FTSE 100 LIVE: UK economy suffers biggest fall in 40 YEARS – ONS lifts cover on huge blow

FTSE 100 LIVE: UK economy suffers biggest fall in 40 YEARS – ONS lifts cover on huge blow

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Jonathan Athow, deputy national statistician at the ONS, said a more detailed picture of the economy in the first quarter showed GDP shrank more than originally estimated. He said: “This is now the largest quarterly fall since 1979.”

He continued: “Information from Government showed health activities declined more than we previously showed.

“All main sectors of the economy shrank significantly in March as the effects of the pandemic hit.

“The sharp fall in consumer spending at the end of March led to a notable increase in households’ savings.”

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FTSE 100 LIVE: Global stocks rose on Tuesday

FTSE 100 LIVE: Global stocks rose on Tuesday (Image: GETTY)

2.45pm update:  FTSE down 73.61

The FTSE-100 index is down 73.61 at 6152.16.

2.30pm update: Wall Street braced for early losses

Wall Street was set to open lower today as coronavirus-related worries and simmering US-China tensions weighed on sentiment at the end of what is expected to be the S&P 500’s best quarter since 1998.

The benchmark index has rebounded about 18 percent since April thanks to fiscal and monetary stimulus and the easing of COVID-19 restrictions but is still down about 5 percent year-on-year as a resurgence in virus cases fuels fears of a new round of lockdowns.

With California and Texas marking a record spike in cases yesterday, investors are counting on more stimulus to shore up the domestic economy.

Stephen Innes, markets strategist at AxiCorp, said: “While traders remain curiously cautious waiting for the next catalyst, they are also keeping risk on a short leash into the long weekend.

“COVID-19 de-risking playbooks are still in play and investors are not aggressively buying dips while booking profit quickly.”

1.45pm update: FTSE down 56.70

The FTSE-100 index is down 56.70 at 6169.07.

1.22pm update: European shares bounce back from early falls

European shares picked up today after getting off to a shaky start, extending the optimism of the Asian session, as oil prices steadied and investors looked for signs of an economic recovery in the second half of 2020.

The MSCI world equity index, which tracks shares in 49 countries, was up about 0.1percent just before 12pm after Asian shares rose on strong data from the US housing market and Chinese factories.

European shares continued the rally.

Neil Jones, head of FX sales at Mizuho Bank, said: “Asset markets are looking beyond COVID stats.

“There’s some expectation of containment and then, further down the line, an expectation of some form of measure to combat the virus.”

European shares edged up, with the Euro STOXX 600 up 0.1 percent having been relatively range-bound for the past two weeks. Germany’s DAX was up 0.3 percent.

12.45pm update: FTSE down 24.17

The FTSE-100 index is down 24.17 at 6201.60.

12.33pm update: Hotel giant counts costs of coronavirus pandemic

Holiday Inn owner Intercontinental Hotels Group (IHG) said it expects revenue to have more than halved over the past six months after being hammered by coronavirus.

The hotel giant said it also expects to report a 75 percent fall in revenue per available room for the quarter to the end of June after sites were forced to close during the lockdown.

Hotels in England have been given the green light to reopen this Saturday 4 after shutting their doors in March.

The group, which qualified for £600 million from the Government’s Covid corporate financing facility (CCFF), said it had around £1.63 billion in available liquidity and has already made progress in reducing costs and capital expenditure.

IHG said it remains on track to reduce business costs by around £122 million for the year, with more than two-thirds of these savings set to be delivered in the second half of 2020.

Shares in the company slipped by 0.8 percent to 3.618p in early trading today.

Holiday Inn

Holiday Inn owner IHG expects revenue to be halved this year (Image: PA)

11.59am update: German coach firm prepares for UK launch

Germany’s biggest coach company will launch in the UK later this week as travel companies around the world struggle with the consequences of government lockdowns.

Flixbus will run four routes, all starting in London, as it launches its first ever domestic routes in Britain.

