London midday: Stocks extend losses amid worries about Covid-19 impact

London stocks had fallen further into the red by midday on Wednesday amid renewed concerns about the economic impact of the Covid-19 pandemic.

The FTSE 100 was down 2.1% at 5,670.65.

Sentiment took a knock after the International Monetary Fund warned that the world economy would suffer its worst recession in 2020 since the Great Depression, 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.

IG analyst Joshua Mahony said: "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. 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.

"Oil prices have grabbed the headlines once again this morning, 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. However, with the group having difficulty achieving the 9.7m bpd cut, 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."

In equity markets, there were more Covid-19 updates to sift through.

Outsourcer Equiniti 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 hailed 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 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 as it posted a drop in first-quarter total assets under management.

Insurance group Hastings said 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.

Ferguson withdrew 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.

Market Movers

FTSE 100 (UKX) 5,670.65 -2.08%
FTSE 250 (MCX) 15,527.88 -3.45%
techMARK (TASX) 3,393.16 -1.88%

FTSE 100 - Risers

Ocado Group (OCDO) 1,551.50p 4.51%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,016.00p 2.06%
AstraZeneca (AZN) 7,707.00p 1.33%
GlaxoSmithKline (GSK) 1,590.60p 1.31%
British American Tobacco (BATS) 2,944.50p 0.89%
Severn Trent (SVT) 2,293.00p 0.70%
Halma (HLMA) 2,033.00p 0.69%
Flutter Entertainment (FLTR) 7,476.00p 0.46%
Hikma Pharmaceuticals (HIK) 2,287.00p 0.44%
Spirax-Sarco Engineering (SPX) 8,384.00p 0.41%

FTSE 100 - Fallers

Melrose Industries (MRO) 88.22p -8.30%
Intermediate Capital Group (ICP) 933.00p -7.72%
Meggitt (MGGT) 244.60p -7.52%
easyJet (EZJ) 621.20p -7.26%
Pearson (PSON) 501.00p -7.02%
Rolls-Royce Holdings (RR.) 313.10p -6.68%
Anglo American (AAL) 1,348.80p -6.26%
ITV (ITV) 68.24p -5.88%
Lloyds Banking Group (LLOY) 29.92p -5.87%
Standard Life Aberdeen (SLA) 209.70p -5.50%

FTSE 250 - Risers

Hastings Group Holdings (HSTG) 190.30p 4.27%
Rank Group (RNK) 172.40p 2.50%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,016.00p 2.06%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,326.00p 2.00%
Apax Global Alpha Limited (APAX) 127.40p 1.92%
Genus (GNS) 3,486.00p 1.63%
Petropavlovsk (POG) 23.90p 1.06%
JPMorgan American Inv Trust (JAM) 414.00p 0.85%
Impax Environmental Markets (IEM) 277.00p 0.73%
PureTech Health (PRTC) 265.50p 0.57%

FTSE 250 - Fallers

Hiscox Limited (DI) (HSX) 706.00p -16.19%
Premier Oil (PMO) 23.50p -15.07%
Frasers Group (FRAS) 213.80p -11.87%
Hochschild Mining (HOC) 125.50p -11.43%
Aston Martin Lagonda Global Holdings (AML) 56.75p -11.33%
Cairn Energy (CNE) 91.25p -11.06%
Network International Holdings (NETW) 391.80p -11.00%
Energean Oil & Gas (ENOG) 675.00p -10.36%
Airtel Africa (AAF) 40.00p -9.91%
FirstGroup (FGP) 65.65p -9.70%