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Thursday update

DB Live: ‘We are past peak’ says Boris; company updates

9.30pm: US closes lower

US stocks closed lower as dismal economic data forced a reversal of recent gains.

The Dow closed 288.14 points lower (1.17%), while the S&P 500 was 0.92% weaker and the Nasdaq Composite ended the session 0.28% lower.

The main focus was the latest jobless claims report from the Labor Department, with initial jobless claims for the week ended 25 April rising another 3.83m.

5.15pm: Boris says ‘we are past the peak’ of virus

Boris Johnson today declared the UK is “past the peak of this disease and we are on the downward slope.”

Delivering his first daily briefing since his illness (pictured), he said there are “so many reasons to be hopeful” including the prospect of a vaccine from AstraZeneca.

He said he would be setting out plans next week to “get back to work”.

Concern over rising journeys on Scotland’s roads

5pm: BA may withdraw from Gatwick

British Airways, whose planes are grounded, has said it may not return to Gatwick even when the coronavirus crisis is over.

In an email to staff, Adam Carson, the airline’s managing director at Gatwick, wrote: “As you know, we suspended our Gatwick flying schedule at the start of April and there is no certainty as to when or if these services can or will return.”

On Tuesday, BA warned that the company has never seen a downturn this deep before, that a recovery would take years and that the airline needed to shrink to match the anticipated slump in demand for air travel.

The airline said it planned to lay off up to a quarter of the workforce.

According to the unions, in addition to making 12,000 people redundant, British Airways also wants its 30,000 other staff to accept less generous terms and conditions and, in many cases, lower pay.

5pm: Judicial review verdict

A judge has given the go-ahead to the businesses seeking a judicial review of the Scottish government’s business grants policy.

It is understood that the Scottish Government has been served with papers.

Full story here

4.45pm: Markets

Concern over the weakening US economy caused markets to retreat after recent strong rises. The FTSE 100 closed lower at 5,901.21 −214.04 (3.50%).

Another 3.8 million US workers filed temporary unemployment claims last week, according to data released by the Labor Department.

2.30pm: Oasis and Warehouse fail

More than 1,800 staff at retail fashion chains Oasis and Warehouse are to be made redundant after administrators were unable to rescue any parts of the business as a going concern.

The brands’ 92 shops and 437 concessions, already closed as non-essential retailers during the Covid-19 pandemic, are now closed indefinitely.

2pm: Car travel rises

First Minister Nicola Sturgeon today said a rise in traffic on the roads in the past week risked delaying the battle against coronavirus.

Full story here

Noon: Markets

Royal Dutch Shell’s dividend cut and the slump in profits at Lloyds Banking (see below) weighed on the FTSE 100 index which was down 47.68 points, or 0.8%, at 6,067.57.

The mid-cap FTSE 250 index was down 60.66 points, or 0.4%, at 16,774.68. The AIM All-Share index was up 0.4% at 816.95.

11am: Glasgow firm unveils Covid treatments

A Glasgow-based biotechnology firm has announced the discovery of two treatments for Covid-19 patients before they are put on ventilators.

ILC Therapeutics is now seeking £4 million to accelerate safety studies and clinical trials of the treatments.

The potential breakthrough comes just days after it emerged that a St Andrews University lab has developed another potential treatment for Covid sufferers. 

Full story here

8.15am: Market open

London followed Asia and US markets with an early rise in the FTSE 100 index to 6142, before settling back to 6,107.87 −7.38 (0.12%) in the first minutes of the session.

7am: Lloyds profit crashes

Lloyds Banking Group

Lloyds Banking Group, which includes Bank of Scotland, saw its profits wiped out in the first quarter as the coronavirus crisis took hold in the UK.

Profit before tax fell 95% from £1.6 billion to £74m as Lloyds took an impairment charge of £1.43bn. It expects bad loans to mount up in a worsening British economy.

Chief executive Antonio Horta-Osorio said: “The economic outlook is clearly challenging and uncertain with the longer-term outcome dependent on the severity and length of the coronavirus pandemic and the mitigating impact of government and other measures in the UK and across the world.”

Bellway back at work

Bellway said it will resume some construction work, initially on a phased basis, from 4 May after developing measures to ensure social distancing and strict guidelines for workers on its sites. 

It becomes the latest house builder to resume work south of the border, following similar decisions by Taylor Wimpey and Persimmon.

