London’s blue chip FTSE 100 index were up about 0.4 percent on the open as the coronavirus continues to grip the world. But the FTSE 100 quickly slipped as more firms rolled out measures to weather the coronavirus crisis amid expectations of the worst earnings season for European companies since the 2008 financial crisis.
The blue-chip FTSE 100 index edged 0.1 percent lower by 7.27am, retreating after last week’s late rally, as miners, insurers and homebuilders weighed.
The domestically focused FTSE 250 index gained 0.6 percent, helped by surge in shares of Aston Martin after its new boss Lawrence Stroll said immediate priorities will be to restart manufacturing and launch production of its crucial first sport utility vehicle.
Investors are preparing for a 22 percent plunge in first-quarter profits for companies listed on the broader European STOXX 600.
David Madden of CMC Markets, said: “A number of European countries eased some of their lockdown restrictions. Italy, Spain and Austria saw the re-opening of some businesses.
“In the grand scheme of things, the level of progress is tiny, but the message it sends out is very positive.”
But elsewhere, crude oil futures fell on Monday, with US futures touching levels not seen since 1999, amid concerns that US storage facilities will soon fill to the brim amid the coronavirus pandemic.
The oil market has been under pressure due to a spate of reports on weak fuel consumption and grim forecasts from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency.
The volume of oil held in US storage, especially at Cushing, Oklahoma, the delivery point for the U.S. West Texas Intermediate (WTI) contract, is rising as refiners throttle back activity due to slumping demand.
FTSE 100 LIVE: Crude oil futures fell on Monday
The front-month May WTI contract CLc1 was down $2.62, or 14 percent, to $15.65 a barrel by 0142GMT. At one point, the contract had fallen as much as 21 percent to hit a low of $14.47 a barrel, the lowest since March 1999.
That contract is expiring on Tuesday, and the June contract CLc2, which is becoming more actively traded, fell $1.28, or 5.1 percent, to $23.75 a barrel. Brent LCOc1 was also weaker, down 21 cents, or 0.8 percent, to $27.87 a barrel.
The plunge in crude oil prices reflects a glut at the main U.S. storage facilities at Cushing and a big drop in demand, said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“It hasn’t reach capacity but the fear is that it will,” he said, adding that once the maximum capacity is reached, producers will have to cut output.
FOLLOW OUR LIVE UPDATES HERE:
FTSE 100: London’s financial markets have been crushed
7.00pm update: Insurers in talks with Government over support for business supply chains
British insurance firms are in discussions with the Government over a backstop for trade credit insurance to support business supply chains hit by the coronavirus pandemic.
In a statement the Association of British Insurers (ABI) said: “We are discussing with the government the scope for temporary state support to ensure that businesses can continue to obtain cover that meets their needs.”
Trade credit insurance covers the risk of non-payment if a firm’s customers become insolvent.
6.20pm update: Chancellor confirms 140,000 firms have applied for grants
Chancellor Rishi Sunak said: “HMRC opened the Coronavirus Job Retention Scheme at eight o’clock this morning. As of four o’clock this afternoon, over 140,000 firms have applied and the grants they will receive will help pay the wages of more than a million people.
“A million people who if they hadn’t been furloughed would have been at risk of losing their job.
“Firms applying today should receive their cash in six working days. HMRC will continue to provide updates on the number of people furloughed.”
6.00pm update: FTSE 100 closes up 0.45 percent
The FTSE 100 closed the day up by 25.87, or 0.45 percent to 5812.8
5.45pm update: Chancellor rejects 100 percent business loan guarantee to small businesses
Chancellor Rishi Sunak has said the Government will not be offering a 100 percent guarantee to banks which lend to small businesses hit by the coronavirus.
The Bank of England has said a 100 percent guarantee, rather than the 80 percent on offer, would speed up loans to small firms facing cashflow problems.
Mr Sunak said: “I am not persuaded that moving to a 100% guarantee is the right thing to do.
“Some people have made some comparisons with what is going on in other countries.
“I think when you look at the totality of what we are doing it is more significant in scope and scale.”
