Aston Martin to axe 500 jobs, Pennon increases dividend

London open

The FTSE 100 is expected to open 36 points lower on Thursday, having closed up 2.61% at 6,382.41.

Stocks to watch

Luxury car marker Aston Martin said it was axing up to 500 jobs as it cut back production of front-engined sports cars and focus on its DBX sports utility model. The company on Thursday said its restructuring plan would save £18m a year in operating and manufacturing costs and £10m in capital expenditure. “Aston Martin continues to take decisive action in other areas to reduce cost and remove non-critical expenditure from the business at every level including in areas such as contractor numbers, site footprint, marketing and travel.costs,” the company said in a statement.

Pennon increased its annual dividend by 6.6% but halved its target for dividend growth as the water company set aside almost £9m for bad debts from Covid-19.The FTSE 100 utility declared a final dividend of 30.11p taking the annual payout to 43.77p, up from 41.06p a year earlier. Pretax profit for the year to the end of March from continuing operations fell to £193.1m from £201.4m as underlying revenue from continuing operations rose to £636.7m from £632.6m. Pennon took a provision of £9m for expected credit losses caused by the Covid-19 crisis.

Newspaper round-up

The US will bar Chinese passenger carriers from flying to the United States starting on 16 June as it pressures Beijing to allow US air carriers to resume flights, the Trump administration announced on Wednesday. The move, announced by the Department of Transportation, penalizes China after Beijing failed to comply with an existing agreement on flights between the world’s two largest economies. Relations between the two countries have also soured in recent months amid escalating tensions surrounding the coronavirus pandemic. – Guardian

Rolls-Royce has announced the locations of its first 3,000 redundancies in the UK, as the jet-engine manufacturer makes deep cuts to its civil aerospace business in response to the coronavirus pandemic. The company last month announced it would cut 9,000 jobs across its global operations because of expectations of lower demand for air travel using its engines for years to come. – Guardian

HSBC's top executive in Asia has been condemned by democracy campaigners after backing a new Hong Kong security law that hands sweeping powers to the Communist regime in Beijing. Asisa-Pacific boss Peter Wong broke years of political neutrality at the London-listed bank by signing a petition in favour of the change - despite warnings from protesters and human rights groups that it will spell the end of the city's independence and trigger a brutal crackdown on dissent. – Telegraph

British Airways could be stripped of prized landing slots at Heathrow airport because it is cutting staff while still taking advantage of the taxpayer-backed furlough scheme, a minister has suggested. Officials will review whether they can intervene in slot allocations at Europe’s busiest airport as BA plans to slash 12,000 jobs, Kelly Tolhurst, the aviation minister, told MPs. Warnings of state intervention drew a sharp rebuke from the airline’s boss Alex Cruz. Addressing staff, he said: “Every slot lost will lead to jobs in BA being permanently lost.” – Telegraph

The Bank of England will today name 60 businesses, including several of the country’s 20 biggest, that have tapped the state for £19 billion of coronavirus corporate financing, a cheap loan scheme for non-financial companies in need of cash. The list will raise questions about whether multinationals, many of which use legitimate tax avoidance schemes to pad their profits, should be banned or subjected to tougher anti-avoidance conditions. – The Times

US close

Wall Street stocks closed higher once again on Wednesday, as major indices rallied on growing optimism regarding the reopening of several US states.

At the closing bell, the Dow Jones Industrial Average was up 2.05% at 26,269.89, the S&P 500 added 1.36% to 3,122.87, and the Nasdaq Composite was 0.78% firmer at 9,682.91.

The Dow had opened 274.87 points higher, carrying on its rally from the previous session after market participants remained optimistic about the reopening of the US economy despite a wave of civil unrest spreading across the country.

As far as Wednesday was concerned, investors were zoned in on the latest set of private-sector employment figures from Automatic Data Processing.

The report revealed US firms shed another 2.76m jobs throughout May as a result of the ongoing Covid-19 pandemic - with losses particularly pronounced at larger business, which reported a decline of more than 1.6m.

Traders also remained focussed on a wave of protests across the US as a result of the death of George Floyd, an unarmed African-American man, in Minneapolis last week under the knee of a white police officer.

However, with protests becoming more peaceful after several US cities, including New York City, imposed curfews on their citizens, hopes of reopening the economy have offset many other investor worries.