FTSE 100 LIVE: Stock markets surge… but huge UK economy warning issued

FTSE 100 LIVE: Stock markets surge… but huge UK economy warning issued

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The FTSE 100 in London was up 1.4 percent following several weeks of struggles resulting from financial uncertainty and enforced nationwide lockdowns. Europe’s composite index, the Stoxx 600, also increased 1.4 percent in early morning trading, while Frankfurt’s Dax rose 2.2 percent. This has seen European stock markets follow the lead from their Asian counterparts, which also saw significant gains this morning. Japan’s Topix benchmark was up 1.8 percent after the country’s central bank said it would buy an unlimited amount of government bonds as part of efforts to support the world’s third largest economy.

The Bank of Japan also said it would quadruple its limit on corporate debt purchases to ¥20tn ($186bn).

China’s CSI 300 index of Shanghai increased 0.7 percent – despite gloomy figures revealing industrial company profits plunged y a third last month.

Traders said the gains across the world show investor optimism is rising around policy decisions from central banks this week, with the European Central Bank, US Federal Reserve and Bank of Japan meeting to set policy.

But this comes following a warning it could take the UK economy three years to fully recover from the fallout of the devastating coronavirus pandemic.

Forecasting group EY Item Club said it could be 2023 until the economy returns to the level reached at the end of last year.

The UK is now in the fifth week of a nationwide lockdown, and EY Item Club warned that almost half of all consumer spending in 2020 is at risk of either being delayed or lost completely.

The economists also warned GDP is set to plummet by 6.8 percent this year, before returning to positive growth of 4.5 percent in 2021.

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FTSE 100 LIVE: Global stock markets are rising in the recovery against the coronavirus pandemic (Image: GETTY)

8pm update: Airlines hit out at two-week quarantine plan

Airlines have warned the Government that its plans to impose a 14-day quarantine on passengers arriving at British airports will “kill international travel”.

They warn the move will cause immeasurable damage to the aviation industry and wider economy.

Airlines UK, the main trade body for British carriers, said: “This proposal would effectively kill international travel to and from the UK and cause immeasurable damage to the aviation industry and wider UK economy.

“Nobody is going to go on holiday if they’re not able to resume normal life for 14 days, and business travel would be severely restricted.

“It will also make it all but impossible for aviation to resume any time soon, thereby setting back the UK’s economic recovery still further.”

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FTSE 100 LIVE: The London-based index was up more than 1.5 percent at 11am (Image: GOOGLE)

6.30pm update: US to expand testing in bid to reopen economy

President Trump and US retailers are set to announce plans to expand coronavirus testing in a push to reopen the world’s biggest economy, according to Bloomberg.

5.40pm update: FTSE 100 closes higher as markets optimistic of lockdown end

The FTSE 100 closed higher on Monday as markets are more optimistic that coronavirus lockdown restrictions will soon be eased.

Britain’s blue-chip benchmark finished up over 94 points, or 1.64 percent, at 5,846.

4.56pm update: US oil plunge again

US oil prices slumped again on Monday on concerns over scarce storage capacity, especially in the United States, and global economic difficulty caused by the coronavirus pandemic.

US oil futures led losses, falling by more than $4 a barrel on fears that storage at Cushing, Oklahoma, could reach full capacity soon.

US West Texas Intermediate June futures were down $4.63, or 27.3 percent, to $12.31 a barrel at 14.06 GMT.

Brent crude was down $1.81, or 8.4 percent, at $19.63 a barrel.

3.44pm update: Markets gain as end of lockdown in sight

Equities have gained on the prospect of easing lockdown restrictions in Europe.

Joshua Mahony, Senior Market Analyst at IG, a global leader in online trading, has commented on the shift in the markets.

He said: “Stocks are rising across Europe this morning, as investors look forward to the relaxing of strict virus-control measures.

“Stocks throughout Asia and Europe have kicked off the week in optimistic fashion, with the decline in coronavirus deaths across the globe being accompanied by a significant push towards easing lockdown measures across Europe and America.”

3.08pm update: Wall Street gains as US prepares to reopen

US stock markets opened higher on Monday as more states prepared to ease the coronavirus lockdown restrictions.

