said booking trends on resumed flights are encouraging and demand for summer is increasing from a low base, while winter bookings are well ahead of a year earlier, including customers rebooking cancelled flights.

Cineworld surged as it said it had secured fresh funding from its lenders and that it expects to reopen cinemas in all territories by July.

Public transport operator FirstGroup and bus operator Stagecoach both rallied following upgrades to 'buy' and 'hold' respectively at HSBC.

Stagecoach said it expects full-year adjusted earnings per share of between 12.5p and 14p as it reported an increase in available liquidity to deal with the coronavirus impact.

FirstGroup said it had generated more cash than expected in the first month of the new financial year as coronavirus lockdown measures started to ease.

Heat treatment and thermal processing company Bodycote was also in the black even as it said it was is cutting more than 700 jobs and closing factories after underlying revenue fell by more than a third in April because of the Covid-19 shutdown.

Flexible office space provider IWG was a high riser after it raised £320m in a placing "to take advantage of growth opportunities and strengthen the group's global leadership position".

On the downside, Rolls-Royce slumped after AKO Capital sold 96.7m shares in the aerospace and defence giant via a bookbuild to institutional investors at 318p each.

Diageo was knocked lower by a downgrade to 'neutral' at Citi, while Signature Aviation was hit by a downgrade to 'sell' at Berenberg.

Market Movers

FTSE 100 (UKX) 6,164.51 0.33%
FTSE 250 (MCX) 17,226.54 0.48%
techMARK (TASX) 3,701.35 0.49%

FTSE 100 - Risers

M&G (MNG) 149.90p 7.07%
Melrose Industries (MRO) 125.40p 5.69%
easyJet (EZJ) 738.80p 4.26%
Informa (INF) 475.80p 2.68%
Carnival (CCL) 1,228.00p 2.68%
International Consolidated Airlines Group SA (CDI) (IAG) 254.90p 2.49%
Intermediate Capital Group (ICP) 1,275.00p 2.49%
Barclays (BARC) 122.66p 2.35%
Standard Life Aberdeen (SLA) 272.40p 2.25%
Lloyds Banking Group (LLOY) 32.52p 2.23%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 325.20p -6.04%
Meggitt (MGGT) 295.50p -3.05%
HSBC Holdings (HSBA) 387.05p -2.41%
3i Group (III) 828.80p -2.01%
Standard Chartered (STAN) 404.10p -1.77%
DCC (DCC) 6,696.00p -1.53%
Diageo (DGE) 2,884.50p -1.16%
Berkeley Group Holdings (The) (BKG) 4,020.00p -1.11%
British Land Company (BLND) 403.50p -1.10%
Imperial Brands (IMB) 1,502.50p -1.09%

FTSE 250 - Risers

Cineworld Group (CINE) 92.50p 19.69%
IWG (IWG) 285.20p 9.61%
Bodycote (BOY) 633.50p 7.28%
PayPoint (PAY) 769.00p 6.51%
Hyve Group (HYVE) 111.00p 6.02%
Virgin Money UK (VMUK) 104.95p 4.97%
FirstGroup (FGP) 59.55p 4.84%
Aston Martin Lagonda Global Holdings (AML) 52.80p 4.04%
Rank Group (RNK) 139.80p 3.40%
Mitchells & Butlers (MAB) 189.20p 3.39%

FTSE 250 - Fallers

Micro Focus International (MCRO) 415.20p -4.95%
Signature Aviation (SIG) 243.20p -3.80%
G4S (GFS) 93.06p -2.76%
IG Group Holdings (IGG) 749.50p -2.66%
LXI Reit (LXI) 108.20p -2.35%
AVI Global Trust (AGT) 642.00p -2.13%
TR Property Inv Trust (TRY) 332.00p -2.06%
Energean Oil & Gas (ENOG) 537.00p -2.01%
Just Group (JUST) 53.35p -1.84%
Lancashire Holdings Limited (LRE) 691.50p -1.78%

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