(Reuters) – London’s FTSE 100 headed higher on Tuesday as a batch of upbeat quarterly earnings updates outweighed concerns about a slower economic recovery as countries balance reopening businesses with avoiding a potential jump in COVID-19 cases.
The blue-chip FTSE 100 (FTSE) gained 0.5%, with Vodafone (L:VOD), the world’s second largest mobile operator, jumping 6.3% to the top of the index after meeting full-year profit expectations and saying it was seeing significant increases in data volumes.
Home improvement group Kingfisher (L:KGF) said underlying sales had turned positive in the first week of May as more of its stores re-opened from coronavirus lockdowns.
“It’s a market of two extremes: a, saying the market has run ahead of fundamentals, and b, we’ve got unprecedented amounts of stimulus,” said Max Kettner, multi-asset strategist at HSBC Global Research.
“From here, it probably is very difficult to imagine new lows in equities. (But) if we get a second wave of infections, if we do get much more evidence that it won’t be a V-shaped recovery, that’s probably a big downside risk for equity markets.”
After rallying in April on historic global stimulus and hopes of a pick up in business activity, the FTSE 100 has struggled to build on its gains in May as countries such as Germany and South Korea report a surge in COVID-19 infections after easing lockdowns.
In the UK, which has one of the world’s highest official COVID-19 death tolls, Prime Minister Boris Johnson set out a cautious reopening plan that includes a staged easing of restrictions and a 14-day quarantine for most international arrivals.
With economists forecasting the deepest UK recession in 2020 in 300 years, all eyes will now be on first-quarter GDP figures for the country due Wednesday.
“A risk-off mode continues to permeate on the back of secondary spreader fears and grim economic data expectations,” said Stephen Innes, chief global markets strategist at AxiCorp.
“But no one has been paying up for any COVID-19 market insurance as yet, via gold or other safe havens.”
Supermarket group Morrisons (L:MRW) added 3% after reporting a jump in group like-for-like sales in its latest quarter, with demand boosted by the country’s coronavirus lockdown.
Asset manager Standard Life Aberdeen (L:SLA) rose 3.6% after reporting estimated total assets of 490 billion pounds (about $600 billion) at end-April and saying it was making progress towards its cost savings targets.
On the other hand, property developer Land Securities (L:LAND) slumped 11.2% to the bottom of the FTSE 100 as it reported an annual pretax loss of more than $1 billion.