The Dow Jones Industrial Average rose 90.88 points, or 0.38 percent, at the open to 23,866.15. The S&P 500 opened higher by 17.91 points, or 0.63 percent, at 2,854.65, while the Nasdaq Composite gained 83.46 points, or 0.97percent, to 8,717.98 at the opening bell.

1.34pm update: Oil losses continue as market hammered again

Oil markets are continuing on a downward spiral as the impact from the coronavirus pandemic causes more damage.

The US futures contract for June deliveries have given up a four-day gain to falle below $13 a barrel.

This has been due to increasing stockpiles, which are making it more difficult for supply cuts alone to shore up prices, as demand remains lacklustre.

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FTSE 100 LIVE: Boris Johnson ‘wants to get economy moving as fast as I can’ (Image: PA)

11.27am update: FTSE 100 group scraps special dividend

Admiral, which also owns brands including Confused.com, is suspending plans for the special payout, but this will be reviewed when the group announces its half-year results.

The insurer said: “Admiral’s board currently intends to pay this part of the final dividend later in the year unless there is a significant deterioration in the company’s financial position, trading or outlook.”

Admiral chief executive David Stephens said: “We find ourselves in extraordinary circumstances, and it has been a very difficult decision to suspend the special dividend as we are aware of the importance and impact to our shareholders and staff.

“However, the board and I believe that this is the prudent and right thing to do at this time.”

11.08am update: Market reaction to rising European stocks

Joshua Mahony, Senior Market Analyst at IG, said: “Stocks are rising across Europe this morning, as investors look forward to the relaxing of strict virus-control measures.

“Stocks throughout Asia and Europe have kicked off the week in optimistic fashion, with the decline in coronavirus deaths across the globe being accompanied by a significant push towards easing lockdown measures across Europe and America.

“Boris Johnson’s first appearance in weeks has put to bed the notion that we are on the cusp of a move to ease restrictions, with the UK still seeing the second highest numbers of deaths, second only to the US.

“Despite the prospect of further restrictions, the prospect of easing coronavirus has sparked a surge towards the heavily hit travel firms such as Carnival and Intercontinental Hotels Group.

“Expectations of major volatility giving way to more calm and serene trading. This week marks the beginning of perhaps the most important four days in Q1 earnings season, with over a quarter of the S&P 500 reporting.

“With big hitters across tech, travel, energy, and manufacturing all due to shed light on their coronavirus experiences, we will finally have a much better idea of exactly how this crisis has affected USA Inc.

“Markets have been very focused on future prosperity over current suffering, and thus it is likely that market sentiment will be guided heavily by corporate outlooks rather than just the short-term impact of the temporary lockdown measures.”

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FTSE 100 LIVE: The International Monetary Fund expects a swift recovery after COVID-19 contraction (Image: EXPRESS)

9.58am update: Boris Johnson ‘wants to get economy moving as fast as I can’ but urges caution

The Prime Minister said outside 10 Downing Street: “I know it is tough, and I want to get this economy moving as fast as I can.

“But I refuse to throw away all the effort and the sacrifice of the British people and to risk a second major outbreak and huge loss of life and the overwhelming of the NHS.”

9.52am update: Pound starts week on front foot against major currencies

The pound is up 0.27 percent against a broadly weaker dollar at $1.2424 and against the euro, has increased 0.3 percent to 87.18 pence in early London trading.

Sterling has been boosted by improving global risk appetite and hopes that lockdown measures may start to be eased.

Michael Hewson, chief market analyst at CMC Markets UK, said: “Attention will be on him, and in particular the government more broadly, to announce some sort of pathway out of lockdown, as it becomes increasingly apparent how much economic damage is being done to the UK economy.”

8.51am update: Financial analyst optimistic on early stock rises

Spreadex financial analyst Connor Campbell said: “With countries across the world – notably France, Italy, Spain, Australia and New Zealand – aiming to ease some of their lockdown measures this week or next as they try to find the ‘new normal’, the markets rebounded hard on Monday.

“Though we have no idea when the terms of lockdown will be altered, let alone ended, in the UK, the examples set by its global, and especially European, peers still sent the FTSE sharply higher.

“Climbing close to 100 points, the index neared 5850, pushing it towards a two-week peak.”

