London close: Benchmark claws back above 5,000 but remains in the red

The FTSE 100 ended the session down 4.01% at 5,151.08, managing to claw its way back above the 5,000 level in afternoon trading, while the FTSE 250 was 7.79% weaker at 14,349.75.

Sterling was weaker against both of its major trading pairs, last falling 0.33% against the dollar to $1.2238 and losing 0.8% on the euro to €1.0968.

Oil prices continued their collapse, with Brent crude last down 13.02% at $29.95 per barrel and West Texas Intermediate 9.19% weaker at $29.06.

For context, Brent was trading at $70 at the start of the year.

Overnight, the Federal Reserve cut interest rates to between 0.00% and 0.25% and announced the launch of a $700bn stimulus programme to help counter the impact of the coronavirus pandemic.

“The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” the US central bank said in a statement.

“The effects of the coronavirus will weigh on economic activity in the near-term and pose risks to the economic outlook.”

It also launched a dollar-swap plan in coordination with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, to boost liquidity in the US dollar.

“If the Fed's dramatic easing measures were intended to support global markets, then I can't imagine the carnage we would have faced today without them,” said Oanda analyst Craig Erlam.

“As ever, officials have the extremely difficult job of striking the right balance in response to the coronavirus, between providing sufficient support and not creating mass hysteria.

“Some may suggest that the Fed cleared ventured too far towards the latter but I think they've probably done what's necessary and anyone that thought the situation wasn't that bad to begin with was kidding themselves.”

Erlam said that, if more governments followed suit, the global economy could have a “good chance” of a strong recovery later in the year, with “toilet roll panic-buying” a thing of the past.

“The flip side of that though is that if the darkest hour is just before the dawn, then we may only currently be in late evening.

“A true test of investors risk tolerance is yet to come.”

For his part, new Bank of England Governor Andrew Bailey said the central bank would deliver further "prompt action" when required to help the UK economy in the face of the coronavirus outbreak.

Speaking to BBC News, Bailey, said the BoE was "very keen" to avoid longer-term damage to the economy.

"That's why you saw prompt action last week, that's why you will see prompt action again when we need to take it, and the public can be assured of that," he said.

Dismal Chinese industrial production, fixed asset investment and retail sales data also weighed on sentiment.

Spreadex analyst Connor Campbell said the numbers were "scary enough to start a horror film franchise".

Industrial production slumped 13.5% in February, while fixed asset investment tumbled 24.5% and retail sales were down a whopping 20.5%.

"Analysts had been expecting a 3.0% fall in industrial production, a 2.0% drop in fixed asset investment and a 4.0% contraction in retail sales," said Campbell.

"One could argue those numbers aren’t exactly surprising, and that the estimates always looked a bit suspect.

“However, that failed to curb the blow for investors.”

In equity markets, travel and leisure stocks suffered the brunt of the selling yet again.

TUI was a big loser on the FTSE 100, falling 12.72% after announcing late on Sunday that it was applying for state aid guarantees as it suspended the vast majority of its travel operations and withdrew 2020 guidance due to the coronavirus.

British Airways and Iberia parent IAG slumped 27.01% after saying chief executive officer Willie Walsh will temporarily postpone his retirement as the company rides out the turbulence from the coronavirus epidemic.

Budget airline easyJet was 19.32% weaker after saying that government backing would be needed to save the European airline industry from the impact of the coronavirus as it warned it may have to ground a majority of its fleet.

The budget carrier said it had made further significant cancellations as European countries moved into lockdown, adding that these would "continue on a rolling basis for the foreseeable future".

Flutter Entertainment shares fell 12.22% after the Paddy Power Betfair owner warned that it would take a hit of up to £110m to earnings if sports fitting restrictions due to the coronavirus remain in place until the end of August.

Premier Inn owner Whitbread was under the cosh by 3.88%, while low-cost Central and Eastern European airline Wizz Air lost 19.71% as it suspended all flights to and from Poland until further notice due to travel restrictions imposed by the county in light of Covid-19.

Transport operator FirstGroup was down 55.48%, pub operator Marston’s was off 44.89%, its peer Mitchells & Butlers was 32.45% weaker, Cineworld fell 15.14%, Rank Group was 36.03% weaker, and William Hill was 25.54% softer, all amid concerns about the impact of Covid-19.

Supermarket retailers bucked the trend somewhat, with Sainsbury’s rising 0.5% and Ocado adding 4.23%, as panicked shoppers stocked up on loo roll and tinned goods amid worries about the coronavirus.

Tesco reversed earlier gains to fall 1.64%, however, and Dettol maker Reckitt Benckiser lost 1.38%, having earlier risen up as people snapped up cleaning products.

Market Movers

FTSE 100 (UKX) 5,151.08 -4.01%
FTSE 250 (MCX) 14,349.75 -7.79%
techMARK (TASX) 3,013.96 -4.52%

FTSE 100 - Risers

Evraz (EVR) 243.30p 6.34%
Sage Group (SGE) 612.80p 5.29%
Intertek Group (ITRK) 4,770.00p 5.16%
Ocado Group (OCDO) 1,233.00p 4.23%
Hargreaves Lansdown (HL.) 1,358.00p 2.84%
Rio Tinto (RIO) 3,357.50p 2.55%
Spirax-Sarco Engineering (SPX) 8,430.00p 2.49%
Standard Chartered (STAN) 444.10p 1.17%
Admiral Group (ADM) 2,027.00p 0.80%
Relx plc (REL) 1,534.50p 0.72%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 255.70p -27.01%
M&G (MNG) 109.40p -25.17%
easyJet (EZJ) 634.80p -19.32%
JD Sports Fashion (JD.) 417.20p -18.61%
Coca-Cola HBC AG (CDI) (CCH) 1,574.00p -14.99%
Barratt Developments (BDEV) 453.50p -13.88%
Barclays (BARC) 89.06p -13.01%
TUI AG Reg Shs (DI) (TUI) 314.20p -12.72%
Prudential (PRU) 758.80p -12.46%
Taylor Wimpey (TW.) 130.40p -12.22%

FTSE 250 - Risers

Royal Mail (RMG) 143.25p 6.39%
G4S (GFS) 97.44p 4.91%
Centamin (DI) (CEY) 100.40p 2.28%
Hastings Group Holdings (HSTG) 152.20p 2.22%
Premier Oil (PMO) 16.35p 2.12%
IG Group Holdings (IGG) 601.40p 1.08%
Hunting (HTG) 180.50p 0.84%
Ferrexpo (FXPO) 107.90p 0.79%
Just Eat Takeaway.Com N.V. (CDI) (JET) 5,935.00p 0.59%
Victrex plc (VCT) 1,847.00p 0.49%

FTSE 250 - Fallers

FirstGroup (FGP) 40.00p -47.81%
Restaurant Group (RTN) 26.58p -46.45%
Marston's (MARS) 28.42p -45.19%
Rank Group (RNK) 111.00p -36.03%
IWG (IWG) 146.25p -34.33%
Mitchells & Butlers (MAB) 153.00p -32.45%
Go-Ahead Group (GOG) 709.00p -30.22%
Aston Martin Lagonda Global Holdings (AML) 144.95p -30.17%
Greencore Group (GNC) 104.45p -25.66%
William Hill (WMH) 65.94p -25.54%