Crude surge helps shares shrug off jobless gloom
FOR the second week in a row, markets were braced for a leap in US unemployment figures.
And for the second week in a row, jaw- dropping numbers outstripped even the most dire predictions.
A record 6.65m Americans filed for help from the US Government last week, up from the previous record of 3.3m the week before, as measures to contain the coronavirus outbreak led to millions losing their jobs.
But the worrying data, which is the latest to show the US is likely to fall into a recession, was outdone by a dizzying rise in oil prices that swept global markets higher.
Over on Wall Street, the oil rally helped to send the Dow Jones higher early on, while France’s Cac 40 and Germany’s Dax both added 1pc.
The FTSE 100 closed 0.47pc up, or 25.65 points, to 5480.22, after Brent crude futures surged 23pc to $30.51 a barrel. The FTSE 250, however, fell 0.76pc, or 110.4 points, to 14436.80.
At one point, the global benchmark oil price leapt by more than 40pc, hitting $36. The jump came as Saudi Arabia and Russia got closer to a rapprochement after a price war between the two producers sent oil markets – already in freefall because of a slump in demand – into deeper turmoil.
Shell, the biggest company on the LSE, rocketed 9.4pc, or 127.2p, to 1479.6p, while BP rose 5.9pc, or 19.65p, to 353.35p. Mid- cap oilfield services firm Wood Group climbed 15.4pc, or 22.85p, to 171.4p, Premier Oil by 17.6pc, or 2.77p, to 18.5p, and, over on AIM, Hurricane Energy swept 23.4pc higher, or 2.31p, to 12.2p.
Cruise operator Carnival ended down 22.3pc, or 174p, at 605p after it raised £4.8bn in a fundraising but had to cut the amount it raised from shareholders.
This meant it had to borrow new debt at a higher cost as the firm, which owns P&O Cruises and several ships that have been struck with coronavirus cases, tries to weather the pandemic. Theoretically, after the rights issue, Carnival shares should be worth 887p.
Over-50s travel and insurance provider Saga warned that it could see profits fall by a fifth and may have to suspend all cruises and tours until 2021 under worstcase scenarios.
The group, which is asking lenders for a year’s debt holiday, saw its shares tumble 8.8pc, or 1.56p, to 16.08p last night.
National Express slumped 12.8pc, or 26.1p, to 177.9p, after announcing it will suspend all coach services on Sunday as the pandemic takes its toll on the domestic transport industry. UBS brokers took an axe to
Rolls-Royce’s target price, which they halved from 664p to 328p amid a downgrade from ‘buy’ to ‘neutral’. Analysts believe the engineer will be one of the worst hit in the aerospace sector because it makes a significant portion from its income from plane maintenance and other services provided to airlines, which have largely grounded their fleets. Rolls-Royce tumbled 8.8pc, or 26.7p, to 278.3p.
Hikma Pharmaceuticals, however, rose 5.8pc, or 120p, to 2178p after JP Morgan upgraded it to ‘overweight’ after a legal victory in the US over a generic drug.
And board hires received a mixed reception at Centamin and Domino’s Pizza.
Centamin, the largest gold miner in Egypt, rose 4.2pc, or 4.95p, to 123.8p after it appointed Toro Gold founder Martin Horgan as chief executive.
But the pizza delivery company shares fell 2.2pc, or 6.2p, to 282.8p, after it hired former Ei Group finance boss Neil Smith as interim chief financial officer.
Former finance head David Bauernfeind drowned on Boxing Day while on holiday in Mauritius.