8.04am update: Adidas warns of second quarter loss

The sportswear giant has warned it could make a loss during the second quarter of this year after it missed its earnings expectations in the first three months of the year.

Adidas is expecting to make its first quarterly loss in more than four years for the second three-month period after profit plummeted 93 percent to €65million compared to a year ago.

The coronavirus pandemic is hitting the firm hard, with almost three-quarters of its global stores closed during lockdowns.

This contributed to revenue falling by nearly a fifth in the first quarter but during the current quarter, Adidas is expecting sales will fall at more than twice that rate.

Adidas chief executive Kasper Rorsted said in a statement: “Despite the current situation, I am confident about the attractive long-term prospects this industry provides for Adidas.”

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FTSE 100 LIVE: Airbus has warned it is ‘bleeding cash’ (Image: GETTY)

7.56am update: Chinese industrial sector takes massive hit as profit plummets 35 percent

China’s industrial firm saw profits plunge 34.9 percent last month compared to a year ago, the National Bureau of Statistics has warned, as the coronavirus outbreak continues to smash the country’s huge economy.

The latest figures come after China reported its first contraction in economic growth since the 1970s, with GDP falling 6.8 percent in the first quarter of this year.

7.49am update: National Australia Bank raising $2.2bn to prevent massive economy damage

The bank is raising $2.2billion in capital and slashing its dividend by almost two-thirds to protect against a huge hit to the economy from the corcoanqvirus pandemic.

NAB chief executive Ross McEwan has told investors the bank is taking steps to manage the “rapid and unprecedented upheaval” caused by the pandemic.

This has already played a large part in profits plunging by half compared to last year.

He said: “Measures to contain the spread of Covid-19 have had a sudden and materially negative impact on economic activity.

“For Australia, we expect GDP to decline 8.4 per cent by September 2020 compared to December 2019 and not return to pre-Covid19 levels until early 2022, while unemployment is expected to peak at 11.7 per cent in mid 2020.”

7.38am update: Asia-Pacific sticks begin week on the front foot

sia-Pacific stocks have been on the rise this morning, with Japan’s Topix up 0.5 percent, the Kospi in Seoul up 0.3 percent higher and Australia’s S&P/ASX 200 edging up 0.1 percent.

Brent crude was 0.9 percent higher at $21.64 a barrel, but West Texas Intermediate, the US oil marker, fell 2.3 per cent to $16.55.

7.26am update: Airbus ‘bleeding cash’ as future under threat – internal memo

The plane maker is quickly “bleeding cash” which ‘may threaten the very existence of our company”, the chief executive has told employees in a letter, the Financial Times reports.

On April 8, Airbus warned it would be slashing production by a third, but chief executive Guillaume Faury warned the workforce of 133,000 on Friday that production cuts were not the worse-case scenario for the company.

The aviation giant has already lost a third of its business in a matter of the week and the global coronavirus pandemic and enforced lockdowns blows massive holes in airlines’ revenues, making them hesitant over accepting new jets.

Mr Faury wrote: “We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company.

We must now act urgently to reduce our cash-out, restore our financial balance and, ultimately, to regain control of our destiny.”

He added the company has moved quickly to secure credit lines to adapt and resize the business.

Airbus declined to comment on the internal communication.

Paul Withers taking over live reporting from Rachel Russell.

5.57am update: Investors bet on testing, treatments for restart of US economy

Investors are pinning their hopes for the reopening of the US economy on the potential for wider availability of testing for COVID-19 cases and on drug trials for treatments of the deadly disease but said, until there is concrete progress in these areas, further stock market gains may be limited.

Much of the S&P 500’s  .SPX almost 27 percent advance above its March 23 low has been due to hopes that massive US fiscal and monetary support would dampen the economic blow from stay-at-home orders designed to contain the coronavirus pandemic.

But recently, the index has reacted to reports about trials and in particular Gilead Science’s GILD.O remdesivir experimental treatment for COVID-19, the respiratory illness caused by the new coronavirus. Remdesivir, which previously failed as a treatment for Ebola, is designed to keep a virus from replicating and overwhelming a patient’s immune system.

This volatility highlights investor impatience for indications of when state and Federal authorities might start to ease stay-at-home orders and get people back to work.

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