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FTSE 100 falls another 4% as coronavirus crisis deepens; oil price slumps

Britain's index of biggest companies closed down more than 214 points at 5,080, while FTSE 250 tanked over 916 points to 13,008

WM Morrison Supermarkets PLC - FTSE 100 heads for another plunge ahead of Fed meeting as stimulus measures fail to stem market rout
FTSE 100 joined other global indices to head lower on Wednesday
  • FTSE 100 index closes 214 points down
  • Wall Street stocks plunge
  • Sterling falls to under US$1.18

5.20pm: FTSE closes lower

FTSE 100 index closed deep in the red midweek as global stock markets fell and the oil price tanked.

Britain's index of biggest companies closed down more than 214 points at 5,080, while FTSE 250 tanked over 916 points to 13,008.

Brent crude lost over 11% at US$25.58 a  barrel, while US crude crashed over 17% to US$22.35 a barrel as coronavirus worries and the price war between Saudi Arabia and Russia mean a double whammy blow for the commodity.

Some commentators say this may be only the beginning for the slump in oil price, which has shed 60% already since its peak this year. Today's renewed share-selling comes after Fed moves across the pond and UK Chancellor's emergency £350 billion bailout package aimed at helping the UK through the crisis

"The stimulus packages from yesterday have done little to reassure the markets as panic selling was witnessed today," said David Madden, analyst at CMC Markets.

"Governments announced packages to help combat the crisis, but they won’t kick in for a while, and there is the possibility they won’t be enough to stop a major slowdown in economic activity."

On Wall Street, the Dow Jones fell 1,717 points to 19,519, while the S&P 500 shed over 180 points to 2,347 - that's an 8% and 7% decline respectively.

Top loser on Footsie was beleaguered cruise operator Carnival (LON:CNR), which sank 34% to 620p. The shares have lost nearly 80% in the last month. BP (LON:BP.) shares dropped nearly 10% to 233.70p.

3.20pm: FTSE 100 recovers some losses into late-afternoon

As yet another dismal session entered its final hour, the FTSE 100 had recovered some losses from earlier in the day but was still 219 points lower at 5,102 ar around 3.20pm.

Despite the gloomy picture pervading the global economy, some of the big winners of Wednesday’s session were the UK’s grocers, with WM Morrison Supermarkets PLC (LON:MRW) rising 11% to 200.2p as it reported a revenue surge as shoppers rushed to stock up amid fears on a coronavirus quarantine.

Doing even better was rival J Sainsbury PLC (LON:SBRY), which was lifted 12.5% to 216p after saying it will save more than £500mn per year following the business rates holiday announced by the government yesterday.

Meanwhile, there was more misery for the travel sector as no-frills carrier Ryanair Holdings plc (LON:RYA) said from midnight on 24 March it expects “most if not all” of its flights to be grounded as a result of “severe travel bans and restrictions” imposed by governments across Europe.

Shares in the airline dropped 2.1% to €8.70 in late-afternoon.

Things are equally miserable on the currency market, where the pound has slumped 2.28% to US$1.1784 against the dollar, its lowest level since the 1980s, as investors pile into the dollar and concerns rise about the UK's borrowing levels as a result of its coronavirus stimulus measures.

1.40pm: Wall Street plunges at open

Wall Street has plunged at the start of Wednesday’s session as renewed fears of a global recession continued to sweep across global markets.

Shortly after the opening bell, the Dow Jones Industrial Average was down 5.29% at 20,114 while the S&P 500 tumbled 5.15% to 2,399 and the Nasdaq slumped 4.88% to 6,984.

Meanwhile, new Bank of England governor Andrew Bailey has warned the UK faces an economic “emergency” and that the central bank was “ready to do whatever we have to do” to support the economy amid the crisis.

Bailey has not ruled out the prospect of printing money and even doling out cash directly to households.

“Everything’s on the table”, Bailey told Sky News.

Meanwhile, the FTSE 100 had barely made any moves to recover in mid-afternoon and was down 241 points at 5,053 at 1.40pm.

12.25pm: US markets to head lower

Wall Street is set to follow Europe’s lead with another dismal session on Wednesday as the main indices pointed towards heavy losses at the coming open.

Meanwhile, cable is still under the cosh over lunchtime with the pound having hit its weakest level against the dollar since the 1980s after falling 1.44% to US$1.1886.

“This is the worst sustained period of sterling selling that I can recall, and it points to a severe dollar liquidity crunch that central banks have yet to get a grip on. There is a synchronised rush for dollars that has caught most companies, governments and traders on the hop. Dollar funding issues have been far more serious than estimated prior to this crisis”, said Markets.com’s Neil Wilson.

