In something of a predictable move, the European markets bounced back from Monday’s colossal losses with a fairly mild rebound this Tuesday.
Climbing 0.5%, the FTSE 100 tried to muster the energy to reclaim 5850, falling just short. In a more accurate reflection of how covid-19 is impacting the UK economy, however, the FTSE 250 dipped another half a percent, reflecting the pressures on the hospitality and services sectors ahead of what is expected to be the announcement of a 10pm curfew on pubs and restaurants.
Two Tuesday updates captured the varying fortunes of UK firms on a sector-by-sector basis. Whitbread (LON:WTB) – which covers not one, but two badly hit areas with its hotel and restaurant chains – revealed it was cutting 6000 jobs after an 80% first half drop in sales. Investors sent the stock 3% lower in response.
In contrast, B&Q-owner Kingfisher (LON:KGF) blasted past first half forecasts, posting a 23% surge in adjusted pre-tax profit to £415 million – £36 million more than analysts had estimated – as like-for-like sales aggressively rebounded in Q2, climbing 19.5% after a 24.8% contraction in Q1. Crucially that momentum also has carried into Q3 (to date), with LFLs up 16.6%. This as UK customers were drawn to DIY for a variety of reasons, from turning the home into an office and/or classroom, to simply finding something to do. With investors understandably impressed by Kingfisher’s handiwork, the stock jumped close to 7%.
The Eurozone indices were most robust in their rebound than the FTSE. The DAX rose 1.2%, pushing to 12670, with the CAC back above 4800 following a 0.7% increase.
Pulling back from its peak 800-point plus decline, the Dow Jones nevertheless closed down 500 points on Monday night. And currently it has no plans to recover those losses, with the futures suggesting a flat open from the American index.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."