5.20pm update: Up to 1 million jobs already saved in first day of furlough scheme
Chancellor Rishi Sunak has announced that the Government’s furlough job retention scheme has resulted in “more than a million” jobs across the country being saved amid the crisis.
4.50pm update: Sterling plummets against US dollar and euro after 449 more COVID-19 deaths confirmed
Sterling has fallen against the US dollar and euro after the Department for Health confirmed a further 449 people have died from COVID-19 in the past 24 hours.
At 4.30pm the exchange rate was £1-$1.2457 compared to £1-$1.2496 at the previous close.
Against Europe’s single currency €1-£0.8732 compared to €1-£0.8709 at the previous close.
Chancellor Rishi Sunak has confirmed 140,000 firms have applied for Government grants
4.15pm update: FTSE 100 firms urged to hold virtual AGMs
FTSE 100 companies have been urged to hold virtual annual general meetings (AGMs) after firms such as BAE Systems, Next and HSBC announced plans to hold events behind closed doors in response to the pandemic.
Responsible investment group ShareAction said that two-thirds of AGMs announced since the start of the pandemic will be behind closed doors.
3.40pm update: Chancellor urged to expand loan guarantees for small firms
Chancellor Rishi Sunak is under pressure to guarantee 100 percent of businesses loans for small firms during the coronavirus crisis.
The Coronavirus Business Interruption Loan Scheme (CBILS) has allowed companies to borrow money from banks, with the Government guaranteeing 80 percent of the loans.
In a letter to Mr Sunak, Shadow chancellor Anneliese Dodds said: “We face a looming insolvency crisis if uptake is not improved dramatically.
“The Government must be prepared to go further and urgently consider direct changes to the scheme, such as guaranteeing 100 percent of loans to small firms.”
3.10pm update: FTSE 100 slide continues
The FTSE 100 index at 2.45pm was down 20.24 at 5766.72.
1.52pm update: Pandemic’s eye-watering true cost for UK household revealed
UK households face a £515 a month fall in disposable income as the UK heads for a deep recession.
The Centre for Economics and Business Research (CEBR) has predicted UK households will have £43billion less cash available to them to spend on essential spending between April and June.
1.06pm update: London stock market update
The FTSE 100 index at 12.45pm was down 66.12 at 5720.84.
FTSE 100: The oil market is under pressure
12.22pm update: Gold profits up
Craig Erlam, senior market analyst, said: “Gold is off around 0.4 percent this morning as we continue to witness profit taking in the yellow metal.
“The dollar is continuing to apply downside pressure to the yellow metal and may continue to do so if risk appetite wanes in the face of weak corporate results.”
11.50am update: FTSE 100 update
The FTSE 100 index at 11.45am was down 45.97 at 5740.99.
11.34am update: UK housebuilders biggest losers
Joshua Mahony, Senior Market Analyst at IG, said: “Chief amongst the mornings losers are the UK housebuilders, with Taylor Wimpey and Barratt Developments losing ground after the latest Rightmove HPI figure highlighted both the huge decline in transactions and thus prices.
“With the index falling back into negative territory, this is clearly a buyers’ market given the economic coronavirus fallout, and difficulty in obtaining funding.”
FTSE 100: Japan’s exports have slumped
11.15am update: Virgin Atlantic won’t survive without support
Richard Branson said Virgin Atlantic will only survive the coronavirus outbreak if it gets financial support from the British government.
Virgin Atlantic last month asked the government for emergency financial help in addition to the coronavirus package made available to all British companies, but a deal has not yet been reached.
In a blog post to staff, he said: “We will do everything we can to keep the airline going but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for.
“This would be in the form of a commercial loan it wouldn’t be free money and the airline would pay it back.”
10.25am update: Furlough sceheme opens
A Government scheme for workers who have been furloughed – given a temporary leave of absence – has launched.
Chancellor Rishi Sunak has announced a £1.25 billion package to aid companies in the innovation sector.
The Coronavirus Job Retention Scheme allows businesses to claim towards staff wages and comes after the Government was warned of the economic cost for many companies of any delay in its implementation.
