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Virus Slowdown, Dividend News Helps FTSE

Published 04/06/2020, 05:22 AM
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The new trading week started on a more optimistic note with the FTSE following the lead of its European peers and opening higher as the coronavirus spread started showing signs of levelling off.  

After weeks of weighty health news, investors were quick to grasp the opportunity to buy rather than sell, and the risers on the FTSE looked far more impressive than the losses.

Topping the tables was plane engine maker Rolls Royce (OTC:RYCEY) rallying 16% as it became the latest company to scrap its targets and give up on paying out a dividend to protect itself through the coronavirus downturn. In contrast, Legal & General (OTC:LGGNY) also rallied 16% after it said it would still pay out dividends at the end of the year despite the opposite advice from the Bank of England.  

There are still a few falling stocks on the index but their declines are all well below 1%. Among them are supermarkets, utilities and pharma companies, mostly stocks that benefitted from the extended UK lockdown.

OPEC meeting

Oil could see some volatility in the days ahead as OPEC members and Russia will discuss cutbacks in the face of evaporating global demand. The dispute between Saudi Arabia and Russia over who will produce more and who will produce less, will have to go on the backburner as the two countries face a bigger problem after Brent crude dropped below $30 in March. If OPEC+ does cut output today it is still a question of whether there is going to be much upside for oil prices, given President Trump's Thursday tweet on the topic had already caused prices to rally 30% last week.

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