FTSE 100 trades sideways after sharp initial fall as manufacturing levels slump

• FTSE 100 index drops 127 factors
• UK manufacturing PMI falls to a report low
• “Persistent shortages might begin to drive some costs larger, notably for meals,” IHS Markit warns

10.00am: Supply chains beneath pressure

Despite an admittedly predictable dire manufacturing PMI studying for April, the Footsie is buying and selling sideways after opening sharply decrease.

London’s index of blue-chip shares was down 127 factors (2.2%) at 5,775.

“UK manufacturing suffered its worst month in recent history in April, as output, orders books and employment all fell at rates far surpassing anything seen in the PMI survey’s 28-year history. Huge swathes of industry were hit hard by company closures, weak global demand, lockdowns and social distancing measures in response to COVID-19. The only pockets of growth were seen at firms making medical and food products,” mentioned Rob Dobson, a director on the index’s compiler, IHS Markit.

“Supply-chains also felt the full force of the outbreak as average supplier delays rose to the greatest extent seen since PMI records began. International goods flows were constrained by delays in air freight, shipping and border control issues, and staff shortages often limited production,” he added.

“Inflationary pressures are remaining in check at the moment, linked to weak demand and collapsing global oil prices, but persistent shortages could start to drive some prices higher, notably for food,” Dobson warned.

Duncan Brock, the group director on the Chartered Institute of Procurement & Supply (CIPS), mentioned final month’s “dismal predictions” turned a actuality in April.

“Domestic customers deferred orders and export customers thrashed around trying to source a dwindling number of raw materials to keep their supply chains operating before finally giving up. Complicated by government edicts terminating normal business activity, UK companies were forced to put factories on lockdown anyway bringing their operations to a complete stop,” Brock mentioned.

“With the expectation of potential price rises to come, some firms resorted to stockpiling measures in an attempt to beat future supply pandemonium which only exacerbated the problem of dysfunctional supply chains. Some sectors such as food and medical supplies were able to continue but obstacles in logistics and transportation as borders closed and social restrictions were implemented meant usual activity was beyond difficult,” he added.

9.40am: Manufacturing PMI not fairly as dangerous as feared

The IHS Markit/CIPS Purchasing Managers’ Index (PMI) fell to a report low of 32.6 in April, from 47.8 in March; the consensus forecast was 31.

The fall within the Manufacturing PMI (which is a composite of 5 indices) was ameliorated by a relatively modest discount in shares of purchases and report lengthening of vendor lead instances (which has an inverse contribution to the PMI stage), the survey compiler defined.

Survey information have been collected between 7-27 April. Response levels have been just like these noticed earlier than the outbreak, IHS Markit famous.

The FTSE 100 was down 119 factors (2.1%) at 5,781 shortly after the discharge of the PMI studying.

8.45am: Weak begin earlier than weekend

The FTSE 100 opened with a triple-digit fall on the primary day of May as merchants waited nervously for the most recent month-to-month manufacturing print from the UK buying managers index.

The PMI quantity is predicted to be dire at round 33. Remember, a studying under 50 reveals contraction. So, the determine presently being touted estimate suggests a fast decline.

The index of UK blue-chips opened 146 factors decrease at 5,755.38. The Footsie misplaced over 200 factors on Thursday following one other miserable spherical of weekly unemployment information from the US; the Eurozone, in the meantime, noticed its economic system shrink at a report tempo.

Wall Street set the tone as it closed firmly in damaging territory yesterday; whereas Asia markets, led by Japan, have been additionally laborious hit at this time.

Shell’s () decline continued after Thursday’s dividend lower with its A-shares off 6%.

The mining sector was hit laborious by considerations over world development with Glencore (), down 5.5%, main the cost decrease.

Worries over worldwide journey got here again to hang-out easyJet () amid worries of a protracted lockdown. The airways’ shares have been off 4.9%.

Proactive information headlines:

() has mentioned that its coronavirus testing equipment has accomplished the final vital manufacturing milestone and stays on monitor. The diagnostics agency mentioned the take a look at has accomplished its pilot manufacturing runs and yielded excessive performing multiplexed assays for coronavirus testing. The firm is now aiming for the take a look at to obtain CE marking in round three weeks.

