London’s blue chip FTSE 100 index opened at 5,597.65 as the coronavirus continues to grip the world. Gains in battered travel stocks helped London’s Stock Exchange come out of a two-day slump on Thursday, while investors awaited lockdown exit plans from major economies.
The blue-chip index rose 0.4 percent by 8.16am, with easyJet gaining 7.8 percent after it said steps taken to shore up its finances will help it survive a lengthy fleet grounding during the coronavirus.
Cruise operator Carnival Plc and IAG-owned British Airways also gained more than 4.5 percent. The domestically focused midcap index rose 0.7 percent.
Asset manager Schroders rose 2.8 percent after it reported net new business of £30.4 billion, largely thanks to an influx of assets from the Scottish Widows investment mandate, offsetting a fall in total assets in first quarter.
It comes after Health Minister Matt Hancock said the outbreak is starting to peak in Britain, but it is too early to lift the lockdown.
Lockdown restrictions are expected to be extended today during a government announcement.
FTSE 100 LIVE: Stocks slid as dire economic outlook weighs
Travel stocks helped the FTSE 100 make gains
Meanwhile US President Donald Trump is expected to announce “new guidelines” for reopening the economy, where unemployment benefit claims is forecast to have surged above an astounding 20 million over the past month.
US retail sales fell the most on record last month, while manufacturing output fell by the most in 74 years, raising fears of a deep recession.
In Asia, growth will grind to zero for the first time in 60 years in 2020, the International Monetary Fund said on Thursday, as exporters are pounded by slumping demand and anti-virus measures force consumers to stay home and shops to shut down.
In Japan, where a Reuters survey showed most firms feel stimulus measures announced so far are insufficient, the Nikkei N225 fell 1.3 percent.
E-mini futures for the S&P 500 ESc1 were 0.3 percent lower following a 2.2 percent drop on Wall Street overnight.
Paul Chew, head of research at Singapore brokerage Phillip Securities, said: “It’s just a reminder of how deep the economic weakness has been.”
FOLLOW OUR LIVE UPDATES HERE:
The UK economys is under pressure as coronavirus grips the world
2.34pm update: Universal Credit claimants to receive less than they were expecting
Universal Credit claimants could receive less money than they were expecting, a senior official has admitted.
Neil Couling, change director general and senior responsible owner Universal Credit warned people who received redundancy payments or a final pay packet in the month they applied for Universal Credit may receive less than they were expecting.
He said “you can never get to 100 percent” and admitted that people may think “that’s not quite what I was expecting” when they see their first payment total.
He said new claimants may be “confused” by what they are entitled to as the department prepares to pay out for new claims from April 22.
He said: “I think there’ll be a few confused people out there for the first
couple of weeks here because they haven’t had the experience of how universal credit works before, so we are going to try to explain all of that to them.”
1.17pm update: Pound slips
The pound steadied on Thursday, slipping slightly against the dollar and euro, ahead of an expected announcement about an extension of Britain’s lockdown imposed to curb the spread of coronavirus.
Michael Hewson, chief market analyst at CMC markets said the lockdown extension was already priced into the pound. Sterling is more driven by the dollar’s strength and the euro’s potential to weaken than by domestic factors, he said.
Versus a stronger dollar, the pound was down 0.2 percent at $1.2487 . It fell slightly against the euro, to 87.20 pence .
Mr Hewson said he was “fairly bullish” on the pound against the euro, but less so versus the dollar.
He said: “(I’m) still looking to buy dips in the short to medium-term simply on the basis that it’s probably a better bet than the euro at the moment,” he said, referring to the euro zone’s problems in coordinating their response to the crisis.
“In terms of where the pound could go in the short to medium-term, it could probably drift back to around $1.225 over the course of the next few sessions but ultimately I don’t expect it to weaken profoundly and if it does it’ll only be as a result of a big rise in the value of the dollar.”
The UK economy is on the brink of a recession
12.46pm update: FTSE 100 update
The FTSE-100 index at 12:45pm was up 11.02 at 5608.67.
12.11pm update: Retail spending plumments
Figures showed retail spending plunged by more than a quarter and one in four firms stopped trading temporarily due to the coronavirus lockdown.
The British Retail Consortium (BRC) reported on Thursday a 27 percent year-on-year drop in sales in the two weeks to April 4, which included the period after the March 23 start of a lockdown that has shuttered shops other than supermarkets.
BRC chief executive Helen Dickinson said: “The closure of non-essential shops led to deserted high streets and high double-digit declines in sales which even a rise in online shopping could not compensate for.”
10.58am update: UK travel stocks a bright spot
Travel and leisure stocks were a bright spot, recovering about 0.8 percent as EasyJet said it would stay cash positive even if its fleet was grounded for nine months.