“The UK government's massive fiscal package undoubtedly means more borrowing for the UK economy - how do we pay for all this?... Concerns about what the implications are on Brexit from the coronavirus may also be a factor, whilst we have also seen a sharp downgrade of UK growth forecasts - but Britain is not alone on that front by any means. Brexit though clearly created risks (and opportunities) for GBP anyway and the threat of a global recession only magnify those risks for the market”.

Therefore this seems to be an offloading of risky-ish pounds in favour of safer dollars and, to a much lesser degree, euros….In a crisis like this King dollar reigns supreme”, he added.

Back in London, the picture was similarly glum with the FTSE 100 down 270 points at 5,024 at around 12.25pm.

11.55am: Cable slides over 1.4%

The pound is taking a hammering as investors pile into the dollar in a bid to secure themselves amid the coronavirus panic.

Just after 11.45am sterling had fallen 1.46% to US$1.1883 against the greenback, levels not seen consistently since the 1980s.

It is a similar story against the euro, where the pound has dropped 1.23% to €1.083.

While pressure for the pound usually provides some relief for equities, the FTSE 100 was still struggling into lunchtime and was down 245 points at 5,049 at around 11.50am.

11.15am: FTSE 100 barely above 5,000 into late-morning

As the final hour of the morning session begins the FTSE 100 is struggling to hold itself above 5,000 as losses deepen amid market panic over the coronavirus.

The blue-chip index had shed 281 points to 5,013 shortly before 11am, with travel and leisure groups among the hardest hit.

However, the biggest faller in the FTSE 100 was engineering group Meggitt PLC (LON:MGGT), which slumped 22% to 247p.

The engineering company counts aircraft builder Boeing Co (NYSE:BA) as one of its key customers, however, overnight the 747 maker requested a US$60bn bailout from the US government as it suffered a steep drop in revenues as the pandemic slashed airline demand for new planes.

The chaotic picture for airlines and airports has also hit investment firm 3I Group PLC (LON:III), which owns the George Best Belfast City Airport (BCA), as its shares tumbled 14% to 542.6p.

BCA serves a number of carriers including British Airways, Aer Lingus and Air France-KLM, all of which have had to suspend most of their flights amid travel bans across the world as countries struggle to control the spread of the coronavirus.

The pandemic also shows no signs of slowing down, with some analysts warning that people could be hunkering down for the long-term.

“This crisis is set to be a marathon, not a sprint”, said Robert Alster, head of investment services at Close Brothers Asset Management, who added that “more large-scale and targeted financial intervention” from the UK government was expected as the scale of the economic slowdown became apparent.

The rout also is not confined to equities, with sterling having fallen 0.8% against the dollar to US$1.1962 as investors pile into the haven that is the US dollar.

9.40am: Oil majors hit by crude price slide

The pressure on the FTSE’s oil majors has continued on Wednesday morning with prices of brent crude sliding 1.8% to US$29.85 a barrel.

Crude’s rapid decline following the start of an oil price war between Saudi Arabia and Russia has already piled pressure on the oilers, however, with the latest decline shares in Royal Dutch Shell PLC (LON:RDSB) fell 6.4% to 961p while BP PLC (LON:BP.) was down 5.9% at 244.3p.

“The falling out between Saudi Arabia and Russia may have been the catalyst for the recent biggest slide in oil prices since the Gulf War earlier this month, but it’s likely to be the rolling lock downs that are taking place across the world that could see prices fall even further”, said Michael Hewson at CMC Markets UK.

“With oil demand set to fall sharply and the coronavirus lockdowns set to suppress consumer demand for weeks and possibly months we could well see a bloodbath in the US shale industry, while the more established players could well find themselves having to slash their dividends”, he added.

Meanwhile, the FTSE 100 had continued to slump following its opening plunge and was down 260 points at 5,035 shortly before 9.40am.

8.25am: Another bad day

It wasn’t quite as bad as predicted, but it certainly wasn’t another day in paradise for traders in London’s Square Mile as they watched the FTSE 100 index tumble yet again.

In opening trading, the index of UK leading shares tanked 190 points to 5,104.28

For all the plaudits Chancellor of the Exchequer Rishi Sunak won for his business bail-out programme, the markets remained worried over the impact of the coronavirus pandemic.

Even America’s imminent readying of the bazooka of around US$1.2 trillion of support doesn’t appear to have done much for the nerves.

“The global demand shock will certainly be harder than the post-2008 period, as this time, planes are grounded, shops, restaurants, cinemas, theatres and all public places are closed for weeks,” said analyst Ipek Ozkardeskaya at Swissquote Bank.

“All layers of the population are hit, both financially, physically and psychologically.”

It was a mixed bag of fallers with the Chilean copper producer Antofagasta (LON:ANTO) the biggest casualty after results yesterday, followed by a ragtag band of other miners, including Rio Tinto (LON:RIO).