() has up to date on the standing of its enterprise and its response to the coronavirus pandemic. In a buying and selling replace on Friday, the detection know-how specialist mentioned regardless of the outbreak it should proceed to ship on its multi-year contracts, which it mentioned will give it “good visibility over future revenues”, including that it additionally has a wholesome pipeline of initiatives.

() has drawn consideration to a advice regarding using one of many firm’s bronchial asthma remedy formulations in Europe. In an announcement, the corporate famous that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) has adopted a constructive opinion recommending the approval of Novartis’s Enerzair Breezhaler (QVM149). Enerzair Breezhaler, which makes use of a formulation devised and licensed by Vectura, is a upkeep remedy for uncontrolled bronchial asthma in grownup sufferers.

Group PLC () has revealed that the primary consignment of ventilators it should distribute to the National Health Service (NHS) has arrived within the UK. The medical know-how firm mentioned the consignment will shortly be shipped to a holding and distribution facility managed by the Ministry of Defence. In the previous couple of days, has additionally prolonged its 24-hour helpline facility for scientific workers in any respect UK hospitals.

MaxCyte PLC () chief government Doug Doerfler has described the corporate’s £25.1mln fundraiser, which additionally marks the beginning of preparations for a NASDAQ itemizing within the US, as the beginning of a “new and exciting growth chapter” for the corporate. The situation of latest inventory priced at 131p will probably be cut up into two tranches – a £7.3mln inserting and subscriptions to herald an extra £17.8mln. The money will probably be put to work on a variety of fronts, together with serving to MaxCyte put together financially and commercially for purchasers scaling up their necessities. It will even be used to “accelerate growth and explore opportunities for new product development”, traders have been advised.

(), the developer of cleaner marine gasoline, mentioned a brand new spherical of price financial savings has given it monetary headroom till the center of subsequent 12 months. “We are happy that we’ve got been in a position to ship a fabric extension to our money runway, which is able to now take us to mid-Q2 2021,” Quadrise chairman Mike Kirk mentioned in an announcement. “This provides us the opportunity to progress our business development opportunities in earnest for over one-year – an increase of around 5 months to that forecasted at the beginning of 2020.”  

 () revealed that its portfolio agency Molendotech has raised £425,000 in an fairness funding spherical to speed up the event of its micro organism testing know-how. The funding agency mentioned, following the fundraising, Molendotech is now value £3.9mln, valuing Frontier’s personal 12.6% stake within the agency at round £493,000. Before the funding spherical, Frontier held a 14.1% stake valued at £324,000.

() revealed that it has invested US$75,000 into Union Finance, a credit score mutual constructed on Ethereum. The blockchain and cryptocurrency investor mentioned Union Finance will permit individuals and organisations to take out loans on the blockchain with out the necessity for collateral, a credit score rating, or revealing private info on a public ledger. KR1 added that it’ll obtain a yet-to-be-determined quantity of discounted tokens from its participation within the seed spherical.

Rainbow Rare Earths Limited () mentioned exercise at its Gakara mine has continued largely unhampered by restrictions imposed to fight the unfold of the coronavirus pandemic. Although overseas journey has been largely suspended into and out of Burundi, items are actually in a position to cross throughout highway borders, and the most recent export of 100 tonnes of focus reached the port of Dar-es-Salaam unhindered, Rainbow advised traders. Work continues in the direction of the completion of the corporate’s maiden JORC-compliant useful resource estimate, which is predicted to be accomplished within the coming weeks, it added.

() advised traders that the corporate is ready for an prolonged interval of low costs, and its fundamentals stay sturdy, as it reported outcomes for the 18 months to December 31, 2019, after the market shut on Thursday. “We are accelerating the exploitation of gas resources in West Rustavi and are planning the increase of oil production and exploitation of gas resources in the blocks being acquired from Schlumberger,” Block Energy chairman Philip Dimmock mentioned within the outcomes assertion. “We are confident the market will recognise our inherent value and re-rating potential.” Block Energy ended December with US$6.49mln of money, and it reported a US$6.03mln loss for the 12 months.

