(Alliance News) -Â Stocks in London were substantially lower at midday on Monday, led by oil majors following a record crash in crude prices.
The FTSE 100 index of large-cap stocks was down 107.89 points, or 1.9%, at 5,704.94. The mid-cap FTSE 250 was down 266.64 points, or 1.7%, at 15,556.09, and the AIM All-Share was down 0.7% at 758.15.
The Cboe UK 100 was down 1.7% at 9,650.72, the Cboe UK 250 was down 1.8% at 13,351.74, and the Cboe Small Companies down 0.9% at 8,728.74.
In European equities on Tuesday, the CAC 40 in Paris was down 2.6%, while the DAX 30 in Frankfurt was down 2.7%.
"European stock markets opened lower on Tuesday as energy shares led benchmarks down following yesterday's historic rout on oil. Analysts and traders clearly didn't expect black gold to go below zero, and this has unsurprisingly had a negative impact on European oil majors like Total and Eni, which are currently trading 5% lower and in such a bearish environment their bottom may still be considerably lower still," said Pierre Veyret, technical analyst at ActivTrades.
US benchmark West Texas Intermediate for May delivery closed at minus USD37.63 in New York. According to CME, May WTI was trading at minus USD6.30 on Tuesday.
The May futures contract expires Tuesday, meaning traders of the commodity for profit need to find someone to take physical possession of the oil. But with the glut in markets and storage facilities full, buyers have been scarce.
Oil markets have plunged in recent weeks as lockdowns and travel restrictions to fight the coronavirus around the world cripple demand.
Brent oil, the international crude benchmark, was quoted at USD20.28 a barrel midday Tuesday, down sharply from USD26.22 late Monday.
In London, BP shares were down 4.0% while Royal Dutch Shell 'A' and 'B' shares were down 3.1% and 4.6% respectively. In Milan, Eni was down 4.8% in afternoon trade, and Total down 4.1% in Paris.
In New York, Chevron shares were trading 4.0% lower in the Tuesday pre-market, and Exxon Mobil was down 3.8%.
Wall Street is pointed to a lower start on Tuesday, with the Dow Jones called down 1.4%, the S&P 500 down 1.0% and Nasdaq down 0.5%.
ActivTrades's Veyret added: "Elsewhere traders welcomed lower trends of coronavirus cases from many of the worst-affected areas, which helped sustain positive market sentiment for non-energy sectors. However, all eyes will be on today's earning reports with many large caps such as Procter and Gamble, Texas Instrument, Netflix and Lockheed Martin publishing their Q1 results, and this could significantly increase market volatility in the afternoon."
In Europe, hard hit by coronavirus, several countries were cautiously creeping out from confinement measures, buoyed by mounting signs the worst of the virus may be behind them.
Chancellor Angela Merkel warned Germany was "still a long way from being out of the woods", as she allowed smaller shops from florists to fashion stores to reopen.
There were also encouraging signs in other major European countries such as Italy, France and the UK, although authorities warned citizens against letting their guard down.
In a now outdated jobs report, the Office for National Statistics early Tuesday reported the UK unemployment rate edged higher in the three months to February.
Joblessness in the UK increased to 4.0% in February, prior to the major impact of the new coronavirus outbreak, up from 3.9% in January. Consensus estimates had expected the jobless rate to remain at 3.9%.
Growth in average earnings including bonuses came in at 2.8% in February, slower than 3.1% in January. Average earnings excluding bonuses growth slipped to 2.9% in February from 3.1%.
Capital Economics said the "small crack" opening up in the labour market "may soon turn into a chasm".
"We think that it is a matter of months before the ILO unemployment rate rises from 4% to almost 9% and households real disposable incomes fall by almost 10%," said Capital Economics.
The pound was quoted at USD1.2337 Tuesday midday, lower than USD1.2458 at the London equities close Monday. The euro was quoted at USD1.0835, down from USD1.0873 late Monday.
Against the yen, the dollar was trading at JPY107.44, down from JPY107.72.
"Gold is continuing to pare gains, with the dollar putting downward pressure on the yellow metal as it continues to perform well in these risk-averse markets. Gold held up quite well around USD1,680 yesterday but with that level coming under pressure already again today, it's looking quite vulnerable," said Craig Erlam at Oanda.
Gold was quoted at USD1,679.16 an ounce Tuesday morning, down from USD1,692.55 late Monday.
Despite this, gold miners were among the risers in the FTSE 100 at midday, with Fresnillo up 1.6% and Polymetal up 1.3%.
Elsewhere in the blue-chip index, shares in Associated British Foods were down 4.0% as it took a GBP248 million inventory charge in the first half.
In the six months to February 29, revenue climbed 1.5% year-on-year to GBP7.65 billion from GBP7.53 billion. However, pretax profit plunged 42% to GBP298 million from GBP515 million a year prior as exceptional costs multiplied to GBP309 million from GBP79 million.
AB Foods said it recognised a GBP248 million inventory charge, a GBP36 million provision for a onerous contract, and a GBP25 million exceptional cost following fire damage at a baked goods factory in Wakefield, West Yorkshire.
An inventory value assessment has been conducted in response to Primark store closures due to the Covid-19 pandemic, AB Foods explained, and much was found to have little remaining value.
Halma shares rose 2.9% as the hazard detection and life protection company said it expects to report improved earnings for the recently completed financial 2020 but warned that the Covid-19 outbreak may hurt results through to the second half of financial 2021.
For its financial year that ended in March, Halma said it expects to report revenue of GBP1.33 billion, up from GBP1.21 billion the year prior.
Adjusted pretax profit is expected to be between GBP265 million and GBP270 million which, while lower than the previous forecast of GBP275.5 million, is higher than the adjusted pretax profit of GBP245.7 million recorded for financial 2019.
Halma said that while it still expects the outbreak to hurt its results for the year to the end of March 2021 - which is expected to have a "significant" second-half weighting - it remains confident of its growth prospects.
Croda International was up 1.9% after Liberum upped the specialty chemicals firm to Buy from Hold.
In the FTSE 250, Capita was down 8.9% after Goldman Sachs removed the outsourcer from its Conviction Buy list.
By Lucy Heming;Â lucyheming@alliancenews.com
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