In reduced trade, with China and Japan on holiday, US stock futures fell 1.7 percent and U.S. crude tumbled seven percent. The safe-haven US dollar rallied to one-week highs against the risk sensitive Australian and New Zealand dollars. South Korea’s KOSPI fell, Hong Kong’s Hang Seng returned from a two-session holiday with a 3.5 percent drop, while Australia’s ASX 200 eked out a 0.5 percent gain.
European shares were down 2.5 percent in mid-morning trading, with sectors sensitive to economic growth including oil and gas, automakers and banks falling between about 4 percent and 5.5 percent.
The moves extended a sour start in May which began on Friday with bleak US data and the threat of fresh trade-war hostilities between the world’s two biggest economies.
US President Donald Trump and Secretary of State Mike Pompeo added to worries with fresh efforts to pin blame for the pandemic on China, where the new coronavirus outbreak is believed to have originated.
The latest salvo came from Pompeo on Sunday who said there was “a significant amount of evidence” that the virus emerged from a laboratory in the central Chinese city of Wuhan.
Pompeo did not provide evidence, or dispute a US intelligence conclusion that the virus was not man-made. But the comments double down on Washington’s pressure on China as U.S. deaths and economic damage mount.
FTSE 100 LIVE: Asian stocks plummeted on Monday
3.55pm update: BAE Systems completes £218 for radios business
Defence giant BAE Systems has completed the acquisition of Raytheon’s airborne tactical radios business in a deal worth £218 million.
Shares nudged marginally lower after the FTSE 100 firm confirmed the deal, which it agreed in January.
BAE said the move, which has been funded from the company’s existing cash resources, has now received the necessary regulatory approvals.
It said the radios business designs, manufactures and supplies a range of communications systems to US Department of Defence, allied governments and large defence aircraft manufacturers, and the acquisition is a “strong strategic fit” for BAE.
Shares in the defence firm fell 1.5 percent to 495.3p.
3.45pm update: FTSE latest
The FTSE-100 index at was up 16.98 at 5780.04.
3.31pm update: Virgin Money appoints new chairman
Virgin Money has hired former Alliance & Leicester boss David Bennett as its new chairman.
The Clydesdale Bank owner said it was “pleased” to appoint Mr Bennett, who has been deputy chairman and non-executive director of the business since October 2015.
He will replace Jim Pettigrew, who announced his intention to retire as chairman of the banking group in January.
Virgin Money said Mr Bennett will take over the role on Wednesday while Mr Pettigrew will remain available as an adviser for a transition period.
Virgin Money chief executive David Duffy said: “I am very pleased that someone with David’s extensive banking experience and deep understanding of our business will succeed Jim as chairman.”
Shares fell 3 percent at 71.6p on the announcement.
3.15pm update: Wall Street braced for major losses after Buffett sell-off
US stocks look set to fall again today after billionaire inestor Warren Buffett confirmed he had dumped his airline shares.
Delta Air Lines, American Airlines Co, Southwest Airlines Co and United Airlines fell between 9 percent and 11 percent in premarket, after Berkshire Hathaway boss Mr Buffett told reporters of the move over the weekend, saying “the world has changed” for the industry.
The comments, and fall in airline operators, also shaved more than 4.7 percent off Boeing shares.
Randy Frederick, vice president of trading and derivatives for Charles Schwab, said Mr Buffett’s relatively bleak reading of the market had hit home with investors.
He said: “I did not get the sense that he sees an enormous amount of opportunity out there right now, but is instead holding up a very high level of cash.”
2.45pm update: FTSE down
The FTSE-100 index was down 6.93 at 5756.13.
2.37pm update: J. Crew file for bankruptcy protection
J. Crew Group Inc filed for bankruptcy protection on Monday with a plan to hand over control to lenders, adding to a list of retailers pushed to the brink by widespread store closures in response to the COVID-19 pandemic.
The New York-based chain, known for preppy clothing at times worn by former first lady Michelle Obama, filed for bankruptcy in a Virginia federal court with an agreement to eliminate $1.65 billion of debt in exchange for ceding ownership to creditors.