() mentioned it has acquired affirmation that its fund has been permitted for itemizing on the Bahamas International Stock Exchange (BISX). It has been set as much as allow Bahamas traders to take part within the firm’s exploration programme, with shares within the firm issued to the fund through subscription. The Central Bank of the Bahamas (CBB) has additionally now permitted the method by which Bahamas Petroleum will obtain subscription funds, anticipated to happen shortly after the CBB has completed vetting the traders.

() mentioned it has raised £925,000 through a share inserting to supply extra funding for its portfolio companies and extra working capital. The IP funding group mentioned it raised the funds by way of the difficulty of round 9.2mln new shares at a value of 10p every, a 13% low cost to its closing value on Thursday. The shares within the inserting will characterize round 10.54% of the enlarged share capital.

i3 Energy PLC () advised traders that it was not in a position to enter right into a reserves based mostly lending facility of other funding facility by April 30, the prolonged deadline set by noteholders again in November. Nonetheless, it mentioned that it stays in talks with all noteholders to waive this situation. The group added that it’ll replace the market as soon as these discussions have concluded.

Scancell PLC (), the developer of novel immunotherapies for the remedy of most cancers, introduced that in recognition of the influence of the coronavirus (COVID-19) disaster and to assist fund the initial analysis work to develop a vaccine for COVID-19 the members of its senior administration group have agreed to a brief 25% discount in salaries with impact from May 1, 2020. The group mentioned none of Scancell’s different workers will probably be affected. The firm additionally introduced that on April 30 it granted 1,000,000 share choices to accumulate abnormal shares within the firm to every of the members of its senior administration group – Dr John Chiplin, Dr Cliff Holloway, Professor Lindy Durrant, Dr Sally Adams, Dr Richard Goodfellow and Mr Keith Green – with an train value of 8.15p every which is able to vest twelve months from the date of the grant.

() advised traders that it continues to hunt a viable business method ahead for the Bina Bawi challenge’s oil and gasoline assets. In an announcement, the corporate mentioned it acquired documentation, together with a brand new draft manufacturing sharing contract (PSC), from the Kurdistan Regional Government (KRG) in mid-April following a business understanding reached in September. It added that the documentation requires additional negotiation, and, while these talks are ongoing, the KRG has mentioned it won’t serve discover to terminate the present PSC.

() mentioned it has seen little disruption from the coronavirus pandemic on plans to commercialise its iron deficiency drug Feraccru. Talks to discover a companion for the product within the US, the place it’s identified as Accrufer, are ongoing, it added, with vital curiosity from a spread of firms. Sales of Feraccru in Germany and the UK rose in the course of the first quarter of 2020, in keeping with the agency’s European companion Norgine, although Shield famous this was earlier than the total influence of the pandemic turned clear. Shield added, nevertheless, that it has needed to repay a €2.5mln milestone to Norgine following the outcomes of the AEGIS-H2H scientific research, which confirmed Ferracru had not met its major endpoint of non-inferiority at 12 weeks in each the “intention to treat” (ITT) and “per protocol” (PP) populations.

(), a cell engineering firm centered on commercialising the applying of gene modifying and gene modulation to speed up scientific innovation and biopharmaceutical drug improvement, has introduced the appointment of Dr Siddhartha Kadia as a non-executive director, with impact from April 30. The group additionally pronounces that Dr Susan Galbraith stood down from her place as a non-executive director with impact from the identical date. It famous that Kadia has a deep background in government administration and public firm governance throughout a spread of world companies, predominantly within the Life Sciences Tools, Diagnostics and Medical Technologies, High Tech and  TIC (Testing, Inspection and Certification) industries. He was previously president and CEO of EAG Laboratories till its acquisition by Eurofins Scientific in 2017 and continued to serve as the CEO of EAG laboratories till December 2018. Dr Ian Gilham, Horizon’s non-executive chairman commented: “We are delighted to welcome Siddhartha to the Board. He brings a wealth of US public company experience and international expertise in the life sciences tools arena across global markets with a particular emphasis on North America, Asia and Europe.” He added: ”At the same time, on behalf of my colleagues, I would like to thank Susan for her outstanding contributions and commitment to the Group since her appointment in 2014. We wish her every success in the future.”

