MARKET REPORT: Footsie clocks up its best quarter for a decade as it bounces back from 25% drop at the start of the pandemicBy Frances
MARKET REPORT: Footsie clocks up its best quarter for a decade as it bounces back from 25% drop at the start of the pandemic
The FTSE 100 has clocked up its best quarter for a decade as it rebounded from the Covid crash.
London’s premier index gained 8.8 per cent in April, May and June as investors took stock of what the pandemic would mean for the global economy.
It was the best quarterly performance since mid-2010, when markets were still recovering from the financial crisis and rose by 12.8 per cent.
London’s premier index gained 8.8 per cent in April, May and June as investors took stock of what the pandemic would mean for the global economy
And it followed a staggering 25 per cent drop in value between January and March, when the disease spread to western Europe.
Shares have climbed even as normal life went into hibernation and the global death toll passed 500,000.
As well as initial panic-selling wearing off, it would indicate that investors were relieved during the last three months that government interventions such as loans, furlough schemes and money printing would stave off a sudden economic collapse. But it’s not all rosy.
Stock Watch – Redx Pharma
Biotech firm Redx Pharma climbed by 17.1pc, or 3p, to 20.5p, after announcing it will raise £24.5million.
This will be put towards paying off £5million of debt and to making further headway with drugs it is developing, including a cancer treatment that uses a patient’s own immune system to fight tumours.
AIM-listed Redx is raising some of the money from the Paris-based venture capital firm Sofinnova, which will be able to nominate a director to the board.
The Footsie is still down by around 18 per cent so far this year.
And, according to AJ Bell’s investment director Russ Mould, in June the FTSE had risen by as much as 5 per cent – but only finished the month 1.5 per cent higher, suggesting that caution is creeping back in.
The index closed 0.90 per cent lower last night, down 56.03 points, to 6169.74, as concerns about infection surges made traders jittery.
The FTSE 250 fell 0.46 per cent, or 79.5 points, to 17119.16.
Easyjet, which was recently demoted into the mid-cap index, slid 0.9 per cent, or 6.4p, to 680p as it released more detailed cost-cutting plans in which 1,900 jobs will go in the UK.
The airline has informed pilots’ union Balpa that 727 of their pilots are at risk of redundancy – and is proposing to close its bases at Stansted, Southend and Newcastle airports.
It also revealed its colourful founder has sold off more stock. In a separate update, it said Sir Stelios Haji-Ioannou and his family’s stake has gone from 33 per cent to 29.99 per cent, amid an ongoing row between the entrepreneur and the board.
Gold miner Petropavlovsk, meanwhile, sank 19 per cent, or 5.9p, to 25.1p as it suffered its third boardroom coup since 2017.
The chief executive, chairman and several other directors were flushed out in an annual general meeting vote by four shareholders in a shock move.
Petropavlovsk has asked The Takeover Panel to look into a possible breach of the takeover code by one of the shareholders, Uzhuralzoloto Group of Companies.
Petropavlovsk has recently benefited from higher gold prices. Prices rose again yesterday, hovering at around $1,800 an ounce, the highest for about eight years, as the surge in coronavirus cases is pushing investors back to safe havens.
Struggling cinema chain Cineworld advanced 5.6 per cent, or 3.22p, to 60.54p after it delayed reopening its cinemas in the UK and US until the end of July.
The company had been eyeing a July 10 relaunch.
But a combination of Hollywood pushing back blockbuster films such as Mulan and markets such as New York and Los Angeles potentially still being closed by mid-month has prompted the rethink.
Over on the AIM index, investors cheered as advertising group M&C Saatchi said the hit to trading in April and May was not as ‘severe’ as it expected.
The stock climbed by 7.8 per cent, or 3.8p, to 52.8p, as it delayed its financial results and said it is seeking a Government-backed coronavirus crisis loan.