London close: Benchmark keeps head above water after dire US jobs report

London’s benchmark managed to close just above the waterline on Wednesday, despite the release of dire UK construction figures, as investors digested a dire private sector jobs report from the United States.

The FTSE 100 ended the session up 0.07% at 5,853.76, while the FTSE 250 lost 0.69% to finish at 15,982.47.

Sterling was weaker against both of its major trading pairs, falling 0.6% against the dollar to last trade at $1.2361, and losing 0.34% on the euro to €1.1433.

“Tentative gains throughout Europe have mimicked sentiment in Asia, with traders understandably lacking conviction given the plethora of contradictory drivers which are in play,” said IG analyst Joshua Mahony.

“Hopes of a return to relative normality have been boosted by the talk of Disney reopening in Shanghai, signalling a potential future where businesses can operate without the need to await a coronavirus vaccine.

Mahony said that, while fears remained over the potential breakdown in relations between the US and China, the lack of any evidence that this virus originated from a Wuhan lab highlighted the feeling that the accusations would likely evolve into “the lesser issue” of failing to notify the world fast enough.

Late in the day, data from the US showed that private-sector companies shed a massive 20.2 million jobs last month after many were forced to shutter during the nationwide shutdown, according to Automatic Data Processing.

The data was seen as foreshadowing what was expected to be a similarly massive drop in the government's official employment report on Friday.

Oil prices also began to slide towards the end of the European day, having earlier enjoyed some fair gains, with Brent crude last down 6.39% at $28.99 per barrel, and West Texas Intermediate off 5.58% at $23.19.

On home turf, data showed activity in the construction sector slumped to a record low in April as builders shut sites due to the Covid-19 outbreak.

The Markit/CIPS construction purchasing managers’ index slid to 8.2 from 39.3 in March, coming in well below expectations for a reading of 28.0 and making the lowest level since data was first collected in April 1997.

Its previous record low was 27.8 in February 2009.

A reading above 50 signals expansion while a reading below indicates contraction.

Around 86% of respondents reported a reduction in business activity since March, reflecting widespread site closures and shutdowns across the supply chain in response to the coronavirus pandemic.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said April’s figures delivered more worrying news for fragile construction businesses as the effects of the coronavirus continued to ripple across supply chains, devastating productivity.

"Though a fall in output was not a complete surprise, the scale and suddenness of the drop has knocked the wind out of building work in the UK," he said.

"More vulnerable than other sectors that make up the UK economy, construction was unable to continue in any significant capacity, as companies grappled with furloughed staff and building sites under complete shutdown."

In equity markets, ITV finished up 3.02% even as the broadcaster reported a slump in April advertising revenues and a drop in total first-quarter revenues as it took a hit from the pandemic.

Online supermarket Ocado rallied 5.57% as it reported a hefty 40.4% rise in second-quarter retail revenue, but pulled full year guidance as Britons had food supplies delivered during the lockdown.

That growth compared to 10.3% in its first quarter.

On the downside, cruise operator Carnival fell 5.39%, Premier Inn owner Whitbread lost 1.98%, hotel chain InterContinental Hotels was 2.97% weaker and budget airline easyJet descended 3.31%, amid ongoing consternation about the impact of the pandemic on travel and tourism.

Market Movers

FTSE 100 (UKX) 5,853.76 0.07%
FTSE 250 (MCX) 15,982.47 -0.69%
techMARK (TASX) 3,573.61 0.55%

FTSE 100 - Risers

Ocado Group (OCDO) 1,772.50p 5.57%
Hikma Pharmaceuticals (HIK) 2,490.00p 5.20%
Intermediate Capital Group (ICP) 1,138.00p 3.93%
AstraZeneca (AZN) 8,830.00p 3.74%
Aveva Group (AVV) 3,709.00p 3.66%
RSA Insurance Group (RSA) 369.40p 3.21%
ITV (ITV) 74.36p 3.02%
Admiral Group (ADM) 2,508.00p 2.79%
Smith (DS) (SMDS) 310.30p 2.75%
M&G (MNG) 127.30p 2.66%

FTSE 100 - Fallers

Pearson (PSON) 431.60p -7.16%
Carnival (CCL) 908.80p -5.39%
Meggitt (MGGT) 251.90p -4.58%
Royal Dutch Shell 'B' (RDSB) 1,230.60p -4.11%
Royal Bank of Scotland Group (RBS) 108.20p -4.04%
Royal Dutch Shell 'A' (RDSA) 1,285.80p -3.73%
easyJet (EZJ) 519.20p -3.31%
Associated British Foods (ABF) 1,696.00p -3.20%
Centrica (CNA) 39.15p -3.05%
InterContinental Hotels Group (IHG) 3,432.00p -2.97%

FTSE 250 - Risers

Hiscox Limited (DI) (HSX) 758.80p 9.59%
Renishaw (RSW) 3,572.00p 5.74%
Kainos Group (KNOS) 733.00p 5.16%
Direct Line Insurance Group (DLG) 284.00p 4.45%
Virgin Money UK (VMUK) 74.42p 4.38%
Hyve Group (HYVE) 21.45p 3.87%
Hastings Group Holdings (HSTG) 184.30p 3.49%
Ashmore Group (ASHM) 372.60p 3.39%
Dunelm Group (DNLM) 905.50p 3.25%
Synthomer (SYNT) 278.80p 3.18%

FTSE 250 - Fallers

Hammerson (HMSO) 51.22p -14.29%
SSP Group (SSPG) 217.40p -11.27%
WH Smith (SMWH) 985.50p -9.84%
Grafton Group Units (GFTU) 581.50p -6.74%
Cairn Energy (CNE) 111.20p -6.40%
Computacenter (CCC) 1,413.00p -6.36%
Pets at Home Group (PETS) 238.60p -5.69%
PureTech Health (PRTC) 241.50p -5.48%
Cineworld Group (CINE) 52.80p -5.41%
Petrofac Ltd. (PFC) 174.00p -5.41%