The country has been given the green light to go shopping, and the City today decided to follow suit.
Investors filled their baskets with retail and travel stocks amid hopes that easing of European lockdown restrictions on shopping and holidays could spark a spending spree.
Prime Minister Boris Johnson yesterday said car showrooms and outdoor retail markets can reopen on June 1, with other “non-essential” stores following on June 15. The mid-June date is two weeks later than some had expected, but shareholders appeared encouraged that Westminster saw Covid-19 as contained enough to reopen shops.
Retail stocks have been hammered since lockdown began in March.
Fashion chain JD Sports was among the biggest risers on a strong day for the FTSE 100 up 11% at 624p. Primark owner Associated British Foods — which has suffered as the chain has no online operation — rose 7% to 1800p, Next lifted 6.7% to 4890p and even struggling M&S saw shares jump 4.8% to 99p.
The reopening guidelines state that returns must be stored for 72 hours before being available for resale. “Bit of a tough one for retailer cash flow especially if shoppers have purchases they’ve been waiting to return to stores,” said GlobalData Retail research director Patrick O’Brien.
Car dealers Vertu, Pendragon and Inchcape’s shares, which have been in the slow lane since March, revved up 13% to 30p, 11% to 8.6p and 5% to 479p respectively. The pick-up in demand for driving was also helping the oil price rise $0.58 to $36.11, as the FTSE 100 rallied 93.53 points to 6086.81.
The latest instalment of James Bond films may have been delayed, but his favourite car marque Aston Martin was moving through the gears. The float flop confirmed that Mercedes-AMG boss Tobias Moers will take over from the ousted Andy Palmer in August. He will get €1 million as compensation for forfeiting awards at Mercedes. The shares stepped up 14p to 49p.
Banking giant HSBC was on the rise as new boss Noel Quinn’s cuts may be deeper than first planned. Earlier this year it said it would cut 35,000 jobs, and make reductions of up to $4.5 billion in costs. The virus outbreak is said to have made those plans more drastic, and it may jettison its US retail bank. Shareholders have already seen its dividend cut after Bank of England pressure but the stock increased 9p to 388p today.
Sir Martin Sorrell’s advertising agency S4 Capital today bought a Latin American business in a deal set to cost about $5 million to
$10 million as it moves to consolidate its positions in digital ads. Argentina-based Digodat is a digital data and analytics consultancy that will be integrated into S4C’s MightyHive division focusing on automated online ads. Sorrell said talks commenced before Covid-19. Shares gained 2.99p to 247.99p