London’s blue-chip index could not make up a 1.2 percent slump after talks between EU finance bosses over how to fight the coronavirus crisis together collapsed once again. The index had already fallen 65 points to 5,638 within its first half hour of trading today – following two consecutive days of significant gains. Markets have reacted badly to the failure of EU finance chiefs to agree on a coronavirus rescue package. They were involved in a marathon 16-hour teleconference but could not agree on how to help European economies recover from the deeply damaging pandemic.
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France and some of Europe’s other worst-hit southern countries have clashed with the likes of Germany over whether to issue joint debt in the form of coronabonds.
Angela Merkel’s government in particular has shown strong opposition towards this proposal.
Josh Mahony, senior analyst with online trader IG, said: “Overnight squabbles saw finance ministers ultimately fail in their bid to introduce an aid package worth half-a-trillion euros.
“This is just the latest in a list of worrying events which highlight the feeling of dissatisfaction over the EU’s coronavirus response.
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FTSE 100: Global markets are rallying amid the coronavirus crisis (Image: PA)
“The squabbles seen last night were a clear reminder of just how difficult it can be to find agreement between 27 nations who have all seen vastly different experiences in recent weeks.
“Until a resolution on this package is found, we could see stock markets continue to struggle.”
Connor Campbell, financial analyst at trading platform Spreadex, said: “Their confidence knocked by the EU’s inability to reach a consensus regarding its response to the coronavirus crisis, the European indices remained in the red on Wednesday.
“Maintaining a 50 point fall, the FTSE continued to sit just under 5650, weighed down by notable losses for BP (-3.2%), Glencore (-4.2%), and Tesco (-4.5%), the latter of which warned investors that the cost of the Covid-19 crisis could run as high as £950 million.”
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FTSE 100: (Image: GETTY )
5.19pm update: FTSE 100 closes in the red as index struggles
London’s benchmark index closed the day down 0.85 percent at 5,655.91.
Michael Hewson of CMC Markets said: “European markets have slipped back today as investors got a flavour of the economic destruction being wrought across Europe by the virus with the Bank of France’s estimate that the French economy contracted six percent in Q1, while the latest estimates from Germany suggest a 10 percent contraction in Germany’s economic output in the first half of the year.
“It would appear that the size of the economic contraction, when extrapolated across the rest of 2020 has delivered a huge wake call to markets as to the eventual price tag of this crisis.
“Hopes earlier this week that a fall in infection rates over the weekend in France, Spain, and New York in the US, might mark a plateauing of infection and death rates of Covid-19 have also seen a sharp dose of reality in the last 24 hours, as Spain reported another increase in infection and death rates for the second day in a row, in data released this morning.
“The UK numbers also showed a sharp rise, while a new report by scientists at Imperial College has tempered some of the enthusiasm of the last couple of days, as it predicts hundreds of new deaths in the coming week.”
FTSE 100: Investors tempered their optimism amid the coronavirus crisis (Image: REUTERS )
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4.29pm update: FTSE 100 continues sharp falls
The London-based index has continued to struggle, experiencing increasing falls in value throughout the afternoon.
The index was down 92.08 points to 5612,37 at 3.45pm.
This compares to the FTSE falling 54.02 at 5650.43 just an hour earlier.
4.22pm update: Channel 4 announces sweeping cuts to fight coronavirus impact
The broadcaster has announced a number of new measures to fight the impacts from the COVID-19 pandemic.
All board members have taken a 20 percent pay cut and their bonuses suspended, 10 percent of staff are being furloughed, and the 2020 content budget has been slashed by £150million, with a further £95million saved across other areas of its operations, including marketing budgets.
Channel 4 chief executive Alex Mahon said: “As a commercially funded business the Covid-19 outbreak has had a severe impact on our advertising revenues and so we are taking action now to manage our costs appropriately and ensure that we both protect our staff and our ongoing ability to serve our audience.”
4.10pm update: Wall Street starts day on front foot
US stock markets have opened in the green for the third consecutive day.
The Dow Jones saw the biggest jump, increased 1.18 percent to 22,921.23.
The S&P 500 and Nasdaq also rose 1.09 percent and 1.08 percent respectively.
