London close: Footsie misses out on global rally as pound extends gains

A renewed push higher in Sterling and weakness in crude oil prices tripped investors up as they returned from the long bank holiday, even as analysts debated what markets' next move might be.

Investor sentiment was initially buoyed by the latest Chinese trade figures and news of falling or slowing Covid-19 case counts, alongside modest-to-slight easing of lockdown restrictions in some European countries.

The FTSE 100 finished down 0.88% at 5,791.31 as the pound added a further 0.87% against the Greenback to 1.2624, while the second-tier index fell 1.98% to 16,082.57.

In parallel, front month Brent crude oil futures traded 5.7% lower to $30.02 a barrel on the ICE.

"With no real news to drive fresh impulse", as Neil Wilson, chief market analyst at Markets.com, put it, investors were trying to anticipate the next move in stocks and how sustained or not the current rally would prove.

Given the still "very bearish" investor positioning, as per their latest monthly fund manager survey, strategists at Bank of America were telling clients that global stocks still had another leg up left in them, although their recommendation was to take profits when the S&P 500 hit the 2,850-3,000 point range.

Some analysts in the City on the other hand were saying it was "absurd" to think that stocks had already put in a bottom.

For his part, Morgan Stanley's Matthew Harrison warned that the process of reopening the US economy would be "long", but did sound a hopeful note on the prospects for a vaccine - especially for healthcare workers.

"Despite the significant concerns we raise about the path to a US recovery, we continue to believe the market is underestimating the impact the drug pipeline can have on the public policy response to the virus.

"We should stress that investors cannot afford to lose sight of the fact that only a vaccine will provide a true solution to this pandemic."

A vaccine would not be widely available until the spring of 2021 - at the earliest.

But a vaccine for healthcare workers might be available by mid-October 2020 (possibly followed by a second smaller wave of infections), he added.

Related to the above, BofA said a vaccine could trigger a so-called 'bull market', also telling clients that "V is for Vaccine", while a so-called 'credit event' whether due to the oil price crash or linked to the euro area might result in the opposite.

On home shores, the government was expected to announce on Thursday that the lockdown would be extended until 7 May, even as Austria, Italy and Spain ease some of their lockdown restrictions.

Market participants were also digesting the latest trade data out of China, which wasn’t as bad as feared.

Exports fell 6.6% in March from a year earlier, beating a consensus estimate of a 14% drop, as imports contracted by 0.9%, customs data showed. Economists had on average expected imports to drop by 9.5%.

V is for Vaccine

In UK equity markets, AstraZeneca rallied as the pharmaceuticals giant said it will start a clinical trial to gauge the potential of Calquence in the treatment of the exaggerated immune response associated with Covid-19 in severely ill patients.

Polymetal, Fresnillo and Centamin all shone as gold prices rose further, as they have historically done at similar stages of the stock market cycle.

Ultra Electronics advanced after saying it will delay the payment of its final dividend due to the outbreak, which it expects to have a "small" impact on revenue.

To the downside, InterContinental Hotels and cruise operator Carnival suffered heavy losses, while British American Tobacco was under the cosh following a report the company is under criminal investigation by US regulators over suspected sanctions-busting.

According to The Times, the Department of Justice and the Office of Foreign Assets Control are investigating "suspicions of breach of sanctions".

Transport operator National Express forfeited early gains on the back of an announcement that it was cancelling its dividend due to the virus outbreak but that it has secured £800m of additional facilities.

Market Movers

FTSE 100 (UKX) 5,791.31 -0.88%
FTSE 250 (MCX) 16,082.57 -1.98%
techMARK (TASX) 3,458.26 0.68%

FTSE 100 - Risers

Ocado Group (OCDO) 1,484.50p 8.52%
AstraZeneca (AZN) 7,606.00p 6.81%
Polymetal International (POLY) 1,609.00p 6.56%
Croda International (CRDA) 4,685.00p 6.19%
Fresnillo (FRES) 749.60p 4.93%
Reckitt Benckiser Group (RB.) 6,434.00p 4.54%
Antofagasta (ANTO) 796.60p 4.51%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,802.00p 3.92%
Scottish Mortgage Inv Trust (SMT) 626.50p 3.38%
Pearson (PSON) 538.80p 3.22%

FTSE 100 - Fallers

Taylor Wimpey (TW.) 127.20p -10.36%
Barratt Developments (BDEV) 464.30p -9.39%
Informa (INF) 426.20p -7.97%
InterContinental Hotels Group (IHG) 3,415.00p -7.95%
Compass Group (CPG) 1,255.50p -7.83%
Intermediate Capital Group (ICP) 1,011.00p -7.76%
Whitbread (WTB) 2,762.00p -6.82%
Centrica (CNA) 33.16p -6.80%
CRH (CRH) 2,240.00p -6.63%
Persimmon (PSN) 1,973.00p -6.54%

FTSE 250 - Risers

Elementis (ELM) 72.05p 14.46%
Go-Ahead Group (GOG) 1,291.00p 7.67%
Marston's (MARS) 44.00p 6.59%
Computacenter (CCC) 1,548.00p 6.10%
B&M European Value Retail S.A. (DI) (BME) 317.60p 5.83%
Kainos Group (KNOS) 713.00p 5.82%
FirstGroup (FGP) 72.70p 5.67%
Frasers Group (FRAS) 242.60p 5.11%
Games Workshop Group (GAW) 5,070.00p 4.84%
Biffa (BIFF) 200.50p 4.75%

FTSE 250 - Fallers

Cineworld Group (CINE) 63.00p -18.44%
Hiscox Limited (DI) (HSX) 842.40p -18.09%
Premier Oil (PMO) 27.67p -12.16%
Hyve Group (HYVE) 26.20p -10.73%
Apax Global Alpha Limited (APAX) 125.00p -10.71%
Wood Group (John) (WG.) 200.00p -10.59%
McCarthy & Stone (MCS) 76.50p -10.21%
Watches of Switzerland Group (WOSG) 232.00p -9.90%
PPHE Hotel Group Ltd (PPH) 1,240.00p -9.49%
Mitchells & Butlers (MAB) 201.50p -9.44%