Broadcaster ITV (LON:ITV) was off 8% on advertising fears, while WPP (LON:WPP), was marked down 7% with traders anticipating major cuts to marketing budgets.

Despite warning of the “unprecedented challenges”, Morrisons (LON:MRW) seemed to be one of the few beneficiaries of the coronavirus outbreak, with underlying sales up 5%.

Proactive news headlines:

Synairgen PLC (LON:SNG) said it has received approval to launch a phase II clinical trial of its lead drug in patients with COVID-19. SNG001 is an inhaled formulation of interferon-beta-1a and is currently being developed to treat people with chronic obstructive pulmonary disease (COPD) that also have respiratory viral infections.

Europa Oil & Gas Holdings PLC (LON:EOG), Union Jack Oil PLC (LON:UJO) and its partners described the Wressle oil field development project, onshore UK, as “economically robust in the current low oil price environment”. In a statement, the partners respectively conveyed the findings of the operator, Egdon Resources Plc’s (LON:EOG) updated model which estimated a US$17.62 per barrel break-even oil price for the project.

Live Company Group PLC (LON:LVCG) has inked an agreement with The Copyrights Group Limited to produce a BRICKLIVE tour themed around the Paddington Bear brand. Under the agreement, the media firm’s subsidiary Brick Live International (BLI) will produce and exhibit a themed trail of Paddington Bear models around the UK, Ireland and the Channels Islands, with the first tour due to launch later in 2020.

Integumen PLC (LON:SKIN) said it has signed a three-year deal with Modern Water worth a headline £3.12mln. It will manufacture and provide logistical support for the latter’s monitoring reagent consumables. In the same announcement, Integumen said it was doubling the size of Labskin Laboratories in York in the second quarter to 6,000 square feet, adding six more laboratory rooms in order to meet growing demand.

Curtis Banks PLC (LON:CBP) said a good response to its new SIPP product helped self-administered pension specialists boost revenues and profits in the year just ended. The group's revenue, which comes largely from pension fees, rose by 6% to £48.9mln while better margins helped profits increase by 11% on an underlying basis to £13.4mln.

Curzon Energy PLC (LON:CZN) has announced the signing of a letter of intent which envisages the 100% acquisition of the London Critical Metals Market (LCMM).  The LCMM aims to be the “first unified global metals trading exchange for critical metals that have few or no direct investment or trading options elsewhere in the world,” Curzon noted.

Jersey Oil and Gas PLC (LON:JOG) told investors it is fully funded as it continues to progress the Greater Buchan Area (GBA) field development, which will be concept selection work. In a statement addressing market weaknesses in light of the coronavirus (COVID-19) pandemic, the company said that it has no debt and, on current plans, it has sufficient working capital through to the end of 2021.

Vast Resources PLC (LON:VAST) has confirmed the departure of a shipment containing equipment from China bound for Romania. The company said the equipment for use at its Baita Plai polymetallic mine in Romania is presently expected to arrive at the port of Constanta by 23 April, according to the shipping company. A further 3-4 shipment containers are due for departure later this week, Vast noted.

Motif Bio PLC (LON:MTFB) said it has had no luck in finding a buyer for its legacy assets, including the phase III antibiotic iclaprim, and the cash shell warned “there can be no assurance” of a deal. While it is eking out what remaining funds it has its financial reserves are only likely to last until May, investors were told in a statement. In the meantime, it is looking for a reverse takeover candidate with a July 28 deadline to broker such a transaction.

accesso Technology Group PLC’s (LON:ACSO) chief executive has hailed “positive momentum” in the firm’s key performance metrics as it aimed to build its recurring revenue base in the coming year. In a statement accompanying accesso’s full-year results, Steve Brown, CEO of the electronic queuing specialist, said transactional revenues were continuing to “grow double-digit” and now accounted for 80% of total revenues while the group had also “realised strong results in eCommerce transactional revenue and virtual queuing sales”. Looking ahead, accesso said trading in the first two months of 220 had been “in line” with management expectations, although since mid-March the outbreak of coronavirus has been “significantly impacting” guest visitation across its client’s sites, impacting the firm’s transactional-based revenues.

Immotion Group PLC (LON:IMMO) has said it is reducing operating costs and has “a healthy cash balance” as it joins other firms in supporting itself against the effects of the coronavirus outbreak. In an update on Tuesday afternoon, the virtual reality (VR) firm said over the last few days trading at a number of its sites had been “significantly impacted” as attendee numbers fell and a number of its partners reduced opening hours or, in some cases, closed.

Westminster Group PLC (LON:WSG), a leading supplier of managed services and technology-based security solutions worldwide, has provided another update on the current effects of coronavirus on its business. The company said that whilst its West African airport operations have been seeing record passenger number over the past few months, the announcements this week that governments in many parts of the world are restricting and cancelling flights in response to the coronavirus (COVID-19) pandemic, will have an inevitable impact on revenues from this part of our operations.

