Shares bounce back as governments intervene
ANXIOUS investors were offered a little respite yesterday on another topsy-turvy session on stock markets around the world.
The FTSE 100 swung in and out of the red as a slew of companies temporarily shut stores, cut jobs or revealed they were on the brink of going bust because of the impact of the coronavirus outbreak.
But a massive government stimulus effort in the US and hopes for a similar package in the UK, which was announced after markets had shut, prompted a late afternoon rally. The Footsie rose 2.8pc, or 143.82 points, to 5294.90. And on Wall Street, the Dow
Jones Industrial Average gained 5.2pc, or 1048.86 points, to 21,237.38. The rise came after the US central bank, the Federal Reserve, said it would support companies by buying up their short-term debt.
And President Donald Trump’s administration revealed it was seeking support from Congress for a £700bn spending package to help it address the economic hit the country will take as entire cities were sent into lockdown.
After UK markets were closed, Chancellor Rishi Sunak unveiled a £330bn lifeline in the form of statebacked loans for all businesses.
Major Footsie gainers included grocery delivery firm Ocado – up 10.4pc, or 128p, to 1361p – which has come into its own in the era of social isolation. Another delivery firm, Just Eat
Takeaway, climbed 10.5pc, or 625p, to 6560p as Jefferies analysts raised its rating from ‘Hold’ to ‘Buy’ on the shares. And Chilean mining group
Antofagasta surged 16.1pc, or 99.6p, to 720.2p, as it said it had cut spending to brace itself for any knock-on effects of the pandemic. It added that production was not likely to be affected. The mid-cap index, the FTSE
250, closed in the red as entertainment and travel groups such as
Cineworld (down 43pc, or 16.13p, to 21.38p) and National Express (down 33.7pc, or 66.6p, to 131.2p) were hammered as Britons were urged to avoid social contact and unnecessary travel.
Airport owner Stobart Group rose 1.3pc, or 0.5p, to 39p after it paused talks with an unnamed group that wanted to buy a 25pc stake in Southend Airport.
The negotiations apparently valued Southend at up to £800m and, in a separate update, Stobart revealed passenger numbers flying out of the Essex airport jumped 43pc to 2.1m last year.
Elsewhere, Aston Martin staged a rally unprompted by any updates from the company, with its stock rising 18.2pc, or 26.15p, to 170p.
It released its annual financial report yesterday, which showed chief executive Andy Palmer was paid £1.4m but did not receive a bonus. Peer-to-peer lending platform Funding Circle, which allows investors to lend money direct to small businesses, is lending more cash than ever before. Loans under management surged 19pc to a record £3.7bn, as revenue jumped 18pc to £167m in 2019, though losses widened to £84m, up from £51m the year before. The stock fell 11.9pc, or 4.55p, to 33.75p. Shared office space provider
IWG inched 1pc higher, up 1.45p, to 147.7p, after its chief executive Mark Dixon bought more than £3m worth of stock – at a twothirds discount to the value of IWG’s stock a month ago.
And CCTV software and hardware specialist Indigovision rocketed 117.5pc, or 208p, to 385p, as Motorola Solutions offered to buy it for £30m, offering 405p for each share – a whopping 129pc higher than the value of its stock the day before the offer was announced.
Management back the offer but have scrapped a 2p final divi.