Market report: Stability returns to FTSE 100 as investors take “moment of calm”

A week is a long time in markets, and each week has felt like a year of late.

But there were signs that normality was returning to equity markets this past five days, despite the chaos in US oil which saw prices briefly turn negative for the first time ever.

The FTSE 100 was in retreat, but only modestly by recent standards, off 81.80 points at 5,744.81. It followed Asian markets into the red on signs Californian biotech firm Gilead’s remdesivir Covid cure might not be the life-safer that had been hoped for.

Markets surged last week on early signs from the US that it could end symptoms of the disease but a disputed Chinese trial claimed it was not so effective on the severely ill.

The blue-chip index was down around 1.5% against the 5786 mark it ended last week, and is off 23.8% this year.

Cruise operator Carnival and British Airways owner IAG are the worst performing stocks on the Footsie this year, with metals miner Polymetal and online grocer Ocado the top risers.

Russ Mould, investment director at AJ Bell, said: “While some investors may be disappointed by the lack of a meaningful recovery, stability in the markets could be viewed as a good sign.

“A moment of calm is welcome as investors try to get their heads round the potential hit to corporate earnings and a better picture of when the world could recover from the pandemic.”

On the FTSE 100, shares in Burberry fell 34p to 1305p as it said it “will not rely on Government support” in the UK, where a third of its staff are. It is making and donating 100,000 pieces of PPE and bosses are taking a 20% pay cut.

Chief executive Marco Gobbetti and finance chief Julie Brown are donating 20% of their salary from April through June to the Burberry Foundation Community Fund. Their respective basic salaries are £1.1 million and £725,500.

Further down the High Street, Sports Direct owner Frasers said it had settled a dispute with the Belgian tax authorities. It has been contesting a thumping €674 million (£588 million) VAT bill but today said that, given the Covid crisis has forced it to shut all stores, it has settled for an “immaterial” amount. Shares were off 3% at 230p.

There was more pain for car dealer Lookers, whose forecourts are shut, as it admitted a fraud probe which forced it to delay annual results last month had led to a £4 million charge and the investigation has been widened. The stock fell 3% to 21.2p.

Jet2 owner Dart saw shares dive 18p to 594p as it took a £109 million hit related to fuel and currency hedges amid the crisis. Profits for the year to March 31 rose 49% from £265 million to £270 million.

Shares in Gem Diamonds had a little more sparkle as it said that government of Lesotho has allowed mines to reopen subject to safety guidelines.

A widespread lockdown remains in the African nation until May 5, despite no Covid-19 cases, and Gem’s Letšeng mine will reopen on Monday. Shares rose 3.4p at 39.2p