FTSE 100 LIVE: European shares DROP as Trump's China fury sparks market chaos

FTSE 100 LIVE: European shares DROP as Trump's China fury sparks market chaos

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Later on Friday, the US President is due to announce his policy moves that could escalate tensions between Washington and Beijing. The pan-European STOXX 600 index fell by nearly a percentage point shortly after opening this morning. Cars and parts makers led the declines with a 2.5 percent fall, while the travel & leisure and banks both fell more than two percent.

The FTSE 100 fell for the first time this week, down 0.8 percent with travel, industrial and personal goods stocks among the top decliners.

The mid-cap FTSE 250 shed 0.7 percent to snap a nine-day winning streak.

The FTSE 100 had crashed more than 36 percent from a record high in January as the true impact of the coronavirus pandemic on world economies started to become evident.

But it has recovered around 26 percent since mid-March and is still on track for its biggest two-month gains in a decade.

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FTSE 100 LIVE: Global stocks plummeted on Friday

FTSE 100 LIVE: Global stocks plummeted on Friday (Image: GETTY)

4pm update: FTSE-100 down 128.80

The FTSE-100 index at 3:45pm was down 128.80 at 6089.99.

3.50pm update: S&P 500 and Dow dip ahead of Trump’s China response

The S&P 500 and the Dow Jones Industrial Average have dropped ahead of a US response to China’s plans for a security law in Hong Kong.

US President Donald Trump is expected to make an announcement later.

Cantor Fitzgerald analyst Sachin Raghavan said: “Tensions between the world’s two largest economies are as high as they’ve been in memory, higher than last year’s trade war that was economically focused.”

3pm update: FTSE-100 down 91.20

The FTSE-100 index at 2:45pm was down 91.20 at 6127.59.

2.45pm update: easyJet and Carnival poised to exit FTSE 100

Budget airline easyJet and cruise operator Carnival are set to drop out of the FTSE 100 after being hit by coronavirus travel restrictions.

Both firms have more than halved in value over the past three months despite a slight lift in recent weeks amid optimism over relaxing measures.

They could be joined on their way out by aerospace parts firm Meggitt and British Gas owner Centrica, in what could be the biggest reshuffle since the 2008 financial crisis.

Helal Miah, investment research analyst at the Share Centre, said: “This reshuffle looks set to be one of the biggest in many years, we expect a minimum of four in, four out – but depending on market moves we could see more.”

2pm update: FTSE-100 down 63.93

The FTSE-100 index at 1:45pm was down 63.93 at 6154.86.

12.18pm update: Eurozone inflation sinks to lowest level in four years

Price growth in the Eurozone has fallen 0.1 percent in May – it’s lowest level in four years – raising fears the European economy is sliding into deflation.

Inflation rates turned negative in 12 of the 19 countries this month and will build pressure on the European Central Bank to inject more monetary stimulus into the struggling economy.

Price growth differed in Europe’s largest economies, with inflation of 0.5 per cent in Germany, 0.2 per cent in France and one per cent in the Netherlands.

But prices did fall 0.9 in Spain and 0.2 percent in Italy.

12pm update: Eurozone company borrowing hit €73bn in April

Banks lending to Eurozone companies increased by €73bn last month, driving up money supply by the fastest rate since the financial crisis in 2008.

The latest figures come following a record €121bn increase in Eurozone company borrowing in March.

Lending to non-financial corporations increased 6.6 year-on-year in April – up from 5.5 percent from the month before.

But lending to households fell three percent in April, having already fallen 3.4 percent in March.

11am update: Italy’s economy suffers largest quarterly hit on record

Italy’s economy shrank 5.3 percent during the first three months of this year and at the fastest pace in more than 20 years.

The fall in GDP was revised down from the 4.7 percent contraction in preliminary estimates, which is the largest fall since records began in 1996.

