(Alliance News) - London's stocks ended firmly in the red on Monday as the US Federal Reserve's latest measures to support a virus-stricken economy failed to boost spirits.
The FTSE 100 index closed down 196.89 points, or 3.8%, at 4,993.89.
The FTSE 250 ended down 514.63 points, or 3.8%, at 13,078.01, and the AIM All-Share closed down 27.22 points, or 4.4%, at 596.36.
The Cboe UK 100 ended down 3.6% at 8,418.28, the Cboe UK 250 closed down 2.5% at 11,412.43, and the Cboe Small Companies ended down 1.4% at 7,506.73.
In European equities on Monday, the CAC 40 in Paris ended down 3.3%, while the DAX 30 in Frankfurt ended down 2.1%.
"For the umpteenth time since the coronavirus crisis took hold, the Fed offered the markets an unprecedented package, only to have the door slammed in its face," said Connor Campbell at Spreadex.
"Combine this with all the previous measures taken by the Fed – the rate cuts, cash injections and the like – and you have a staggering amount of monetary policy announced in less than a month," said Campbell.
"Yet look at the markets and you'd think the Fed hadn't done a single thing."
The Fed before the New York market open on Monday unveiled "extensive" new measures to support the economy amid the Covid-19 outbreak.
"The coronavirus pandemic is causing tremendous hardship across the US and around the world. Our nation's first priority is to care for those afflicted and to limit the further spread of the virus. While great uncertainty remains, it has become clear that our economy will face severe disruptions," the Fed said.
The Federal Open Market Committee will purchase Treasury securities and agency mortgage-backed securities "in the amounts needed to support smooth market functioning".
The US central bank will establish two facilities to support credit to large employers, as well as a third to support the flow of credit to consumers and businesses. In addition, the US central bank said it soon will announce a programme to support lending to small and medium-sized businesses.
Wall Street failed to find much comfort in the measures, as the number of coronavirus cases continues to climb.
Stocks in New York were in negative territory at the London equities close, with the Dow Jones down 3.1%, the S&P 500 index down 3.8%, and the Nasdaq Composite down 2.2%.
The global death toll from the virus has now surged past 15,000, with nearly a billion people confined and non-essential businesses shut in dozens of countries and growing fears about a recession.
Meanwhile, US President Donald Trump hinted strongly he is running out of patience with the economic shutdown caused by mass quarantine measures against the coronavirus.
"WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!" Trump tweeted overnight.
The 15-day period he refers to was started last Monday, setting in motion a series of federal recommendations on social distancing and other anti-coronavirus measures. It concludes a week from Tuesday.
His tweet came after a trillion-dollar Senate proposal to rescue the reeling US economy crashed to defeat Sunday after receiving zero support from Democrats, and with five Republicans absent from the chamber because of virus-related quarantines.
In Germany, ministers agreed to blast through a constitutional limit on government deficits with EUR156 billion of new borrowing to fight Covid-19.
Speaking alongside Scholz, Economy Minister Peter Altmaier warned the crisis could slash German GDP this year by "at least as much" as during the 2008 to 2009 financial crisis when it plunged 5%.
The EUR156 billion Berlin will raise from new debt covers more than EUR122 billion in new spending and an expected tax shortfall of over EUR33 billion compared with projections made before the coronavirus crisis struck.
The euro stood at USD1.0741 at the European equities close Monday, against USD1.0700 at the same time on Friday. The pound was quoted at USD1.1471, compared to USD1.1745.
Against the yen, the dollar was trading at JPY111.47 compared to JPY111.33.
Gold was quoted at USD1,543.08 an ounce, up sharply from USD1,488.90.
In London, Pearson shares closed down 10% after the educational publisher paused its share buyback as it identified three trends in current trading as a result of the Covid-19 outbreak.
The first trend identified by Pearson is uncertainty in the group's businesses that rely on learners and staff accessing physical sites.
These businesses include Pearson VUE, the Pearson Test of English, US Student Assessments and higher institutions in South Africa, which is expected to hurt group profit. This is particularly true in the US, where test cancellations in several states are expected to lower operating profit for 2020 by GBP15 million.
However, the second and third trends were more positive, with a significant uplift in the use of Pearson's digital products and services and growing interest in its Global Online Learning units.
Associated British Foods ended down 8.0% after the firm warned it stands to lose around GBP650 million per month in net sales from the closure of all 376 Primark stores in 12 countries until further notice due to the Covid-19 pandemic.
The FTSE 100-listed company, however, said it has not seen a material impact from the virus on its other divisions - sugar, grocery, ingredients and agriculture businesses.
Royal Dutch Shell shares ended higher, with 'A' shares up 6.6% and 'B' shares up 4.1%. The oil major suspended its share buyback but left its dividend untouched.
Brent oil was quoted at USD25.30 a barrel Monday, down from USD27.31.
Elsewhere in London, Kingfisher shares ended up 12%. The DIY retailer said it is seeing higher demand for its products following a sales slip in its most recently ended financial year.
Kingfisher said sales in the twelve months to the end of January declined by 1.5% to GBP11.51 billion. On a constant currency basis, sales fell by 0.8%, the company noted. The FTSE 100-listed company said it will not be paying a dividend for its most recently ended financial year amid uncertainty caused by Covid-19.
In February, its like-for-like sales were 7.6% higher year-on-year, or up 2.3% excluding the leap year impact. In the first two weeks of up to and including March 14, Kingfisher's like-for-like sales continued to be "positive", it said, with growth across all businesses within the core markets, strongly supported by e-commerce sales.
Hyve shed 20% after the exhibitions and conferences firm said it has activated a large-scale postponement plan per region due to government restrictions aimed at containing the Covid-19 outbreak.
Earlier in March, the exhibitions and conferences firm said the coronavirus outbreak has led to the postponement of several events and a significant disruption across multiple geographies and sectors. It had said it expects a hit between GBP17 million to GBP19 million on revenue for its year ending September 30, translating to a GBP16 million to GBP18 million dent in profit.
On Monday, the FTSE 250-listed company said its postponement plan will be larger than previously expected, adding that should the situation worsen, more events will have to be moved.
In the UK corporate calendar for Tuesday, IQE, in line with a request from the Financial Conduct Authority for all London-listed companies to postpone the release of their annual results for at least two weeks amid the Covid-19 pandemic, will now be putting out a trading statement.
Research and data firm YouGov and cloud services provider essensys are scheduled to release half-year results.
In the economic calendar on Tuesday, there are composite PMIs from Germany, the eurozone, the UK and the US at 0830 GMT, 0900 GMT and 0930 GMT respectively.
By Lucy Heming; lucyheming@alliancenews.com
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