(), the worldwide pharmaceutical and providers firm, mentioned it has appointed JPMorgan Cazenove as its nominated adviser and joint dealer with rapid impact. It added that RBC Capital Markets will proceed to behave as the corporate’s joint dealer.

() mentioned that additional to its announcement of April 9, 2020, the corporate confirms that WH Ireland has now ceased to behave as its nomad and joint dealer with rapid impact. The group added that it’s in superior discussions with a brand new nomad, which has considerably accomplished its due diligence procedures and it’ll present an extra replace shortly. The firm famous that, beneath AIM guidelines, if a brand new nomad isn’t appointed by 7am on May 29, 2020, buying and selling within the firm’s shares on AIM will probably be cancelled.

(), the exploration firm concentrating on the invention of world-class mineral deposits in Botswana, introduced that it has revealed a brand new company presentation on the company’s website. The agency mentioned it has up to date the presentation following the current profitable financing and subsequent launch of Dr David Holwell’s impartial assessment of its Kalahari Suture Zone Project. The presentation could be considered right here – https://www.kavangoresources.com/investor-relations/presentations – and Dr Holwell’s full report could be considered right here – https://www.kavangoresources.com/media/attachments/2020/04/29/mineral-systems-review-of-the-ksz-botswana.pdf.

(), the specialist small molecule drug improvement enterprise, introduced that the corporate’s digital presentation, together with the video content material, given by its CEO, Dr Tim Mitchell delivered on April 28 at BioTrinity 2020 can now be considered through the company’s website and at bit.ly/3aMVo8Z.

6.35am: Mayday, mayday

It’s Mayday, and that’s what traders in misery will probably be signalling at this time as equities look set so as to add to yesterday’s heavy losses.

Spread betting quotes counsel that the FTSE 100, which yesterday plunged 214 factors to shut at 5,901, will shed one other 86 factors on the outset to kick-off at 5,815.

US markets ended an in any other case good month in retreat yesterday after a slew of financial information that offered a little bit of a actuality examine.

The Dow Jones Industrials Average tumbled 288 factors to 24,346 and the S&P 500 fell 27 factors to 2,912. Some pundits urged there could have been some end-month profit-taking concerned in yesterday’s buying and selling.

Asian markets have been blended this morning, with Japan’s Nikkei 225 off 528 factors (2.6%) at 19,666 whereas Hong Kong’s Hang Seng index was 6 factors (0.3%) to the nice at 24,644.

“After yesterday’s raft of disappointing economic numbers from Europe and the US, attention is set to turn back to the UK economy, with the final manufacturing PMI for April, which is expected to come in at 32.8,” noticed CMC’s Michael Hewson.

“We’ll also be getting a look at the latest mortgage approvals, consumer credit and lending numbers for March. It wouldn’t be a huge surprise to see a significant drop off in all of these numbers, given the news flow that we saw in the lead up to the lockdown being announced. Mortgage approvals are expected to fall to 58k from 73.5k, which net consumer credit is expected to fall back slightly to £0.7bn,” he added.

On the corporate information entrance, Group PLC () would be the final of the FTSE 100-listed banks to publish a first-quarter buying and selling replace.

Given yesterday’s shocker from Lloyds, RBS shareholders is perhaps suggested to buckle up and put together for a bumpy experience.

The sector has lengthy been fighting Brexit woes however the coronavirus pandemic has modified the panorama utterly, with friends Barclays, Lloyds, and all posting slumps in quarterly earnings this week amid worries over mortgage defaults.

Analysts anticipate RBS to take lower than £700mln of impairments, with pre-provision earnings greater than halved to only under £1bn from the £2.2bn seen within the final quarter of 2019.

Given it introduced yesterday it had acquired a bid strategy there is perhaps extra consideration paid at this time to the full-year outcomes from cash-strapped vitality trade providers supplier, ().

