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What to watch: Wetherspoon to cut jobs, B&Q sales surge on DIY boom and oil prices extend losses

Kumutha Ramanathan
·4-min read
Train leaving the city, London UK
In the UK, the market mood is more subdued as the government puts forward more stringent rules around COVID-19. Photo: Getty

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

Wetherspoon puts up to 450 jobs at risk at six UK airports

The CEO of pub chain JD Wetherspoon (JDW.L) has announced that up to 450 jobs are at risk at a number of airports across the UK.

In a statement sent to Yahoo Finance UK, JD Wetherspoon CEO John Hutson said:

“The company has written to 1,000 people employed in its pubs at six airports (Gatwick, Heathrow, Stansted, Birmingham, Edinburgh and Glasgow) to inform them that a possible 400 to 450 positions are at risk of redundancy.

“The decision is mainly a result of a downturn in trade in these pubs, linked with the large reduction in passenger numbers using the airports.”

Shares were up 0.8%.

B&Q sales surges as pandemic brings DIY boom

Kingfisher (KGF.L), owner of DIY giant B&Q, reported a surge in pre-tax profit and online sales as Brits rush to renovate their homes amid the coronavirus pandemic.

The group said in its first half results statement that while sales were down 1.1%, reflecting an adverse impact of COVID-19 in the first quarter, this was partially offset by strong recovery in Q2.

Like-for-like sales also fell 1.6% in the first quarter but growth in B&Q across Poland and Romania and a 19.5% surge in sales in the second quarter offset some of the pain.

E-commerce sales also rocketed 164% and now accounts for 19% of total group sales in the first half of 2020, as people turned to online shopping during the coronavirus lockdown.

Retail profit also rose 17.7%, largely driven by lower overall costs and B&Q performance while adjusted pre-tax profit rose 23.1%.

“We delivered a resilient financial performance in the first half of the year, with the adverse impact of COVID-19 in Q1 offset by a strong recovery in Q2. This recovery has continued into Q3 to date, with growth across all banners and categories,” said Thierry Garnier, CEO of Kingfisher.

Shares were up 6.5%

Oil prices hold losses amid COVID-19 fears

Oil prices are holding their losses on Tuesday after a steep decline for the past two weeks amid fears COVID-19 will lead to further lockdowns.

Crude (CL=F) hit around $39 (£30.80) a barrel on Tuesday at 8:45am in London, with Brent (BZ=F) at around $41. That’s after a 4.4% drop on Monday in prices amid a broader market sell-off.

People staying at home due to the coronavirus has meant less need for cars and gasoline.

The UK has already started accelerating its response to a growth in cases, with Cabinet Office minister Michael Gove on Tuesday encouraging Brits to work from home “if possible” to curb the spread of the virus.

Fears that the US could also experience another major wave of COVID-19 has damped sentiment and weighed heavily on the commodity. Prospects for more fiscal stimulus in the US amid the pandemic and the partisan battle over who will replace the late Supreme Court justice Ruth Bader Ginsburg are adding to concerns.

The anticipated reopening of Libya’s battered oil industry is fuelling further concerns for oil’s uncertain future.

European markets rebound

European stocks are generally recovering after a tough start to the week following their worst one-day performance since June on Monday.

The pan-European STOXX 600 (^STOXX) gained 0.5% on Tuesday at around 10am in London. Germany’s DAX (^GDAXI) rose by 0.9%, and France’s CAC 40 (^FCHI) was up 0.1%.

In the UK, the market mood is more subdued as the government puts forward more stringent rules around COVID-19.

UK Cabinet Office minister Michael Gove told Sky News on Tuesday morning there will be a “shift in emphasis” in the government’s working from home advice. UK prime minister Boris Johnson will also be chairing an emergency COBRA committee meeting later on Tuesday and is expected to outline the latest COVID-19 restrictions to parliament, after he raised the COVID-19 threat level to 4 from 3. This could include an announcement that people should work from home again and a 10pm curfew on pubs and restaurants.

London’s FTSE 100 (^FTSE) was down 0.03% in early trading on Tuesday.