(Alliance News) - Stocks in London ended lower on Friday following a dire US jobs report sparked by the Covid-19 pandemic as cases topped a million worldwide.
The FTSE 100 index closed down 64.72 points, or 1.2%, at 5,415.50, ending the week down 7.0%.
The FTSE 250 ended down 337.59 points, or 2.3%, at 14,099.21, ending the week down 8.3% and the AIM All-Share closed down 5.72 points, or 0.9%, at 659.25, ending the week down 3.0%.
The Cboe UK 100 ended down 1.2% at 9,159.62, the Cboe UK 250 closed down 2.4% at 12,133.22, and the Cboe Small Companies ended down 0.5% at 7,935.75.
In Paris the CAC 40 ended down 1.6%, while the DAX 30 in Frankfurt ended down 0.5%.
IG Group's Chris Beauchamp said: "Stocks are once again edging lower as the weekend draws near, after non-farm payrolls in the US provided a stark reminder of the gravity of the economic crisis. In the financial crisis, it took months for the payrolls figure to hit this level, and by this point the global economy was arguably closer to the end than the beginning. This time around, things have got much worse much more quickly, and we have only just begun the run of bad data.
"To mangle a phrase, we are not at the beginning of the end, or even the end of the beginning; to all intents and purposes, we are barely past the very beginning of the crisis. Months of dire economic data lie ahead of not just the US economy, but the other major economies as well. In such an environment, it is perhaps surprising that stock markets have not suffered more, but if previous crises are anything to go, we have months of declines ahead of us."
In the FTSE 250, transport operators ended in the green welcoming financial support from the UK government for the bus sector amid the collapse in demand caused by Covid-19.
Go-Ahead Group closed up 13%, National Express up 3.9%, FirstGroup up 10%, and Stagecoach up 4.5%.
Bus companies in England will receive almost GBP170 million in new government funding to ensure services continue to operate during the coronavirus pandemic. UK Transport Secretary Grant Shapps said on Friday the investment will protect crucial local transport links across England for those unable to work from home.
FirstGroup Chief Executive said he was "pleased" with the help, while his counterpart at Go-Ahead Group David Brown said he was "very pleased". Stagecoach said the aid was "welcome".
The pound was quoted at USD1.2221 at the London equities close, down sharply from USD1.2402 at the close Thursday, amid disappointing UK purchasing managers index data.
The UK services sector registered its biggest decline in survey history in March, IHS Markit-CIPS reported. The services PMI read 34.5 in March, compared to the initial flash figure of 35.7 and the 53.2 recorded in February.
Any reading below the no-change mark of 50 indicates a contraction of the sector, and one above expansion.
The previous record low had been recorded at the height of the global financial crisis in 2008-09, IHS Markit said, and March's performance was "by far" the worst since the survey began in July 1996. The composite PMI, which encompasses both services and manufacturing, slumped to 36.0 in March, compared to the flash reading of 37.1 and February's 53.0.
The UK economy is "almost certain" to experience deep contraction in the second quarter of 2020, said Markit's Tim Moore.
The euro stood at USD1.0791 at the European equities close, down from USD1.0878 late Thursday, following weak PMI data from the continent.
The eurozone's services sector was pummelled by virus-forced standstills in March. The IHS Markit services business activity index fell to a record low of 26.4 in March, below 50, meaning the sector is in decline, from 52.6 in February. The composite purchasing managers' index - compiled using services and manufacturing data from earlier in the week - fell to 29.7, below the 31.4 flash estimate and a large slump from 51.6 in February.
Germany's composite PMI slumped to 35.0 in March from 50.7 in February, while data showed France's composite PMI crashed to a historic low of 28.9, from 52.0 in February.
Analysts at Oxford Economics said: "After weeks of waiting for the inevitable collapse in economic data, we now are finally seeing the first numbers confirming the scale of the damage caused by the coronavirus outbreak across Europe. The PMIs suffered historic falls in March as countries implemented widespread lockdowns, and the losses in activity in the second quarter seem likely to be catastrophic.
"This collapse in activity is starting to be reflected in labour market statistics as well. We are seeing an unprecedented deterioration in employment figures in most countries, although the different schemes put in place to offset the impact will result in very different unemployment rates across the eurozone."
Against the yen, the dollar was trading at JPY108.55, up from JPY107.77 late Thursday.
Stocks in New York were lower at the London equities close after the government reported a massive loss in jobs last month because of the coronavirus pandemic.
The DJIA was down 1.2%, the S&P 500 index down 1.0% and the Nasdaq Composite down 0.9%.
US employment plunged by 701,000 in March, ending almost ten straight years of gains in the labor market. Market consensus had expected 100,000 jobs being lost.
In February, 275,000 jobs were added, revised from the initially reported 273,000.
Unemployment jumped almost a full percentage point to 4.4%, compared to 3.5% in the previous month. Consensus for unemployment was for a figure of 3.8%.
However, the department acknowledged its statistics could not yet capture the full extent of the damage, and its own weekly data on first-time claims for jobless benefits showed 10 million people lost their jobs in the last two weeks of the month.
The monthly report reveals the worst job loss since the depths of the global financial crisis in March 2009 and the biggest single-month jump in the jobless rate in more than 45 years.
However, the Labor Department acknowledged it "cannot precisely quantify the effects of the pandemic on the job market in March," and errors in counting those who lost jobs mean the unemployment rate was like a full point higher.
Alex Kuptsikevich, FxPro analyst told Alliance News: "On the whole, the foreign market reacted rather apathetically to the report, maintaining the trends of the last two days when the dollar regained its position. Earlier in March, the USD soared during huge market liquidation and great dollar thirst. Later, it lost about half of this growth on massive Fed liquidity injections.
"Now, it seems, a new phase in the dynamics of the markets is beginning: the markets will respond in accordance with the scale of economic losses from the coronavirus. The euro in this context looks like an outsider, and the pound is still relatively stable."
Brent oil was quoted at USD33.05 a barrel at the equities close, up sharply from USD30.02 at the close Thursday.
The North Sea benchmark hit an intraday high of USD34.86 after Organization of Petroleum Exporting Countries said it would talk to non-members - notably Russia - giving investors hope of oil production cuts.
Energy ministers from the OPEC+ oil cartel will conduct a video conference on Monday, in an effort to find a way to stabilize prices for the commodity, Azerbaijan announced on Friday.
"This meeting is being held at the invitation of the kingdom of Saudi Arabia after the talks mediated by US President Donald Trump," Azerbaijan's Energy Ministry said in a statement.
The meeting will include the members of the Vienna-based OPEC and allied oil-producing states in the OPEC+ format, such as Azerbaijan and Russia, according to the statement.
Saxo Bank's Ole Hansen said: "The market rallied into the weekend on news that an OPEC-organized meeting of producers on April 6 would discuss a 10 million barrels/day production cut. A cut of this magnitude would do little to offset the current loss in demand, estimated at between 20 and 35 million barrels/day.
"It would, however, buy the market a bit more time to recover from the pandemic before running out of storage capacity. With current volatility above 100% and the risk of renewed weakness, investors looking for a longer-term bet on rising oil prices will be better off looking at individual oil companies with strong balance sheets or exchange-traded fund's providing exposure to a basket of oil companies."
Gold was quoted at USD1,618.25 an ounce at the London equities close, up from USD1,610.10 late Thursday.
The economic events calendar on Monday has UK construction PMI data at 0930 BST. In addition, financial markets on Monday will be closed in Shanghai for Tomb Sweeping Day, but will remain open in Hong Kong.
The UK corporate calendar on Monday has the delayed release of interim results from Smiths Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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