Coronavirus slowdown hopes boost London stocks

By Devik Jain and Sruthi Shankar
·3-min read
FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain

By Devik Jain and Sruthi Shankar

(Reuters) - Britain's stock markets gained on Tuesday as signs of the coronavirus infections easing in worst-hit regions of Europe boosted gains in oil, mining and battered travel stocks.

The FTSE 100 <.FTSE> rose 2.1%, extending gains for a second session, as the hardest-hit Italy and Spain looked to relax lockdowns after steady declines in fatality rates, while the outbreak showed signs of levelling off in New York.

"The falling cases in Europe are giving investors hope that lockdown could come down in May and we could echo what's taking place in China," said Aneeka Gupta, associate director of research at WisdomTree in London.

The central city of Wuhan, the initial epicentre of the outbreak, saw no new deaths for the first time on Tuesday.

Low-cost airline Easyjet <EZJ.L> jumped 24.4%, while Carnival Corp <CCL.L> shot up 23.3% after Saudi Arabia's sovereign wealth fund disclosed an 8.2% stake in the coronavirus-hit cruise operator.

Oil majors BP <BP.L> and Royal Dutch Shell <RDSa.L> gained more than 3% on hopes that major producers including Saudi Arabia and Russia will agree to cut production soon.

The FTSE 250 midcap index surged <.FTMC> surged 5.3%, with Cineworld <CINE.L> up 36.9% after revealing it was in talks with lenders for liquidity needs as it shut all its 787 cinemas across 10 countries and suspended dividend payout.

The improving risk appetite helped the FTSE 100 recover 17% from its March low, but it still was down 25% from its January highs as experts predicted a sharp economic slump due to lockdowns.

(Graphic: UK stocks: cheapest relative valuation since 2008 link:

Stoking some uncertainty was news that UK Prime Minister Boris Johnson fought worsening coronavirus symptoms in an intensive care unit, leaving his foreign minister Dominic Raab to deputize.

Johnson's battle with the virus has shaken the British government just as the country enters what scientists say is likely to be one of the most deadly weeks of the pandemic.

"The thing that is putting market to rest is there is monetary and fiscal policy in place. But the reality is we still can't call it a bottom, it's very linked to how the COVID-19 story evolves," WisdomTree's Gupta said. Car dealership chain Inchcape <INCH.L> gained 7.6% after it scrapped its dividend and said its board and senior management would take a 20% pay cut.

Retailer WH Smith <SMWH.L> rose 1.4% after it said it was taking steps to boost liquidity by floating fresh equity and raising debt.

Online trading platform Plus500 Ltd <PLUSP.L> gained 2.1% after posting a six-fold rise in quarterly revenue, as a market sell-off drove a boom in financial betting by retail traders locked down in their homes.

(Graphic: UK stocks: cheapest relative valuation since 2008 link:

(Reporting by Devik Jain and Sruthi Shankar in Bengaluru; Editing by Bernard Orr and Arun Koyyur)