FlixBus’s UK managing director Andreas Schorling said: “It’s a very interesting time, not just in the transportation industry, but in general.

“However, we have been planning to launch in the UK for quite a long time.”

It marks a delayed launch in Britain for the bus giant, which had originally been intending to start running its four routes earlier this spring before the pandemic paused its plans.

The first buses will connect London with Portsmouth, Bristol, Birmingham, and Guildford.

FlixBus’s entry into the UK marks a serious new challenge for the biggest British coach companies, including National Express and Megabus, as the fast-growing company pledged to be a “market leader” in Britain by the middle of the decade.

11.45am update: FTSE down 26.36

The FTSE-100 index is down 26.36 at 6199.41.

Flixbus

Flixbus is preparing to launch in the UK (Image: PA)

11.17am update: Emerging stocks show signs of recovery

Developing world stocks edged up today an looked set for their best quarter since 2009 as improving economic readings raised hopes of a quicker global economic recovery from the coronavirus crisis.

The MSCI’s index of emerging market equities rose about 0.5 percent after a four-session losing streak, and was set to end the quarter about 17.7 percent higher, its best performance since September 2009.

The gains come after a nearly 24 percent drop in the first quarter of 2020.

But while some improving economic readings from the US and China had helped risk appetite, a recent spike in new infections brought about fresh caution.

Charalambos Pissouros, senior market analyst at JFD Group, said: “On one hand, further loosening of lockdown measures around most of the world may allow economies to continue their road to recovery.

“But on the other hand, the re-introduction of restrictions may result in a second hit to the global economy, and thereby bring equity indexes and risk-linked assets back under renewed selling pressure.”

10.45am update: FTSE down 38.08

The FTSE-100 index is down 38.08 at 6187.69.

10.22am update: Treasury reveals eyewatering cost of furlough scheme

Britain has spent more than £25bn on the that is supporting 9.3 million jobs, new figures show.

The Treasury said claims under its Job Retention Scheme – which pays 80 perent of salary costs for furloughed staff – had risen to £25.5bn as of June 28 from £22.9bn the week before.

Banks have lent small businesses £29.5bn in 100 percent state-backed loans, up about £1.5bn from the previous week.

Larger firms have received £11.1bn from the Government’s main lending scheme, with the biggest companies getting an extra £2.3bn.

Rishi Sunak

Rishi Sunak’s furlough scheme has paid out £25.5bn so far (Image: PA)

9.45am update: FTSE down 56.10

The FTSE-100 index is down 56.10 at 6169.67.

9.39am update: European shares fail to mirror Asian optimism

European shares edged down, oil fell and the dollar erased some gains on today with little of the optimism of the Asian session extending into early London trading, as markets took stock at the end of the first half of 2020.

The MSCI world equity index, which tracks shares in 49 countries, was up about 0.1 percent at 9.30am after Asian shares rose on strong data from the US housing market and Chinese factories.

World shares are down around 8 percent so far this year, having slumped as much as 35 percent between February 20 and March 23 in the most destructive sell-off since the Great Depression.

But the world equity index is up 17.5 percent this quarter – on track for its biggest quarterly gain since the third quarter of 2009.

Rising COVID-19 cases continue to show signs of a second deadly wave of the pandemic, but markets still expect a global economic recovery with lockdown measures easing.

9.13am update: Engineering giant announces job cuts

Engineering giant Smiths Group said it will cut jobs as part of a major restructure aimed at slashing costs across the business.

The FTSE 100 firm said it hopes the restructuring will improve margins and deliver £70 million in benefits each year from 2022.

It came as the group announced a 1 percent rise in underlying revenue for the four months to May 31, on the back of good momentum from the first half and “strong order-books” at the start of the pandemic.

8.45am update: FTSE down 28.65 at 6197.12

The FTSE-100 index is down 28.65 at 6197.12.

8.27am update: FTSE 100 falls amid fresh lockdown fears

The FTSE 100 was down early doors amid growing fears of another coronavirus lockdown.