It said the initial re-start of construction works will enable it to target the sales completion of a limited number of new homes, although the extent to which this is achieved will depend upon customers’ ability to complete and the ability of the supply chain to safely support the industry.

Federation of Master Builders

Builders and plant hirers in Scotland are calling for an easing of the lockdown in Scotland to bring it into line with England.

Federation of Master Builders Scotland director Gordon Nelson said that financial problems were mounting and some firms were close to running out of cash.

Full story here

Sainsbury

Sainsbury's Bank hq

Underlying annual profit before tax was down 2% to £586 million; profit before tax up 26% to £255m.

Unlike Tesco, the board of Sainsbury said it believes it is prudent to defer any dividend payment decisions until later in the financial year.

It expects the Edinburgh-based financial services business Sainsbury’s Bank (pictured) to make a loss in the financial year to February 2021.

“Whilst this represents a very challenging trading environment, our financial services business is well capitalised.”

Shell

Royal Dutch Shell slashed its first-quarter dividend by 66% to 16 cents, saying it was “imprudent” to maintain payouts at pre-coronavirus levels with an uncertain demand outlook and oil prices at rock bottom.

It is the company’s first dividend cut since the second world war as it struggles with the plunge in oil prices and demand.

Net income attributable to shareholders on a current cost of supplies (CCS) basis excluding identified items, used as a net profit guage, plunged 46% year on year to $2.8bn.

Shell ‘A’ shares were down 3.6% to 1,432.60p in early trade.

Wetherspoon placing

Pubs group Wetherspoon raised £141m at a price of 900p per share representing a discount of 6% to the mid-market closing price of 957.5p on 29 April. The shares were placed by Investec Bank.

In an after-market announcement last night Wetherspoon announced plans to re-open pubs in June.

Full story here

John Laing

The group’s balance sheet and liquidity position remain strong, with financial resources of c£340m available at 1 April for investment opportunities.

In view of this and its continuing confidence in the business’s prospects, the board says it is appropriate to proceed with paying the 2019 final dividend of 7.66p per share (including special dividend), pending approval by shareholders at the 2020 AGM.

The board has confirmed the appointment of Ben Loomes as chief executive from 8 May.

6am: Economy to fall

UK GDP growth is expected to range fall by between 5% and 10% this year, according to analysis from PwC.

This reflects growing evidence that the short term decline in activity due to the lockdown will be greater than originally anticipated.

This is a downward shift from the previous estimate of -3% to -7% made a month ago, but a gradual recovery is still expected by the end of 2021.

4.30am: Car output slumps

Land Rover

British car manufacturers are expecting to lose output worth more than £8 billion because of the coronavirus outbreak.

The number of vehicles built fell by 37.6% in March compared to a year ago.

The sector, which made 1.3 million cars last year, faces a loss of more than 250,000 cars and vans, said the Society of Motor Manufacturers and Traders (SMMT).

Aston Martin Lagonda will reopen its Welsh factory next week and Bentley’s factory in Crewe is due for a phased restart from 11 May.

Britain’s biggest carmaker Jaguar Land Rover will restart production at one of its domestic car factories from 18 May. 

1am: Facebook engagements

Facebook

Facebook has seen an uptick in engagement with more and more customers confined to their homes. Daily users of all Facebook-owned apps was 2.36bn in March compared with 2.26bn in December.

4am: Markets

Asian stocks rose to a seven-week high on Thursday, boosted by encouraging early results from a COVID-19 treatment trial.

Optimism in equity markets was driven by positive partial results from a trial of Gilead’s antiviral remdesivir, which showed the drug could help speed recovery from COVID-19, the respiratory disease caused by the new coronavirus.

Japan’s Nikkei leapt 2.8% to a seven-week high and Australia’s ASX 200 rose 2.7%, with sentiment further supported by South Korea reporting no new domestic coronavirus cases for the first time since its 29 February peak.

Brent crude and US crude futures each rose about $2 a barrel amid optimism over storage and that demand for fuel may soon return. 

The FTSE 100 closed above 6,000 for the first time since 12 March at 6,115.25 +156.75 (2.63%).

US stocks jumped to seven-week highs on the potential COVID-19 treatment and upbeat earnings from Google-parent Alphabet boosted shares of other technology and internet giants.

The Dow Jones Industrial Average closed 2.2% higher, the S&P 500 ended up by 2.7% and the Nasdaq gained 3.6%.



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