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FTSE 350 Review: How Covid-19 is impacting the UK's biggest companies

The sectors holding their own against the virus
April 8, 2020

Two months on from our annual FTSE 350 review and the market has been turned on its head. The seismic shocks delivered to the UK’s economy and stock market by the coronavirus pandemic have rendered our recent review redundant – corporate actions that would have seemed unthinkable at the time of that review are now commonplace. Our companies team has therefore returned to examine the outlook for the 350 largest companies in the UK, all of which, in one way or another, are heavily impacted by the crisis.

Crunch-time for the income majors

 

Banks face capital test

The banking sector might not be quite as wrapped up in this market sell-off as it was the last one, but the outlook is nevertheless gloomy. Alex Newman examines here.

 

Oil and gas suffer Covid crunch

The crushing impacts of a surge in oil supply, alongside the dwindling demand from a world in lockdown are panful for the UK’s oil and gas giants. Dividends remain intact for now, but this is a precarious time for oil and gas companies, according to Alex Hamer.

Property income prospects dimmed by Covid-19

Commercial property groups were already facing immense pressure on their rental income streams long before Covid-19 reared its head, according to Emma Powell. The outlook for the sector is now even more gloomy.

 

Miners hold onto their hats

Falling prices for most commodities – bar gold – could have put a dampener on the prospects for the UK’s miners. Alex Hamer explains why most are looking fighting fit.

 

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Can we rely on defensive sectors?

Utilities: Resilience amid the chaos

In times of uncertainty, utility companies can often provide a safe haven for investors. Nilushi Karunaratne examines whether that is true during the coronavirus sell-off.

Pharma giants enter the testing fray

Diagnostics are in the spotlight as the world attempts to shed light on the coronavirus. But drugs companies can play their part as well, as Harriet Clarfelt explains.

Are telcos still defensive?

Telecoms companies plummeted in line with the wider market sell-off in March, which perhaps undermines the traditional view of the sector as defensive. Although that could reflect the debt of UK’s two telecom giants, rather than the sector as a whole. Lauren Almeida explains.

 

Wobbles in finance

Insurers stuck between policies and politics

The UK’s insurers have varying exposure to coronavirus claims, but the sector as a whole and its dividends are on shaky ground.

Financial services: few guarantees

Financial services stocks tend to have an above-average beta, which means their price moves are more volatile than the broader market, explains Alex Newman. Here’s how the current volatility is impacting the sector.

 

Consumer markets in lockdown

Food, drugs and soap in high demand

March 2020 was the biggest month of grocery sales ever recorded in the UK as Brits stocked up on food, toilet roll and soap. Harriet explains how the food and consumer goods producers are coping.

 

General retail: coronavirus slams high-street doors shut

The nation’s high streets are in a sorry state as the UK wallows in lockdown. Alex Janiaud explains how general retailers are dealing with the carnage.

 

Home renovations on hold

Property owners are certainly not rushing to refurbish their homes while the nation is in lockdown. The impact on household goods and home construction companies is therefore stark.

Supermarkets thrive but coronavirus harms other personal goods

Coronavirus has driven sales to record highs at UK supermarkets, although most personal goods retailers have suffered.

Software: subscription-based models make for sturdy businesses

Software offers a rare glimmer of good news amid the gloom of coronavirus. But the sector is by no means immune to the wider crisis, writes Lauren Almeida.

Virus wrecks UK leisure time

Lockdown is tough for all of us. Companies in the travel and leisure sector are really feeling the pain.

 

Upending the cycle of cyclicals

Industrials braced for a downturn

The eclectic mix of businesses in the UK’s engineering and industrials market was preparing for a better year when 2020 started with some respite in the US/China trade war. Nilushi explains why Covid-19 has disrupted any progress.

Electronics supply under threat

Electronics and hardware companies haven’t faced the same existential threats posed by coronavirus as other sectors. But pressure on supply and demand has still weight on the sector’s shares, as Alex Janiaud explains.

Aerospace on the descent as defence stays on course

With Covid-19 wreaking havoc on international travel, the woes of the airlines are having knock-on effects for aerospace companies. But things are more stable in the defence industry. Nilushi examines the fallout here.  

Construction hits the brakes

After limping through a Brexit-induced slowdown last year, the construction industry entered 2020 with a renewed sense of optimism. Coronavirus has made the short-lived, says Nilushi.

Downturn threat obscures outlook for outsourcers

The outlook for the companies which rely on construction and manufacturing outlook – so often blurred by impairments and restructuring – is about to get even murkier.