J. Crew is the first high-profile retailer to seek bankruptcy protection since the coronavirus spread across the globe, prompting government officials to order businesses deemed nonessential to temporarily close.
1.55pm update: FTSE up
The FTSE 100 index at 1.45pm was up 6.68 at 5769.74.
1.39am update: Union leaders ‘urgent concerns’ over back-to-work plans
Union leaders have raised “urgent concerns” about the Government’s back-to-work plans.
The TUC said proposed guidance expected to be finalised in the next few days places no new requirements on employers to keep people safe at work.
The union organisation said there is no commitment from ministers to increase enforcement to stop companies flouting the law and putting staff in danger.
The TUC said its main concerns include a lack of a binding requirement on employers to ensure safe working conditions.
The guidance repeatedly suggests that “employers should consider” actions such as enabling social distancing or providing handwashing facilities, but also suggests individual employers can decide to ignore the suggestions, said the TUC.
It added that there is a lack of any recommendations on personal protective equipment (PPE).
Coronavirus has left world economies in deep recession
1.22pm update: Gold enjoys ‘nice bump’
Craig Erlam, Senior Market Analyst, OANDA Europe, said gold could create some excitment.
He said: “Gold has enjoyed a nice bump these last couple of trading sessions. It technically remains range-bound but the move has come alongside stock market declines.
“Whatever is giving it a boost today, only a break of $1,750 will be meaningful, although $1,740 – the most recent peak – will be interesting a could create some excitement.”
1.03pm update: FTSE 100 down
The FTSE 100 index at 12.45pm was down 15.21 at 5747.85.
12.12pm update: Banks relief slowed by lack of full state loan guarantee
Delays in offering full state guarantees on coronavirus relief lending hampered the ability of banks to provide fast financial aid to companies in the first phase of the pandemic, senior British bankers have said.
Banks have come under fire from the Bank of England and the general public for not providing loans to companies fast enough as a national lockdown shutters swathes of an economy heading for deep recession.
But the chief executives of commercial banking at domestic lenders Lloyds Banking Group and Royal Bank of Scotland said the primary reason relief lending was faster in countries like Germany and Switzerland was due to 100% state guarantees offered from the onset of the crisis.
Lloyds’ David Oldfield said: “The key difference … is that some of the other European schemes had a 100% government guarantee from Day One.
“That therefore alleviated some of this pressure on banks to do affordability and the viability checks.”
Oil prices have plummeted
11.48am update: London stock market update
The FTSE 100 index at 11.45am was down 7.50 at 5755.56.
10.55am update: FTSE down
The FTSE 100 index at 10. 45am was down 26.91 at 5736.15.
10.33am update: ‘Balance between physical and economic health’
Joshua Mahony, Senior Market Analyst at IG, a global leader in online trading, said: “Today’s FTSE 100 recovery stands in stark contract to the huge declines evident throughout mainland European markets this morning.
“Coming off the back of a period of optimism at the thought of an economic reopening throughout Europe, we are now seeing fears arise over the potential market reaction if such a move ultimately leads to a second wave and subsequent lockdown.
“Without a vaccine, it appears highly likely that leaders have to choose a balance between physical and economic health.”
10am update: FTE 100 update
The FTSE 100 index at 9.45am was down 10.32 at 5752.74.
Global stock markets struggled on Monday
9.55am update: South Africa’s economy crippled
South Africa’s economy could contract by as much 12 percent and unemployment balloon to more than third of the workforce due to the impact of the coronavirus.
Director-General of the National Treasury Dondo Mogajane said: “Anything between minus 7 percent up to 12 percent could be the impact (on GDP). We have to focus on the post-virus environment so we can contain the impact … It’s gonna be huge.
“We could even reach 40 percent unemployment if things go the way they are. The manufacturing industry is impacted. Mining is impacted. The services sector is impacted. Look at tourism for instance, it’s on its knees.”
