UK markets open in 5 hours 34 minutes

What to Watch: Sports Direct owner and Travis Perkins sound coronavirus alarm

Tom Belger
Finance and policy reporter
A branch of Sports Direct in London. (Isabel Infantes/EMPICS Entertainment)

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Sports Direct owner warns on earnings over coronavirus

Fraser Group (FRAS.L), which owns Sports Direct, House of Fraser and other UK retailers, has warned investors it will not hit its earnings targets over the coronavirus outbreak.

It had previously expected growth of 5% to 15% in earnings growth in its financial year to 26 April. It said it is no longer giving formal guidance because of the scale of uncertainty.

“The board expects that Covid-19 will cause significant disruption to its business, including reducing customer footfall,” it said in an update on Friday.

Travis Perkins suspends dividends on ‘considerable disruption’ fears

The Travis Perkins Group (TPK.L) has suspended a final dividend payout to shareholders it had proposed earlier this month. It blamed current uncertainty levels and “considerable disruption” to the economy and particularly construction.

The planned Wickes de-merger will also be paused “in light of current extreme stock market volatility.”

It said it would cut costs if footfall drops or the government enforces a shutdown of stores, but said trading had “yet shown a significant sales impact” from the pandemic. Its brands Toolstation and Wickes had seen “solid trading” since the start of the year, sending its shares soaring more than 11%.

European markets rebound on stimulus measures

European stocks climbed on Friday as investors appraised the potential impact of government and central bank measures, hoping they will be enough to shield the global economy from a coronavirus-related recession.

Markets on Thursday reacted positively to new measures from both the ECB and Bank of England, while Norway’s central bank on Friday slashed its main interest rate by 75 basis points.

Meanwhile, UK chancellor Rishi Sunak is soon expected to announce a rescue plan to protect millions of jobs, including an employment and wage subsidy package.

Read more: UK government set to announce worker wage package rescue plan

The pan-European STOXX 600 index (^STOXX) climbed by around 4%. London’s FTSE 100 (^FTSE) rose by around 3%.

Germany’s DAX (^GDAXI) was up by around 5%, while France’s CAC 40 (^FCHI) was 4.7% in the green.

China’s SSE Composite Index (^SSEC) rose by more than 1.6% on Friday, while the Hang Seng (^HSI) was up by more than 5% in Hong Kong at market close.

What to expect in the US

Futures were also pointing to a higher open for US stocks, after the Federal Reserve on Wednesday announced a fund that will provide loans to financial institutions that buy assets from prime money market funds.

S&P 500 futures (ES=F) climbed by around 3.7%, Dow Jones Industrial Average futures (YM=F) rose by more than 4%, while Nasdaq futures (NQ=F) were up by more than 4.6% on Friday.