The figures from Istat, the office for national statistics show Italian investment fell 8.1 per cent in the first quarter of 2020.

eurozone economy

Eurozone inflation sank to its lowest level in four years in May (Image: GETTY)

10.15am update: Pound plummets to two-month low against euro as currency pressure increases

Sterling has fallen to a two-month low against the euro as uncertainty over Brexit talks and speculation about negative interest rates continue to weigh heavily on the currency.

The pound lost 0.5 percent at 90.30 pence against the euro – reaching its lowest level since March 27.

Against the US dollar, the British currency fell 0.2 percent to $1.2298.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank said in a note to clients: “The medium-term outlook remains negative for sterling as the no-deal Brexit anxieties will likely curb the appetite before the 1.25/1.2515 area.”

9.20am update: FTSE 100 falls for first time this week

London’s stock index suffered its first fall this week as fears over the US response to China tightening controls over Hong Kong continue to impact market.

The blue-chip FTSE 100 was down 0.8 percent with travel , industrial and personal goods stocks among the top decliners.

The mid-cap FTSE 250 shed 0.7% to snap a nine-day winning streak.

The FTSE 100 had crashed more than 36 percent from a record high in January as the true impact odf the coronavirus pandemic on world economies started to become evident.

But it has recovered around 26 percent since mid-March and is still on track for its biggest two-month gains in a decade.

8.15am update: German retail sales fell 5.3 percent last month

Retail sales in Germany dropped by 5.3 percent in April, but showed Europe’s biggest economy suffered a much smaller drop in activity during the coronavirus pandemic than many of its European neighbours.

Data for April released this week showed retail sales in France plummeted 20.2 percent in France and nosedived 31.6 percent in Spain.

The Office for National Statistics said the volume of retail sales in the UK fell by 18.1 percent in April.

Germany’s federal statistics agency said retail turnover dropped 5.3 percent last month in April from the previous month on a calendar and seasonally adjusted basis.

This was down 6.5 percent compared to the same month in the previous year.

renault job losses

Ranult has announced plans to cut 14,600 jobs and shrink production as part of a €2bn cost cutting programme (Image: GETTY)

7.30am update: Renault to slash nearly 15,000 jobs as part of €2bn cost cutting plan

Renault has announced plans to cut 14,600 jobs, shrink production and restructure a number of its factories in France as part of a €2bn cost cutting programme.

The huge job cuts will be based on “based on retraining, internal mobility and voluntary departures”, with 4,600 of those jobs being lost in France. Renault employs more than 180,000 people around the world.

The carmaker is looking to achieve the huge savings over the next three years, while cutting its global production capacity from four million vehicles in 2019 to 3.3 million in 2024.

Renault is also beginning talks with various unions as part of plans to re-purpose manufacturing plants in France, some of which may stop making cars altogether, and will also involve more jobs being lost.

The future if six sites, including at Flins and Dieppe, remains undecided.

7am update: Japan’s industrial production sinks to historic lows

Japan’s industrial production plummeted to a historic low in April and much worse than forecast as the full impact of the coronavirus crisis becomes evident.

Production fell by 9.1 percent compared to April – the worst decline since the current data series began in 2013 and way below analyst estimates of a 5.1 percent drop.

The coronavirus pandemic has had a huge impact on manufacturing, with several production lines suspended, with a rapid rebound seeming increasingly unlikely.

But the labour market data did offer some signs of encouragement, with the unemployment rate rising by just 0.1 percent to 2.6 percent last month.

6.08am update: Some sectors of Australian economy will need additional support – Prime Minister Morrison

Some sectors of Australia’s economy will require additional stimulus, Prime Minister Scott Morrison said on Friday.

To prevent a prolonged economic depression triggered by COVID-19, Australia’s government and central bank has pledged to spend A$250 billion ($166.1 billion).

Much of Australia’s stimulus is expected to expire in September, but Morrison said some additional support may be needed.

Additional reporting by Paul Withers.

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