9.18am update: Pound falls
The pound fell to its lowest level since Wednesday overnight, driven by a stronger dollar as China-US relations worsened, but it erased some losses in early London trading on Monday.
Against the dollar, the pound was last at $1.2452, having fallen 0.4 percent since New York’s close on Friday.
It recovered somewhat between 7am and 8am as London opened, before falling again.
The pound was broadly flat against the euro, at 87.81 pence.
The US is on lockdown over the coronavirus
8.45am update: FTSE 250 index drops
The domestically focussed FTSE 250 index shed 0.9 percent, deepening a 1.9 percent slide on Friday.
8.33am update: FTSE down
The FTSE 100 index at 8.15am was down 32.11 at 5730.95.
8.16am update: UK markets dip
UK stock markets dipped on Monday as US-China tensions flared up again over the origin of the coronavirus.
Rolls-Royce fell 4.2 percent to the bottom of the FTSE 100 after a source reported it was mulling cutting up to 15 percent of its workforce as customers cut production and airlines parked planes due to a halt in global travel.
The blue-chip FTSE 100 was down 0.7 percent, deepening a 2.3 percent slide on Friday, when US President Donald Trump pinned the blame for the pandemic on China and threatened new tariffs.
China is easing its lockdown restrictions
8.01am update: FTSE 100 opens
The FTSE 100 index opened at 5763.06.
7.48am update: FTSE 100 update
The FTSE 100 index at 7.44am was unchanged at 5763.06.
7.43am update: UK-US trade talks to begin
Trade talks between the UK and the US are due to open on Tuesday despite the ongoing coronavirus pandemic.
International Trade Secretary Liz Truss and US Trade Representative Robert Lighthizer will meet via video call, while around 100 officials listen in from both countries.
It is understood that the first round of talks are set to last for about two weeks, while further rounds will take place around every six weeks.
7.31am update: European shares slump
The Euro STOXX 50 futures fell 3.3 percent by 7.13am, suggesting a downbeat start in May after the STOXX 600 recorded a 6 percent gain in April.
German stock futures were down 3.2 percent, while France’s CAC 40 fell 3.2 percent. FTSE futures dropped 0.4 percent.
7.03am update: FTSE futures drop
FTSE futures fell 0.6 percent and European shares seemed set to return from a May Day break with a slump. EuroSTOXX 50 futures fell 3 percent.
6.18am update: Asia’s factory activity ravaged in April due to coronavirus
A series of Purchasing Managers’ Indexes (PMIs) from IHS Markit fell deeper into contraction from March, with some diving to all-time lows and others hitting levels last seen during the 2008-2009 global financial crisis.
Similar gauges out of Europe’s largest economies due on Monday and later in the week are also expected to show dire global industry conditions.
The PMI for South Korea, Asia’s fourth-largest economy and a global manufacturing powerhouse, skidded to 41.6 in April, the lowest reading since January 2009. Japan’s PMI released last week similarly fell to an 11-year low.
“The bad news is that the hit to industry in many places is unlikely to be passed the worst,” Alex Holmes, Asia Economist at Capital Economics, wrote in a note.
“Global demand has slumped and we don’t think it has bottomed out yet. The latest incoming data for the U.S. and Western Europe point to an unprecedented slump in demand. And while China’s economy has started to recover, demand there remains very weak.”
Economies across the world have been crippled by coronavirus
5.56am update: Oil prices lower due to US-China trade tension
Oil prices fell in early trade on Monday, paring last week’s gains, on worries the global oil glut may persist as US-China trade tension could hold back an economic recovery even as coronavirus pandemic lockdowns start to ease.
US West Texas Intermediate (WTI) crude CLc1 futures fell as low as $18.32 a barrel and were down $1.46, or 7.6 percent, at $18.27 at 12.08am GMT. The benchmark contract rose 17 percent last week.
Brent crude LCOc1 futures were down 90 cents, or 3.4 percent, at $25.54, after touching a low of $25.53. Brent rose about 23 percent last week following three consecutive weeks of losses.