London’s blue-chip FTSE 100 index fell 0.3 percent, extending losses from Tuesday on signs Britain was heading for a longer lockdown to fight the coronavirus crisis and warnings that the economy could shrink by 13 percent this year, its deepest recession in 300 years. European shares headed lower after a five-day rally, with investors turning to the first-quarter earnings season to gauge the extent of the business damage from the coronavirus pandemic.
The pan-European STOXX 600 index was down 0.2 percent after surging almost 8 percent since April 6 on early signs the health crisis was ebbing and on hopes that sweeping lockdown measures would soon be lifted.
The benchmark index has recovered about 24 percent since hitting an eight-year low in March, but is still down about 22 percent from its record high and analysts warn an uptick in coronavirus cases could spark another sell-off.
French shares fell 0.3 percent as France became the fourth country to report more than 15,000 deaths due to the coronavirus after Italy, Spain and the US.
Dutch navigation and digital mapping company TomTom shed 2.7 percent after saying it expected negative free cash flow this year and lower revenue from its automotive and consumer businesses due to the pandemic.E
China moved again to cushion its economy, cutting a key medium-term interest rate to record lows and paving the way for a similar reduction in benchmark loan rates. While not unexpected, it did help MSCI’s broadest index of Asia-Pacific shares outside Japan edge up 0.3 percent to a fresh one-month top. Shanghai blue chips, however, eased 0.2 percent.
Japan’s Nikkei was still off 0.5 percent, though that followed a 3 percent jump the previous session. E-Mini futures for the S&P 500 dipped 0.5 percent, following a three percent rise in New York.
“Flattening infection curves and the thoughts of more stimulus have lifted all boats,” said Stephen Innes, chief global market strategist at AxiCorp.
“However, appearances can be deceiving as behind the headlines lie the most gnarly storm clouds building, suggesting there is still much to be worried about.”
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FTSE 100 LIVE: The IMF warned of devastating global economic damage (Image: GETTY)
FTSE 100: European shares have plummeted (Image: GETTY )
9.20am update: EU shares slip
Declines for Total SA, Royal Dutch Shell Plc and BP Plc sent the European energy index to its lowest this month as dire forecasts of the worst economic slump since the Great Depression hit oil prices.
ASML Holding NV, a key European supplier to chipmakers such as Samsung and Intel, fell 2.4 percent after reporting worse-than-expected earnings on Wednesday.
Dutch navigation and digital mapping company TomTom shed 5.3 percent after saying it expected negative free cash flow this year and lower revenue from its automotive and consumer businesses.
Han Tan, market analyst at FXTM said: “With the market outlook still mired in tremendous uncertainty, gains in equities remain far from a one-way bet.
“Lingering fears over the coronavirus could well put a lid on consumption and alter spending habits, while leaving corporate earnings stunted for an extended period.”
8.38am update: UK shares hurt by coronavirus
Asset manager Jupiter Fund Management dropped 5.6 percent after reporting an 18.3 percent drop in assets under management in the first quarter as fears over the coronavirus pandemic rattled financial markets.
Peer Quilter Plc also slipped 3.8 percent.
Shares in Kromek, a global supplier of medical devices, shot up 34.7 percent after announcing plans to start the manufacturing of medical ventilators in Britain and globally under a licence from Japan’s Metran.
8.30am update:Midcap index falls
The domestically focused midcap index, stuffed with companies more purely exposed to the British economy, fell 1.5 percent.
8.03am update: FTSE 100 opens
The FTSE 100 index opened at 5791.31.
7.45am: FTSE index update
The FTSE 100 index at 7.44am was unchanged at 5791.31.
FTSE 100: Global economies are suffering amid the coronavirus pandemic (Image: GETTY )
7.30am update: Dollar nurses losses
The dollar fell 0.16 percent to 107.05 yen on Wednesday, close to its lowest level in a month, and also briefly slipped to $1.0994 per euro, the weakest in two weeks.
The dollar nursed losses on Wednesday as investors cautiously stepped into riskier currencies after US President Donald Trump edged toward rolling back some restrictions put in place to contain the coronavirus outbreak.
The greenback also remains under pressure following heavy measures by the Federal Reserve to boost dollar supply, though analysts say it is too early for a full-scale retreat from safe-havens with the public health threat not yet fully contained.
7.22am update: France hikes costs to support economy
The French government has hiked the expected cost of its measures to support the economy though the coronavirus crisis to €110 billion ($120.6 billion).
Finance minister Bruno Le Maire told RTL radio: “We are going to go from €45 billion in a first economic support plan … to about €110 billion.”
He added that the package included 20 billion euros to help big companies and said that support would be offered to Air France KLM in the coming days.
7.12am update: FTSE expected to start lower
The FTSE 100 is expected to open lower today at around 10 points after ending Tuesday’s session 51 points lower at 5,791, according to IG.
6.19am update: IMF expects China growth to slow to 1.2 percent this year
China’s central bank on Wednesday cut the interest rate on its medium-term lending facility (MLF) for financial institutions by 20 basis points to 2.95 percent, a record low, in an attempt to combat the economic fallout from the coronavirus health crisis.
More easing is widely expected to help struggling companies get back on their feet.
At the midday break, the Shanghai Composite index was down 0.15 percent at 2,823.16 points.
The index briefly traded in positive territory after the MLF rate cut.
Trump claimed his plan would see some parts of the country likely to be ready to reopen the economy before May 1.
Speaking at the White House Rose Garden, Trump said he would “authorise” governors to implement plans in their states at the appropriate time.
However, many experts doubt the president has such powers.
Speaking at a daily briefing, New York Governor Andrew Cuomo also said that President Donald Trump had inaccurately asserted the president had total authority over when states reopen schools and businesses.
“The president is clearly spoiling for a fight on this issue,” said Cuomo.