UK markets closed

FTSE 100 locks third day of gains as Wall Street mood improves

By Sruthi Shankar and Devik Jain
People walk past the London Stock Exchange Group offices in the City of London, Britain

By Sruthi Shankar and Devik Jain

(Reuters) - A strong bounce on Wall Street helped Britain's stock markets recover from early losses on Thursday, as shocking economic data from across the world due to the coronavirus pandemic fed into expectations of more stimulus actions.

After falling as much as 3% during the midday, the blue-chip FTSE 100 <.FTSE> closed 2.2% higher, recording its first three-day gain since the coronavirus crisis started hitting equity markets in February. Midcap stocks <.FTMC> rose 3.8%, gaining for the fifth straight session.

Data showed a staggering 3.3 million people filed for U.S. unemployment benefits last week as lockdown brought economic activity to a sudden halt, while British retail sales stagnated in February, even before shops shuttered.

The rest of Europe also saw weak numbers, hit by the pandemic.

However, Wall Street rallied more than 4% as investors hoped for further aid from the U.S. government, including a $2.2 trillion coronavirus relief bill that lawmakers are expected to pass on Friday.

"With the U.S. markets in high spirits, Europe was able to edge into the green," said Connor Campbell, financial analyst at SpreadEx in London.

The Bank of England said on Thursday it was ready to ramp up its bond-buying programme further if needed. Separately, finance minister Rishi Sunak said that self-employed people will receive a taxable grant of 80% of their average monthly profits as part of coronavirus support package.

However, analysts are skeptical about the strength of the stock markets' recovery, with the main FTSE 100 still down about 25% from its January peak.

"Investors should plan for headlines describing large declines in GDP, stark rises in unemployment, and waning confidence numbers," Peter Essele, head of portfolio management for Commonwealth Financial Network, wrote in a client note.

"It's quite possible that this week will be seen as the calm before the storm."

Mall operator Intu Plc <INTUP.L> declined 6.4% after saying it would seek debt waivers from its lenders and aid from the government's coronavirus support schemes as the health crisis hit rents.

Fellow real estate firm British Land <BLND.L> dropped 3.8% forecasting March rent deferrals of around 40 million pounds.

Britain's financial regulators have already announced measures to give companies more time to publish results and banks more leeway for handling troubled loans.

Lender Non-Standard Finance <NSF.L> slid 3.2% after saying it had reduced lending volumes across its divisions to preserve cash.

Electricals retailer Dixons Carphone <DC.L> jumped 12.5% and aerospace engineer Senior Plc <SNR.L> gained 1.2% even as they warned of a hit to earnings due to the pandemic.



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