3.30pm update: McDonald’s sales plummet 22pc as firm ditches $1bn business plan
The fast food chain has said sales in March plummeted by more than a fifth and it will now be shelving $1bn worth of restaurant upgrades and openings.
The Chicago-based group said in an unscheduled update, while three quarters of outlets globally were operational, the majority are focusing on drive-through, takeaway and delivery.
McDonald’s added it is also allowing some franchisees to defer rent and royalty payments.
France and Germany have clkashed over the EU’s coronavirus rescue package (Image: GETTY)
2.40pm update: WTO warns global trade will shrink more than in financial crisis
The World Trade Organisation (WTO) has warned global trade could contract more than during the finncial crisis as the coronavirus blows a huge hole in the economy across multiple continents.
The WTO forecasts world merchandise trade is set to crash by up to 32 percent – marking a much more significant contraction than the 12 percent fall seen in 2009.
The organisation’s director-general said: “These numbers are ugly – there is no getting around that.
“The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself.”
1.30pm update: Airlines could save almost £1bn as new measures passed
Airlines have been given a much-needed boost after measures allowing them to temporarily defer the payment of air navigation charges were passed.
Eurocontrol, which manages charging for navigation services across Europe and in which the UK also holds a 10 percent share vote, estimated that European airlines could save €1.1bn as a result of the change.
Transport secretary Grant Shapps said: “Deferring these charges will further help airlines, on top of the unprecedented package of economic measures recently announced by the Chancellor, to support businesses through this challenging period.”
12.40pm upodate: France tumbles into recession as economy plunges six percent
France has tumbled into recession, with the country’s economy shrinking six percent in the first three months of this year – the biggest fall since World War II.
The Bank of France released new data earlier today showing outlining the sharp decline in the country’s economy, as the coronavirus pandemic decimated business activity.
During the last three months of 2019, the economy shrunk 0.1 percent.
This means the country is now technically in recession following two consecutive quarters of negative growth.
The FTSE 100 has fallen as the UK continues to fight the coronavirus (Image: EXPRESS)
Paul Withers taking over from Rebecca Perring.
11.58am update: FTSE 100 update
The FTSE-100 index at 11.45am was down 80.79 at 5623.66.
10.55am update: Tesco crisis as shares slump
Shares in Tesco fell 4.7 percent after bosses estimated extra costs related to the coronavirus crisis could be between £650 million and £925 million.
9.55am update: Pound edges lower against US dollar
Sterling edged lower against the dollar on Wednesday, as demand for the US currency rose broadly amid growing concerns in markets that the coronavirus pandemic is far from over.
By 8.30am, the pound was 0.24 percent lower at $1.2303, but gained against a broadly weaker euro to trade 0.1 percent higher at 88.20 pence.
9.34am update: Germay shares fall as coronavirus death rate increases
Germany’s DAX shed 0.8 percent after rallying more than 8 percent in the past two days, as the number of confirmed cases rose for a second straight day.
8.45am update: London Stock Exchange update
The FTSE-100 index at 8.45am was down 53.61 at 5650.84.
8.16am update: FTSE 100 update
The FTSE-100 index at 8.15am was down 70.07 at 5634.38.
7.51am update: Gold prices stuck
Gold prices were stuck at $1,648, after touching a 3-1/2-week high on Tuesday at $1,671.
7.47am update: Wild swings in oil market
US crude futures jumped 6.4 percent to $25.18 a barrel, having shed 9.4 percent the session before, while Brent crude added $1.02 to $32.89.
7.46am update: FTSE 100 opening
The FTSE-100 index at 7.44am was unchanged at 5704.45.
7.39am update: Australia’s dollar down
Ratings agency S&P Global warned the cost of combating the virus would weigh heavily on Australia’s finances and changed the outlook for the country’s rating to negative.
That knocked the Aussie dollar down 0.5 percent to $0.6137 and gave its US peer a lift. The US dollar added 0.2percent on the yen to 108.93, while the euro dipped 0.2 percent to $1.0865 .
Against a basket of currencies, the dollar edged up 0.2 percent to 100.170.