London’s blue chip FTSE 100 index were up about 0.4 percent on the open as the coronavirus continues to grip the world. But the FTSE 100 quickly slipped as more firms rolled out measures to weather the coronavirus crisis amid expectations of the worst earnings season for European companies since the 2008 financial crisis.
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The blue-chip FTSE 100 index edged 0.1 percent lower by 7.27am, retreating after last week’s late rally, as miners, insurers and homebuilders weighed.
The domestically focused FTSE 250 index gained 0.6 percent, helped by surge in shares of Aston Martin after its new boss Lawrence Stroll said immediate priorities will be to restart manufacturing and launch production of its crucial first sport utility vehicle.
Investors are preparing for a 22 percent plunge in first-quarter profits for companies listed on the broader European STOXX 600.
David Madden of CMC Markets, said: “A number of European countries eased some of their lockdown restrictions. Italy, Spain and Austria saw the re-opening of some businesses.
“In the grand scheme of things, the level of progress is tiny, but the message it sends out is very positive.”
But elsewhere, crude oil futures fell on Monday, with US futures touching levels not seen since 1999, amid concerns that US storage facilities will soon fill to the brim amid the coronavirus pandemic.
The oil market has been under pressure due to a spate of reports on weak fuel consumption and grim forecasts from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency.
The volume of oil held in US storage, especially at Cushing, Oklahoma, the delivery point for the U.S. West Texas Intermediate (WTI) contract, is rising as refiners throttle back activity due to slumping demand.
FTSE 100 LIVE: Crude oil futures fell on Monday (Image: GETTY)
FTSE 100: London’s financial markets have been crushed (Image: GETTY )
The front-month May WTI contract CLc1 was down $2.62, or 14 percent, to $15.65 a barrel by 0142GMT. At one point, the contract had fallen as much as 21 percent to hit a low of $14.47 a barrel, the lowest since March 1999.
That contract is expiring on Tuesday, and the June contract CLc2, which is becoming more actively traded, fell $1.28, or 5.1 percent, to $23.75 a barrel. Brent LCOc1 was also weaker, down 21 cents, or 0.8 percent, to $27.87 a barrel.
The plunge in crude oil prices reflects a glut at the main U.S. storage facilities at Cushing and a big drop in demand, said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“It hasn’t reach capacity but the fear is that it will,” he said, adding that once the maximum capacity is reached, producers will have to cut output.
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FTSE 100: The oil market is under pressure (Image: GETTY)
10.25am update: Furlough sceheme opens
A Government scheme for workers who have been furloughed – given a temporary leave of absence – has launched.
Chancellor Rishi Sunak has announced a £1.25 billion package to aid companies in the innovation sector.
The Coronavirus Job Retention Scheme allows businesses to claim towards staff wages and comes after the Government was warned of the economic cost for many companies of any delay in its implementation.
10.11am update: Dollar makes gains
In the currency markets, the dollar gained broadly as the concerns about global growth boosted the safe-haven appeal of the greenback and weighed on risk-oriented currencies such as the Australian dollar.
Against a basket of its rivals, the US currency rose 0.2 percent to 99.90 and edged closer towards a three-year high of near 103 hit last month.
It gained about 0.1 percent on the euro and British pound and 0.2 percent on the Japanese yen. It last bought 107.80 yen and traded at $1.2478 per pound GBP= and $1.0870 per euro.
The dollar’s gains were despite the latest trader positioning data showing investors have been ramping up their short positions or bets against the greenback.
9.18am update: London stock markets update
The FTSE-100 index at 9.15am was up 28.52 at 5815.48.
8.55am update: FTSE 100 update
The FTSE 100 index at 8.45am was up 16.28 at 5803.24.
FTSE 100: Japan’s exports have slumped (Image: GETTY )
8.49am update: China stocks close on a high
China stocks ended higher on Monday as a key Chinese lending rate was cut for the second time this year to shore up the coronavirus-hit economy.
At the close, the Shanghai Composite index was up 0.5 percent at 2,852.55.
The blue-chip CSI300 index was up 0.36 percent, with its financial sector sub-index higher by 0.2 percent, the consumer staples sector up 0.38 percent, the real estate index down 0.39 percent and the healthcare sub-index up 0.7 percent.
The smaller Shenzhen index ended up 1.01 percent and the start-up board ChiNext Composite index was higher by 1.122 percent.
China cut its benchmark lending rate as expected to reduce borrowing costs for companies and prop up the economy, after it contracted for the first time in decades.
8.18am update: FTSE down
The FTSE 100 index at 8.15am was down 5.66 at 5781.30.
8.03am update: FTSE 100 opens
The FTSE 100 index opened at 5786.96.
FTSE 100: The coronavirus has crippled economies across the world (Image: GETTY )
7.47am update: FTSE 100 index update
The FTSE 100 index at 7:44am was unchanged at 5786.96.
7.28am update: S&P 500 rebounds
The S&P 500 has still rallied 30 percent from its March low, thanks in part to the extreme easing steps taken by the Federal Reserve. The Fed has bought nearly $1.3 trillion of Treasuries alone, and many billions of non-sovereign debt it would historically have never gone near.
Oliver Jones, a senior markets economist at Capital Economics, said: “The Fed will be a major buyer of risky assets in the coming months, and has displayed its willingness to backstop virtually any part of the domestic financial system in trouble.”
Microsoft, Apple, Amazon, Alphabet and Facebook account for more than a fifth of the index.
Mr Jones added: “What’s more, the S&P 500 is skewed towards a few ultra-large firms, some of which are also in those sectors.
“Their sheer size might make them better able to weather a few months of dramatically-low revenues than most.”
The rebound in the S&P 500 therefore likely overstated optimism on the economy, Jones argued, noting European benchmark equities indices and US small cap indices were still in bear market territory.
FTSE 100: Markets in the world have been hurt by the coronavirus (Image: GETTY )
7.12am update: FTSE set for strong open
London’s blue chips are expected to open 60 points higher to 5,846.96.
6.17am update: Japan exports slump as coronavirus hits US, Chinese demand
Japan’s exports slumped the most in nearly four years in March as US-bound shipments, including cars, fell at the fastest rate since 2011, highlighting the damage the coronavirus pandemic has inflicted on global trade.
Monday’s bleak data underscored the challenges Prime Minister Shinzo Abe’s government faces in dealing with a collapse in activity that is expected to send the global economy into its deepest slump since the Great Depression of the 1930s.
After a jump in virus cases, Abe expanded a state of emergency last week to include the entire country, which gave authorities more power to push people to stay home and businesses to close. Japan has reported more than 10,000 infections and over 200 deaths.
Adding to worries the world’s third-largest economy is sliding into recession, Ministry of Finance data showed Japanese exports fell 11.7 percent in the year to March, compared with a 10.1% decrease expected by economists in a Reuters poll.
That followed a 1 percent fall in February and marked the biggest decline since July 2016, as shipments to Japan’s major export destinations from China, the United States to Europe were all battered.