FTSE-100 rallies sharply with BT and William Hill in the spotlight

Shares jumped nearly 2% today after two grim sessions on global stock markets with the FTSE-100 Index opening up 84 points at 5825 in early trading.

European stocks made similar gains, although much will depend on German economic data out later this morrning.

GDP data for Europe's biggest economy were expected to show a 2.2% contraction in the first quarter of the year - similar to that seen in the UK. Also as here, the previous quarter was flat, highlighting that Europe was far from booming even before the coronavirus crisis bit.

William Hill, the bookies, jumped 5% after it reported a predictably appalling impact on its business to the total absence of sport and the closure of its betting shops. Markets liked the fact that the damage doesn't seem to have been as bad as predicted. Hills, like other major UK players, has been building its operations in the US as it deregulates its betting scene there and US sports are beginning to resume. Hills had some good news on its financing as it managed to convince its banks to waive certain debt covenants. Banks have been notably lenient to companies with a fighting chance of a strong bounceback when normality resumes.

BT shares jumped 8% on reports last night that it was in talks for a partial sale of its vast Openreach engineering business. Having cut its dividend recently, such discussions would be a convenient fillip for investors. Markets would do well to treat the report with caution, however. Issues such as the Openreach pension fund and its close dependence on BT make disentangling the businesses completely tricky, although it was split in recent years to satisfy calls for it to provide better services to BT's rivals. No doubt there are some big infrastructure investors looking, but a deal seems unlikely. Particularly as directors were buying shares yesterday. If there was a deal in the offing, that would be illegal.

Traders will also take a lead from the oil price's rally yesterday following US inventories data showing stockpiles weren't as high as feared. Oil stocks might gain today as a result, although any gains may well fall as profit taking sweeps in. BP and Shell's moves have a disproportionate impact on the FTSE-100 because they are such major constituents by value compared with others on the index.

Royal Mail shares gained 1% on the shock news of chief executive Rico Black's departure. The shares had been recently being recommended by analysts including Citi as being too cheap given surging demand for at home deliveries during lockdown. Credit Suisse had been less bullish lately, however, saying Royal Mail's letters business was doing poorly.