The firm has indicated that underlying earnings (EBITDA) for 2019 will probably be on the larger finish of the beforehand disclosed US$48mln – US$50mln vary. Given current occasions which have rocked the oil trade, what will probably be extra curiosity is whether or not the corporate sticks with steering for the present 12 months of EBITDA within the vary of US$57mln – US$62mln.

Significant bulletins anticipated on Friday:

Trading bulletins: Group PLC ()

Finals: ()

Economic information: UK manufacturing PMI; US manufacturing PMI

Around the markets:

• Sterling: US$1.2561, down 0.33 cents
• 10-year gilt: yielding 0.225%, down 6.06 foundation factors
• Gold: US$1,691.10 an oz., down US$3.10
• Oil: US$27.01 a barrel, up 53 cents
• Bitcoin: US$8,782, down US$49

City headlines:

• 
  

  Financial Times

• PM Boris Johnson has indicated he’ll reveal a “road map” subsequent week on how the UK will strategy and finish to the lockdown
• Oil large slashed its dividend for the primary time since WWII as the coronavirus pandemic halved quarterly earnings.
• Coronavirus eradicated Lloyds Bank’s first-quarter earnings nearly utterly, as the lender introduced a 420% improve in provisions for dangerous loans.
• Finablr stage of indebtedness could also be 4 instances as excessive as beforehand reported, the corporate admitted, following an impartial investigation on the monetary providers group.
• 
  

  The Times

• Thirty million Americans have misplaced their jobs within the six weeks for the reason that coronavirus disaster struck, in keeping with the most recent authorities figures.
• posted what’s considered its strongest gross sales development since its merger 20 years in the past on the again of sturdy gross sales of disinfectants and medicines forward of presidency lockdowns.
• Wealth supervisor St James’s Place has held again £60 million of a deliberate investor payout to assist tide it over in the course of the financial downturn.
• Hospital demand for anaesthetics, sedatives and anti-infectives has boosted gross sales at Hikma Pharmaceuticals.
• British Airways might go away Gatwick airport, the place it’s the second-biggest operator, as it emerged that it’s to sack 1,100 of its pilots on statutory redundancy phrases solely.
• American Airlines reported a $2.2 billion first-quarter loss, its deepest quarterly loss for the reason that 2008 monetary disaster, as the coronavirus pandemic all however worn out demand for air journey.
• Drinks firm C&C Group has scrapped the dividend and lower salaries for employees and senior administration as a part of a seamless assault on prices.
• Manufacturing exercise in China fell again into decline in April as the pandemic crushed world demand.
• 
  

  The Daily Telegraph

• The eurozone economic system suffered its steepest quarterly contraction ever, with GDP plunging 3.8% within the first three months of 2020, as it was dealt a hammer blow by the coronavirus.
• Amazon upset traders on Thursday night time as it mentioned the coronavirus pandemic would wipe out its complete earnings for the subsequent three months regardless of skyrocketing gross sales.
• 
  

  Daily Mail

• The Covid-19 disaster is ready to price the British automotive trade greater than £8billion, an trade report predicted.
• Sainsbury’s has deferred a £160 million dividend and cancelled bonuses, saying it won’t revenue from the disaster resulting from an additional £500 million in staffing and retailer prices.
• Twitter revealed report numbers of latest accounts however swung right into a loss as the coronavirus disaster hit spending by advertisers.
• 
  

  The Guardian

• Apple reported gross sales and earnings that beat Wall Street expectations on Thursday regardless of the fallout from the coronavirus pandemic.
• Baker and takeaway chain Greggs has postponed reopening 20 retailers subsequent week, fearing crowds of consumers might collect.
• is teaming up with Oxford University to fabricate and distribute a coronavirus vaccine if scientific trials presently underway present it’s efficient.
• Oasis and Warehouse are to completely shut all their shops and on-line purchasing with the lack of greater than 1,800 jobs after they didn’t safe a rescue deal for the style chains.
• Almost 1 million holidaymakers who have been resulting from journey with Tui have had their journeys cancelled after the corporate introduced a contemporary spherical of suspensions in response to the coronavirus disaster.