Collagen Solutions PLC (LON:COS) has warned that it expects its full-year loss will be materially greater than anticipated due to increased costs from a development and manufacturing contract which has taken longer than originally anticipated and also flagged up coronavirus (COVID-19) impact concerns. In a trading update for the year ended 31 March 2020 and a statement regarding the COVID-19 outbreak, the AIM-listed developer and manufacturer of biomaterials for the enhancement and extension of human life said the related accounting treatment requires a one-time write-down of around £900,000 recognising the full loss over the life of the development portion of the contract only.

Walls & Futures REIT PLC (LON:WAFR) the ethical housing investor and developer announced that for the calendar year ending 2019, its portfolio outperformed its benchmark, the MSCI UK Residential Index, by 23.0% to 4.4%. Joe McTaggart, CEO of Walls & Futures commented: "We are extremely pleased with the portfolio performance. The value growth created further validates our investment strategy of originating our investments and real estate development as opposed to acquiring ready-made portfolios from third parties."

6.45am: Triple-digit fall predicted 

The FTSE 100 is expected to see another triple-digit fall on Wednesday as a £350bn rescue package announced by the UK government to defend the economy against the coronavirus pandemic failed to assuage the market panic.

Spread-better IG expects the FTSE 100 to open 277 points lower on Wednesday morning, more than wiping out the gains from Tuesday’s session when the index closed up 144 points at 5,295.

The positivity around whether governments can help to avoid an economic catastrophe through stimulus measures seems to be fading as the magnitude of the outbreak begins to take hold, rattling markets.

This was despite Chancellor of the Exchequer Rishi Sunak announcing billions of pounds of support for businesses after Tuesday’s close as well as mortgage repayment holidays for those who employment is affected.

Hopes of an economic stimulus also helped drive US markets higher overnight, with the Dow Jones Industrials Average rising 5.2% to 21,237 while the S&P 500 added 6% to 2,529 and the Nasdaq Composite jumped 6.2% to 7,334, as the White House proposed a US$1trn emergency cash injection amid expectations of a spike in infections.

Asian markets also rebounded initially on the US stimulus hopes, however, as Wednesday’s session, progressed Japan's Nikkei 225 fell 1.7% while Hong Kong’s Hang Seng dropped 2.7%.

Traders will be eyeing the Fed’s meeting later today for direction, however with interest rates already cut to zero investors will be looking to see how much firepower chair Jerome Powell has left in reserve to bolster the tanking economy.

The Fed’s next move could provide some catalysts for movement in the pound, which is currently up 0.3% at US$1.2097 against the dollar.

Significant announcements expected for Wednesday:

Federal Reserve interest rate decision

Finals: WM Morrison Supermarkets PLC (LON:MRW), Ferrexpo PLC (LON:FXPO), Anpario PLC (LON:ANP), Cello Health PLC (LON:CLL), Centaur Media PLC (LON:CAU), Curtis Banks Group PLC (LON:CBP), EMIS Group plc (LON:EMIS), Empiric Student Property PLC (LON:ESP), Empresaria Group plc (LON:EMR), Gamesys Group PLC (LON:GYS), Judges Scientific PLC (LON:JDG), Pendragon PLC (LON:PDG), Science In Sport PLC (LON:SIS), Strix Group PLC (LON:KETL), Tribal Group plc (LON:TRB)

Interims: MJ Hudson Group PLC (LON:MJH)

Around the markets:

  • Sterling: US$1.2097, up 0.3%
  • Brent crude: US$30.25 a barrel, down 0.5%
  • Gold: US$1,511 an ounce, down 0.9%
  • Bitcoin: US$5,231, down 2%

City headlines:

Rishi Sunak has rolled out a £350 billion rescue package to keep Britain’s businesses and workers afloat through a coronavirus crisis that could last more than a year – The Times

HSBC has appointed company “lifer” Noel Quinn as its permanent chief executive – Financial Times

Most pubs and restaurants would be unable to claim on their insurance on virus shutdown as Covid-19 was not included in the list of covered risks – Daily Telegraph

Britain’s financial regulator has instructed banks and investment managers to take a flexible approach to loan repayments, account fees and savings withdrawal penalties – Financial Times

Nissan has mothballed the biggest car plant in the UK as the Covid-19 outbreak wreaks havoc. Production at the giant factory in Sunderland, which employs around 6,000 workers, will be suspended indefinitely – Daily Mail

Online retail giant Amazon is stopping sellers from sending non-essential items to its UK and US warehouses until 5 April, to make space for vital items needed by its customers during the coronavirus outbreak – Guardian

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