19 May, 2020 08:49 19 May, 2020 08:55

London open: Stocks edge up as travel sector rallies; unemployment claims surge

London stocks were a little firmer in early trade on Tuesday as investors weighed up a massive jump in UK unemployment claims against hopes of a coronavirus vaccine and optimism over lockdown easing, which continued to underpin the travel sector.

At 0845 BST, the FTSE 100 was up 0.3% at 6,068.78, having surged a day earlier on news of a potential vaccine by US biotechnology company Moderna.

Data out earlier from the Office for National Statistics showed the UK claimant count rose by 856,000 on the month in April, to 2.1m people. Unemployment increased by 50,000 to 1.35m in the three months to March as the coronavirus began to take its toll, while the unemployment rate fell to 3.9% from 4.0%, coming in below expectations of 4.4%.

Spreadex analyst Connor Campbell said: "It has taken a while to filter through, but now the UK is starting to see the same kind of horrific jobs data as the US. After ducking the expected ballooning of unemployment claims in March, April reflected the fact that the pain was merely delayed by a month.

"The pound took all this rather well. Against the dollar it rose 0.4%, to a near one-week peak of $1.2244, while against the euro it was up 0.3% to €1.12."

In equity markets, travel stocks were the top performers again, with British Airways owner IAG, budget airline easyJet and cruise operator Carnival all higher.

DCC was also on the front foot after the marketing and support services company increased its final dividend as it reported a rise in annual profit and "robust" trading in April and May.

Insurer Beazley advanced after saying it had raised £247m in a placing at 315p per share - a 4.9% discount to the closing share price on Monday - "to support ongoing organic growth".

Micro Focus gained after saying it expects to report an 11% drop in first-half revenue, in line with the guidance it gave in February.

On the downside, tobacco giant Imperial Brands was under the cosh after it slashed its dividend by a third as it tried to speed up debt reduction and strengthen its balance sheet, although it did not cite the coronavirus as a reason. The interim dividend was cut to 41.7p a share from 62.56p a year ago, implying an annual payout of 137.7p. Adjusted operating profit fell 7.7% to £1.47bn.

Catering group Compass was in the red after saying it was raising £2bn of equity from investors to strengthen its finances after the Covid-19 shutdown caused revenue to almost halve in April.

Chilean copper miner Antofagasta was weaker as it announced it was cutting its 2019 final dividend in light of the pandemic and the measures taken to slow its spread.

Market Movers

FTSE 100 (UKX)6,068.780.33%
FTSE 250 (MCX)16,426.301.21%
techMARK (TASX)3,718.750.89%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG)204.90p8.90%
easyJet (EZJ)579.40p5.04%
Melrose Industries (MRO)98.34p4.62%
DCC (DCC)6,244.00p4.34%
M&G (MNG)122.20p3.78%
Informa (INF)448.50p3.58%
Pearson (PSON)452.90p3.10%
JD Sports Fashion (JD.)558.80p2.46%
Meggitt (MGGT)276.50p2.37%
Lloyds Banking Group (LLOY)30.34p2.21%