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July 1, 2020, 11:33 a.m. EDT

FTSE struggles for gains after another dire warning over the economy

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By Barbara Kollmeyer, MarketWatch


Getty Images
A man walks down a near empty shopping street during lockdown on July 01, 2020 in Leicester, England. Ten percent of all the recent UKs Covid-19 deaths occurred in Leicester, which became the first British city to be put into regional lockdown on Tuesday night.

London stocks carved out modest gains on Wednesday, as the British Chambers of Commerce called for “swift, substantial and immediate action," to deal with a historic setback revealed in its quarterly economic survey.

The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.09%  rose 0.2% to 6,184.51, after a 9% gain in the second quarter, the biggest percentage gain since 2010. Positive support came from oil names as crude prices rose. Shares of BP /zigman2/quotes/207305210/composite BP -2.79% /zigman2/quotes/202286639/delayed UK:BP -2.71%  rose 2% and Royal Dutch Shell Group /zigman2/quotes/205095589/composite RDS.A -2.46%   /zigman2/quotes/207682964/composite RDS.B -2.55%  rose 2.5%.

Shares of Smith & Nephew PLC /zigman2/quotes/207176500/delayed UK:SN +2.96%  climbed 4% after the medical-technology business said that, while underlying revenue is expected to fall 29% in the second quarter, it was seeing improved performances as the quarter progressed.

Shares of J. Sainsbury PLC /zigman2/quotes/206038250/delayed UK:SBRY +0.24%  fell even as retail sales excluding fuel rose in the first quarter of fiscal 2020, boosted by strong growth in e-commerce.

Meanwhile, a survey from the British Chambers of  Commerce revealed that U.K. economic conditions  deteriorated at an unprecedented rate  in the second quarter due to the pandemic. Eleven of  the 14  key  service-sector indicators hit their lowest level in the survey’s 31-year  history.

Read: Five things to know about Leicester — the U.K. city that’s key to preventing a second wave of coronavirus infections

The  percentage of companies reporting  higher domestic and export sales is now sharply below that of the worst quarter of the 2008-09 recession, while indicators for longer-term business performance dropped to record lows. The survey covered 7,700 firms that employ over 580,000 people in the U.K. 

The service sector was hit particularly hard, manufacturing saw demand collapse, and a slump in cash flow remains a big concern, the survey showed. “The government has one chance to jump-start the economy and business confidence over the coming weeks — and they must take it,” said Adam Marshall, director general of the group.

U.K. Prime Minister Boris Johnson on Tuesday presented the outlines of the government’s plan to boost the economy. Critics of the plan noted that much of the £5 billion, or $6 billion, he announced was part of projects already in the pipeline. Chancellor of the Exchequer Rishi Sunak will in a few days outline a budget strategy

/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,032.18
+5.24 +0.09%
Volume: 524,159
Aug. 7, 2020 4:39p
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/zigman2/quotes/207305210/composite
US : U.S.: NYSE
$ 22.61
-0.65 -2.79%
Volume: 5.85M
Aug. 7, 2020 11:54a
P/E Ratio
18.92
Dividend Yield
9.59%
Market Cap
$78.00 billion
Rev. per Employee
$4.03M
loading...
/zigman2/quotes/202286639/delayed
UK : U.K.: London
287.25 p
-8.00 -2.71%
Volume: 28.18M
Aug. 7, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
11.17%
Market Cap
£59.35 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/205095589/composite
US : U.S.: NYSE
$ 30.48
-0.77 -2.46%
Volume: 1.92M
Aug. 7, 2020 11:54a
P/E Ratio
N/A
Dividend Yield
7.02%
Market Cap
$118.38 billion
Rev. per Employee
$4.75M
loading...
/zigman2/quotes/207682964/composite
US : U.S.: NYSE
$ 29.02
-0.76 -2.55%
Volume: 1.03M
Aug. 7, 2020 11:54a
P/E Ratio
N/A
Dividend Yield
8.68%
Market Cap
$118.38 billion
Rev. per Employee
$4.75M
loading...
/zigman2/quotes/207176500/delayed
UK : U.K.: London
1,581.00 p
+45.50 +2.96%
Volume: 1.27M
Aug. 7, 2020 4:35p
P/E Ratio
44.61
Dividend Yield
1.81%
Market Cap
£13.43 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/206038250/delayed
UK : U.K.: London
189.45 p
+0.45 +0.24%
Volume: 4.39M
Aug. 7, 2020 4:35p
P/E Ratio
32.50
Dividend Yield
1.74%
Market Cap
£4.19 billion
Rev. per Employee
N/A
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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