10.11am update: Dollar makes gains
In the currency markets, the dollar gained broadly as the concerns about global growth boosted the safe-haven appeal of the greenback and weighed on risk-oriented currencies such as the Australian dollar.
Against a basket of its rivals, the US currency rose 0.2 percent to 99.90 and edged closer towards a three-year high of near 103 hit last month.
It gained about 0.1 percent on the euro and British pound and 0.2 percent on the Japanese yen. It last bought 107.80 yen and traded at $1.2478 per pound GBP= and $1.0870 per euro.
The dollar’s gains were despite the latest trader positioning data showing investors have been ramping up their short positions or bets against the greenback.
9.18am update: London stock markets update
The FTSE-100 index at 9.15am was up 28.52 at 5815.48.
8.55am update: FTSE 100 update
The FTSE 100 index at 8.45am was up 16.28 at 5803.24.
FTSE 100: The coronavirus has crippled economies across the world
8.49am update: China stocks close on a high
China stocks ended higher on Monday as a key Chinese lending rate was cut for the second time this year to shore up the coronavirus-hit economy.
At the close, the Shanghai Composite index was up 0.5 percent at 2,852.55.
The blue-chip CSI300 index was up 0.36 percent, with its financial sector sub-index higher by 0.2 percent, the consumer staples sector up 0.38 percent, the real estate index down 0.39 percent and the healthcare sub-index up 0.7 percent.
The smaller Shenzhen index ended up 1.01 percent and the start-up board ChiNext Composite index was higher by 1.122 percent.
China cut its benchmark lending rate as expected to reduce borrowing costs for companies and prop up the economy, after it contracted for the first time in decades.
8.18am update: FTSE down
The FTSE 100 index at 8.15am was down 5.66 at 5781.30.
8.03am update: FTSE 100 opens
The FTSE 100 index opened at 5786.96.
The coronavirus continues to grip the world
7.47am update: FTSE 100 index update
The FTSE 100 index at 7:44am was unchanged at 5786.96.
7.28am update: S&P 500 rebounds
The S&P 500 has still rallied 30 percent from its March low, thanks in part to the extreme easing steps taken by the Federal Reserve. The Fed has bought nearly $1.3 trillion of Treasuries alone, and many billions of non-sovereign debt it would historically have never gone near.
Oliver Jones, a senior markets economist at Capital Economics, said: “The Fed will be a major buyer of risky assets in the coming months, and has displayed its willingness to backstop virtually any part of the domestic financial system in trouble.”
Microsoft, Apple, Amazon, Alphabet and Facebook account for more than a fifth of the index.
Mr Jones added: “What’s more, the S&P 500 is skewed towards a few ultra-large firms, some of which are also in those sectors.
“Their sheer size might make them better able to weather a few months of dramatically-low revenues than most.”
The rebound in the S&P 500 therefore likely overstated optimism on the economy, Jones argued, noting European benchmark equities indices and US small cap indices were still in bear market territory.
FTSE 100: Markets in the world have been hurt by the coronavirus
7.12am update: FTSE set for strong open
London’s blue chips are expected to open 60 points higher to 5,846.96.
6.17am update: Japan exports slump as coronavirus hits US, Chinese demand
Japan’s exports slumped the most in nearly four years in March as US-bound shipments, including cars, fell at the fastest rate since 2011, highlighting the damage the coronavirus pandemic has inflicted on global trade.
Monday’s bleak data underscored the challenges Prime Minister Shinzo Abe’s government faces in dealing with a collapse in activity that is expected to send the global economy into its deepest slump since the Great Depression of the 1930s.
After a jump in virus cases, Abe expanded a state of emergency last week to include the entire country, which gave authorities more power to push people to stay home and businesses to close. Japan has reported more than 10,000 infections and over 200 deaths.
Adding to worries the world’s third-largest economy is sliding into recession, Ministry of Finance data showed Japanese exports fell 11.7 percent in the year to March, compared with a 10.1% decrease expected by economists in a Reuters poll.
That followed a 1 percent fall in February and marked the biggest decline since July 2016, as shipments to Japan’s major export destinations from China, the United States to Europe were all battered.
(Additional reporting by Rebecca Perring)