The 0.3 percent fall took the shine off one of the strongest quarters for British stocks since the global financial crisis.

Oil giant Shell was among the biggest losers after it said it would write down the value of its assets by more than £17bn on a lower outlook for oil and gas prices.

The mid-cap FTSE 250 reversed small gains at the open to trade down 0.1 percent. Auto, banks and energy firms were among the biggest decliners in early trading.

Homebuilder Redrow tumbled 5.6 percent to the bottom of the FTSE 250 after saying it expected its turnover to drop more than a third this year.

Coronavirus

Fresh coronavirus lockdown fears have spooked the FTSE-100 (Image: GETTY)

8.01am update: FTSE opens unchanged at 6225.77.

The FTSE-100 index opened unchanged at 6225.77.

7.50pm update: Shell braced for £17.9bn impairment charge hit

Oil giant Shell said it expected to be hit with £17.9 billion in impairment charges for the current quarter after lowering its expectations for oil and gas prices.

The British-Dutch firm predicted that it will book an impairment of between £12.2 billion and £17.9 billion after commodity prices were hit by coronavirus and the Saudi-Russia price war.

Shell also said that it expects oil production to be higher than previously predicted, saying it hopes to produce between 2.3 million and 2.4 million barrels of oil per day.

7.45am update: FTSE unchanged at 6225.77.

The FTSE-100 index was unchanged at 6225.77.

7.32am update: Hong Kong shares on the up despite Chinese security law fears

Hong Kong shares tracked other Asian markets higher today as upbeat data from the US and China data renewed economic recovery hopes and offset worries about .

At the lunch break, the Hang Seng index was up 0.9 percent to 24,516.44, while the Hong Kong China Enterprises Index, which tracks Hong Kong-listed Chinese companies, was 0.6 percent higher at to 9,818.17.

Chinese shares also climbed with Shenzhen’s tech-heavy start-up board ChiNext jumping more than 2 percent to reach four-year highs amid heightened Sino-US tensions.

On the mainland, the blue-chip CSI300 index rose 1.1 percent to 4,154.29. The Shanghai Composite Index climbed 0.6 percent to 2,978.56.

Hang Seng

Hong Kong shares rose despite China security law fears (Image: GETTY)

7.02am update: Global stocks rise after investors shake off worrying new virus outbreaks

Global stocks rose today after investors shook off fears of new virus outbreaks.G

Japan’s benchmark Topix index rose 1.2 percent while Australia’s S&P/ASX 200 gained 1.3 percent. China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks was up 0.8 per cent while Hong Kong’s Hang Seng added 0.9 per cent. Futures markets predicted the S&P 500 to climb 0.2 per cent when US trading begins later in the day.

Chris Varvares, co-head of US economics at IHS Markit, told the FT it was “too early to tell” about new US coronavirus cases and deaths leading to lockdowns, which would be a blow to the economy later this year.

He said: “We are watching very closely the course of the pandemic and looking for a tipping point.

“Chinese equities were buoyed by a pick-up in activity at the country’s factories, with the official manufacturing purchasing managers’ index beating economists’ predictions in June.”

6.11am update: China’s factory activity quickens, but pandemic drags on exporters and recovery

The official manufacturing Purchasing Manager’s Index (PMI) came in at 50.9 in June, compared with May’s 50.6, National Bureau of Statistics (NBS) data showed on Tuesday, and was above the 50.4 forecast in a Reuters poll of analysts.

The 50-point mark separates expansion from contraction on a monthly basis.

The uptick was underpinned by the quickening pace of expansion in production. The forward-looking total new orders gauge also brightened, rising to 51.4 from May’s 50.9, suggesting domestic demand is picking up as industries from non-ferrous metals to general equipment and electrical machinery all showed an improvement.

But export orders continued to contract, albeit at a slower pace, with a sub-index standing at 42.6 compared to 35.3 in May, well below the 50-point mark.

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