Its shares jumped 2 percent, while cruise operator Carnival Plc and IAG-owned British Airways added between 4.7 percent and 5.4 percent, respectively. The mid-cap index was flat following a 6.5 percent fall in the past two days.
Steven Holden, chief executive of Copley Fund Research in Auckland, New Zealand, said: “The UK has not been a particularly great market this year for global managers to be overweight.
“What you’re now seeing is some of the overweight position being brought down.”
The UK is on lockdown, with businesses shut down across the nation
10.20am update: EU stocks rise
The pan-European STOXX 600 index rose over 1 percent in early trade, spurred by a drop in the virus death tolls in both Spain and Italy and reassuring statements from two of the continent’s big budget airlines about their survival prospects.
9.57am update: Quarter of UK companies shut down
A quarter of companies in Britain had temporarily closed or paused trading due to the coronavirus lockdown by early April, according to a survey published by the country’s official statistics office.
The Office for National Statistics said: “For responding businesses who were still trading, an average of 21% of the workforce had been furloughed (under the terms of the UK government’s Coronavirus Job Retention Scheme).”
The survey of 5,316 businesses covered the period March 23 to April 5.
9.25am update: FTSE update
The FTSE-100 index at 9.15am was up 16.10 at 5613.75.
Chancellor Rishi Sunak is in charge of guiding the economy through the crisis
9.10am update: London stock index update
The FTSE 100 index at 8.45am was up 38.14 at 5635.79.
9am update: China stocks edge higher on global sentiment lift
China stocks ended higher on Thursday on recovering global investor sentiment, but gains were modest ahead of March-quarter GDP data that is expected to show an economic contraction for the first time in nearly 30 years.
The Shanghai Composite index closed up 0.3 percent at 2,819.94, while the blue-chip CSI300 index gained 0.1 percent, having fitted in and out of negative territory.
CSI300’s financial sector sub-index was higher by 0.1 percent, the consumer staples sector was down 0.3 percent and the healthcare sub-index edged up 0.4 percent.
The smaller Shenzhen index added 0.5 percent and the start-up board ChiNext Composite index gained by 1.6 percent.
FTSE 100: London’s stock index has risen after a two day slump
8.01am update: FTSE 100 opens
The FTSE 100 opened at 5,597.65.
7.51am update: US stock futures make gains
US stock futures extended their gains, up 0.6 percent after being down as much as 1 percent in early trading.
7.47am update: EU markets set to open in green
European stock markets are expected to open marginally higher after the number of global deaths from coronavirus surpassed 2million.
7.46am update: FTSE 100 update
The FTSE-100 index at 7.44am was unchanged at 5597.65.
7.35am update: ‘Just the beginning of painful few months’ – stark warning
David Madden, analyst at CMC Markets, offered a bleak economic outlook, saying: “As depressing as the economic indicators are, it feels like this is only the beginning of a painful few months ahead of us.
“The Beige book painted the US economy in an extremely negative light. Employment fell in all districts. The leisure, hospitality and non-essential retail sectors were the hardest hit. All districts reported very uncertain outlooks.”
7.28am update: FTSE 100 predictions
The FTSE 100 is set to start two points down 5,592 to 5,5955, according to CFD and spreadbetting firm IG Markets.
Global coronavirus death toll
7.08am update: China shares slide
China stocks fell on Thursday ahead of the release of first-quarter GDP data, which analysts widely expect will show the economy suffering its first quarterly contraction in nearly 30 years as the new coronavirus outbreak paralyses activity.
At the midday break, the Shanghai Composite index was down 0.2 percent to 2,806.46. The blue-chip CSI300 index was down 0.4 percent.
CSI300’s financial sector sub-index fell 0.3 percent, the consumer staples sector was down 0.8 percent and the healthcare sub-index slipped 0.1 percent.
Chinese H-shares listed in Hong Kong fell 0.6 percent, while the Hang Seng Index was down 0.8 percent at 23,954.81.
6.18am update: Oil slump to outlast coronavirus impact, top Bank of Canada governor prospect says
The slump in global oil prices will outlast the coronavirus outbreak and could hammer the Canadian economy for years to come, a top prospect to become the next Bank of Canada governor said.
The Organization of the Petroleum Exporting Countries, along with Russia and other producing nations – known as OPEC+ – agreed over the weekend to cut supply to try to support prices.
It came after oil prices slumped to an 18-year low in March because of slowing demand tied to the coronavirus outbreak and a surge in production following a dispute between Saudi Arabia and Russia.
“Even if the oil price war can be resolved, the collapse in global demand as a result of the pandemic suggests oil prices could be weaker for at least a few years,” said Tiff Macklem, a former senior deputy governor at the central bank and one of the names touted to be in the running to replace Governor Stephen Poloz, whose seven-year term ends in June.
“This oil price shock could certainly last longer than the virus,” Macklem told Reuters in recent comments.