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FTSE drops as banks scrap dividends on coronavirus fears – live updates

FTSE drops as banks scrap dividends on coronavirus fears – live updates

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Good morning. Markets are set to slump this morning as investors weigh up President Donald Trump’s comments that Americans should prepare for a “very, very painful two weeks” due to Covid-19. Mr Trump said the US death toll could reach nearly a quarter of a million even if strict social distancing guidelines were followed.  It comes…

Good morning. Markets are set to slump this morning as investors weigh up President Donald Trump’s comments that Americans should prepare for a “very, very painful two weeks” due to Covid-19.

Mr Trump said the US death toll could reach nearly a quarter of a million even if strict social distancing guidelines were followed. 

It comes after the FTSE 100 closed out its worst quarter since 1987 with a mild rally yesterday. The index lost 25pc over the quarter – its worst drop since the final three months of 1987, when the infamous Black Monday crash contributed to a 28pc write-off.

The start to the second quarter is not looking much better. The blue-chip index is set to open more than 4pc in the red this morning. 

5 things to start your day

1) Banks axe dividends and bonuses: In a series of coordinated announcements, Barclays, RBS, HSBC, Standard Chartered and Lloyds said they would scrap their outstanding dividends for 2019 and would not return money to shareholders this year following a request from the Bank of England.

2) The five economies coronavirus will hit the hardest revealed: Which nation will be hit hardest? It depends first on the extent of the outbreak locally and in key export and import markets. The success or failure of efforts by governments and central banks matters, as they can determine the pace of recovery afterwards.

3) About 11m people have downed tools across Britain as Covid-19 forces employers to shut down factories, offices and building sites to slow the spread, according to a major new survey. The forced stop to the economy means as many one in three workers are now at home and unable to do their jobs, the study by Bank of America has found.

4) JD Sports has become the latest high street chain to stop paying rent to its landlords as the coronavirus outbreak takes its toll on retailers. The FTSE 100 sports company said it has not paid the quarterly rent for its 390 stores in the UK which was due last week, the Guardian reported.

5) Newspapers call for advertisers to allow their content be published alongside coronavirus stories: If the pandemic lasts for another three months, the total loss to publishers is expected to be £50m due to blocklists

What happened overnight

Stocks in Japan hit session lows in the final hour of trading, down about 4pc. Hong Kong shares were also lower, with two of the city’s largest lenders, Standard Chartered and HSBC, suspending dividend payments because of the virus.

Chinese shares outperformed as a private reading on the country’s manufacturing sector beat expectations, rebounding in March. 

The China Caixin manufacturing PMI rebounded to 50.1 in March, surging back into growth territory and joining the official Chinese measure that also beat consensus on Tuesday

However, factory activity contracted sharply across most of Asia in March as the coronavirus pandemic paralysed economic activity across the globe, with sharp falls in export powerhouses Japan and South Korea overshadowing the modest improvement in China.

Manufacturing gauges also tumbled in Indonesia, Vietnam and the Philippines, Purchasing Managers’ Index (PMI) surveys showed on Wednesday, underscoring the widening damage brought by the pandemic that has infected more than 700,000 people, upended supply chains and led to lockdowns worldwide.

Coming up today

Full-year results: Central Asia Metals, Primary Health Properties

Trading statement: Renew Holdings, Topps Tiles

Economics: Manufacturing PMI final (UK, eurozone, US), ADP employment, durable goods orders (US)

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