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Bears grappled the bulls in the week that just past. The benchmark indices of the London bourse pared some gains they accumulated in earlier weeks. With the FTSE 100, the benchmark equity gauge of large-cap companies listed on LSE has declined slightly by 0.95% in the week to 5,786.96, and the broader mid-caps gauge the FTSE 250 index skidded 3.34% to 15,859.29. The FTSE AllShare which gauges movement in around 620 companies pared some gains of the previous week and declined 1.33%.
However, indices closed higher on Friday (April 17th, 2020), as market cheered the plans for a gradual reopening of the US economy and encouraging news were coming out in the possible treatment of COVID-19 virus.
On Friday, the commodity heavy FTSE 100 index surged 2.82%, encouraged by a surge in the major integrated oil companies; Royal Dutch Shell (RSDa) and BP Plc (BP) which rose around 5% and 4% respectively, though on WTD (week till date) basis these oil majors of the UK ended in red territory, down up to 10%.
Bears grappled Bulls on LSE
During the week gone by, 66 out of 100 FTSE 100 constituent stocks settled in negative territory, and 34 constituent stocks ended in the green zone. With shares of Royal Bank of Scotland Group PLC, Intermediate Capital Group PLC, JD Sports Fashion PLC, Centrica PLC, Standard Chartered PLC, Melrose Industries PLC, and Ashtead Group PLC were among top FTSE 100 laggards during the week gone by and declined in the range of 9% to 13% on a WTD basis. On the flip side, stocks of Flutter Entertainment PLC, Ocado Group PLC, AstraZeneca PLC, Rentokil Initial PLC, Halma PLC, GlaxoSmithKline PLC, Auto Trader Group PLC, Experian PLC, and Spirax-Sarco Engineering PLC are among featuring high on the FTSE 100 index and surged in the range of 5% to 15% on a WTD basis.
In the mid-cap space, 190 out of 250 constituent stocks of the FTSE 250 index settled on a negative note in the week just passed. With the shares of Petrofac Ltd, Micro Focus International PLC, Hyve Group PLC, Cineworld Group PLC, 4imprint Group PLC, Watches of Switzerland Group PLC, Hiscox Ltd, Aston Martin Lagonda Global Holdings PLC, Tui AG, J D Wetherspoon PLC, Apax Global Alpha Ltd, Mitchells & Butlers PLC, Provident Financial PLC, Ninety One PLC, and Aggreko PLC are among those tumbled between 15% to 22% on a WTD basis and dragged the FTSE 250 index 3.4% lower in the same time. Whereas, shares of Avast PLC, Biffa PLC, B&M European Value Retail SA, Genus PLC, Renishaw PLC, Domino's Pizza Group PLC, Spectris PLC, Trainline PLC, and Dunelm Group PLC have leapt higher and sported a return between 5% to 11% on a WTD basis. However, Bears outnumber bulls at the same time.
Sector overview
Despite stimulus from OPEC+ cartel who unanimously decided for oil production cut amid demand dearth for oil and oil derivatives, the FTSE 100 Energy stocks tumbled the highest during the week just flew by, followed by Air Lines and Financials (led by a sharp plunge in banking and insurance stocks). Though, Pharmaceuticals stocks bagged the highest gain during the week under consideration with AstraZeneca PLC up 12% and GlaxoSmithKline PLC up 7.5%, respectively, followed by Professional services sector up by 3.6% on a WTD basis, and food staples and retailing which bagged 2% during the period under review.
9 FTSE AllShare constituents registered 52-week highs on LSE
During the week under review, just 9 out of around 620 constituents stocks registered 52-week highs on the LSE, which include names like Ruffer Investment Company Ltd, BH Macro Ltd, Ocado Group PLC, Pershing Square Holdings Ltd, Avon Rubber PLC, IG Group Holdings PLC, Polymetal International PLC, CMC Markets PLC and Petropavlovsk PLC. On the other hand, 8 FTSE AllShare constituents registered a new 52-week low on the LSE at the same time. It includes names like River and Mercantile Group PLC, Centrica PLC, Electra Private Equity PLC, International Personal Finance PLC, VPC Specialty Lending Investments PLC, Equiniti Group PLC, SIG PLC and ASA International Group PLC respectively.
COVID-19 cases jumped from 78,991 to 108,692 in a week over a period
During the week under consideration, the total confirmed cases in the United Kingdom jumped from 73,758 cases on April 10th, 2020 to 108,692 cases on April 17th, 2020, which implies a growth rate of 47.4% on a weekly basis, however, growth was significantly lower than previous week’s growth of 93%. And, death toll surged by ~62% to 14,576 on April 17th, 2020, from 8,958 reported on April 10th, 2020. Globally total confirmed cases reached to 2,248,863 by April 17th, 2020 and death counts reached to 154,145.
However, reported cases are flattering in the United States, Italy and Spain, which are top three hit hard from COVID-19 outbreak.
Meanwhile, according to at trial result published by University of Chicago, recent clinical trial showed a significant improvement in critically ill COVID-19 patient and also reducing the recovery time. US drug maker Gilead was involved in this clinical trial.
In another development, world’s two largest vaccine manufacturer, GSK Plc and Sanofi Plc, the world's two join hand in to develop a vaccine for COVID-19. The joint venture is likely to start the trial phase the later part of 2020 and planning to launch the vaccine in 2021 subject to regulatory approval.
Week’s major event: OPEC cartel get hold of record global oil production cut deal
The oil price war ignited between Russia and Saudi Arabia about a month ago has ended after both the countries agreed on a deal to make the biggest oil production cut in history. However, the United States played a major role to fix this deal in an effort to bring oil prices to a level playfield for energy companies. The cut would be more than twice that was made during the 2008 financial crisis.
OPEC agrees to slash production by 9.7m bbl/d in May and June 2020 which is equivalent to 10% of the global supply and also said that it would continue to reduce production until April 2022 to bring stability in the oil market.
However, despite the deal related to an oil production cut, International Oil benchmark Brent Crude Oil futures significantly extended losses of the previous week by 10.8% and American Oil benchmark West Texas Intermediate (WTI) Crude oil futures touched an 18-years low of US$ 17.31/bbl on Friday and US crude oil extended the weekly losses by ~ 20% during the week just gone by.
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