FTSE rallies as reopening ignites hopes
Fiona Cincotta April 27, 2020 11:18 AM
A few European countries have now successfully reopened some of their businesses, open markets and schools, all of which are operating again in the less hit European countries and as of Friday three US states have allowed gyms, beauty salons and hairdressers to restart operating.
A few European countries have now successfully reopened some of their businesses, open markets and schools, all of which are operating again in the less hit European countries and as of Friday three US states have allowed gyms, beauty salons and hairdressers to restart operating. The world is now counting down the 14 day incubation period to see if case numbers and hospital admissions on both sides of the pond start will start rising again or whether this cautious step-by-step reopening really is the way out of the crisis.
On the FTSE the sectors worst hit by COVID are breathing slightly easier this morning, particularly airlines, insurers and luxury goods brands. Hopes that business will be back to normal relatively soon helped lift InterContinental Hotels, Carnival Group and Burberry to the top of the FTSE gainers.
Deutsche results lift banking sector
Banks are also trading higher after Deutsche Bank surprised with forecasts of a better-than-expected first-quarter profit despite loan loss provisions of €500m. Lloyds is trading up 3.5% and Barclays just over 3% although the volumes are slightly thinner than usual. Deutsche’s result has somewhat shaken investors’ perception that this quarter banks’ earnings will be exceptionally week. Banks like Barclays and Lloyds could end up building in loan loss provisions in the region of £1bn to protect themselves from an expected avalanche of bad loans due to follow the pandemic.
Focus on US tech
This week will be the busiest of the reporting season for US tech with all the big four – Amazon, Google, Apple and Microsoft all due to release their results. Of those, Amazon, Apple and Microsoft managed to keep their valuations above the $1 trillion mark during the crisis and only Google withdrew back to $900 million on concerns that its advertising business may take a corona-related hit.
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