London close: Markets close lower amid fresh economic consternation

The FTSE 100 ended the session down 3.34% at 5,597.65, and the FTSE 250 slid 4.57% to 15,347.56.

Sterling was weaker against both of its major trading pairs, last falling 0.81% against the dollar to $1.2521, and slipping 0.18% on the euro to €1.1475.

Sentiment had taken a knock earlier, after the International Monetary Fund warned that the world economy would suffer its worst recession since the Great Depression in 2020, with global GDP set to contract by 3%.

Meanwhile, the Office for Budget Responsibility said the UK economy could contract by as much as 35% in the second quarter of this year.

“With many major stock markets having regained around 50% of their losses, the potential upside becomes less and less given the expectation of a sharp global recession this year,” said IG analyst Joshua Mahony.

“Notably, we have seen the dollar push sharply higher this morning, breaking back into a more bullish position.

“Given the negative correlation between the dollar and stocks, signs of a dollar resurgence could bring a bearish period into play for stock markets.”

Mahony noted that oil prices grabbed the headlines once again earlier in the day, with prices slumping despite the efforts of OPEC+ over the weekend.

“The latest IEA report does little to boost confidence in the sector, with demand looking set to plunge by a whopping 29m barrels per day in April alone.

“Whether today’s slump in oil prices serves to rally OPEC+ into another cut remains to be seen.”

With the group having difficulty achieving their 9.7 million barrels per day cut, Mahony said an inability to enact further restrictions would likely lead to further downside for the months ahead.

“In the UK, this crude slump has been most detrimental to those smaller producers on the FTSE 250, with the likes of Tullow and Premier Oil hit hard given that they will likely find it harder to weather this storm compared with the FTSE 100 majors.”

Prices for the thick black stuff remained weaker as European markets closed, with Brent crude last down 7.13% at $27.64 per barrel, and West Texas Intermediate losing 3.18% to $19.49.

Closer to home, it emerged that banks and other lenders had provided more than £1.1bn of emergency loans to small and medium sized enterprises (SMEs) under the government's business interruption loan scheme, industry figures showed.

UK Finance said 6,020 loans had been made through the scheme, more than double the number a week earlier.

After a rocky start, the number of loans increased from 240 a day on 2 April to 910 on 8 April. 1,800 loans worth more than £300m were recorded over the Easter weekend.

“Getting finance to businesses is a key part of our plan to support jobs and the economy during this crisis - and we’re working with lenders to ensure support reaches those in need as soon as physically possible,” said Chancellor Rishi Sunak.

In equity markets, there were plenty of fresh Covid-19 pandemic-related updates to sift through.

Outsourcer Equiniti was down 7.76% after it said it was cancelling its final dividend and withdrawing guidance for the year ending December 2020 due to the virus outbreak.

Corrugated packaging company Smurfit Kappa was 4.34% lower, after hailing a "strong" first quarter but said it was cancelling its final dividend "in light of the increased macro uncertainty due to the Covid-19 pandemic".

UDG Healthcare was off 5.28% after it said trading in the first half was "strong" but that the second half was set to be hit by the Covid-19 outbreak, as it cancelled its dividend and withdrew guidance.

Jupiter Fund Management slid 8.58% as it posted a drop in first-quarter total assets under management.

Ferguson was off 2.27% after withdrawing its interim dividend and suspended its $500m share buyback to conserve cash during the Covid-19 crisis.

The plumbing and heating company said trading to the end of March was not materially impacted by the pandemic but that the effect increased significantly in the past 10 days.

On the upside, insurance group Hastings was ahead 4.27% after saying it still planned to pay its final dividend of 5.5p despite the coronavirus pandemic and a warning from regulators over payouts during the crisis.

Market Movers

FTSE 100 (UKX) 5,597.65 -3.34%
FTSE 250 (MCX) 15,347.56 -4.57%
techMARK (TASX) 3,364.47 -2.71%

FTSE 100 - Risers

Ocado Group (OCDO) 1,549.00p 4.34%
Flutter Entertainment (FLTR) 7,600.00p 2.12%
United Utilities Group (UU.) 888.20p 1.07%
Sainsbury (J) (SBRY) 202.00p 1.05%
Severn Trent (SVT) 2,293.00p 0.70%
M&G (MNG) 146.90p 0.62%
British American Tobacco (BATS) 2,927.50p 0.31%
AstraZeneca (AZN) 7,615.00p 0.12%
NMC Health (NMC) 938.40p 0.00%
GlaxoSmithKline (GSK) 1,568.20p -0.11%

FTSE 100 - Fallers

Melrose Industries (MRO) 84.60p -12.06%
easyJet (EZJ) 603.20p -9.94%
Royal Bank of Scotland Group (RBS) 104.90p -8.74%
International Consolidated Airlines Group SA (CDI) (IAG) 217.80p -8.53%
ITV (ITV) 66.36p -8.47%
JD Sports Fashion (JD.) 511.60p -8.41%
Meggitt (MGGT) 243.40p -7.98%
Evraz (EVR) 232.50p -7.96%
Fresnillo (FRES) 692.60p -7.60%
Rolls-Royce Holdings (RR.) 310.00p -7.60%

FTSE 250 - Risers

Hastings Group Holdings (HSTG) 190.20p 4.22%
Watches of Switzerland Group (WOSG) 239.50p 3.23%
Genus (GNS) 3,504.00p 2.16%
Convatec Group (CTEC) 182.10p 2.07%
TI Fluid Systems (TIFS) 178.00p 1.71%
Avast (AVST) 400.40p 1.57%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,316.00p 1.23%
Personal Assets Trust (PNL) 42,800.00p 1.06%
HGCapital Trust (HGT) 228.00p 0.66%
3i Infrastructure (3IN) 248.00p 0.00%

FTSE 250 - Fallers

Cineworld Group (CINE) 49.67p -21.16%
Premier Oil (PMO) 22.23p -19.66%
Hyve Group (HYVE) 21.55p -17.75%
Hammerson (HMSO) 67.62p -16.95%
Airtel Africa (AAF) 37.75p -14.98%
Wetherspoon (J.D.) (JDW) 820.50p -14.62%
Frasers Group (FRAS) 207.20p -14.59%
FirstGroup (FGP) 62.50p -14.03%
Mitchells & Butlers (MAB) 174.40p -13.45%
Hiscox Limited (DI) (HSX) 730.00p -13.34%