Thursday 16 April 2020 5:21 pm

FTSE 100 stabilises after dire US jobless claims data

The FTSE 100 stabilised today despite the news that another 5.2m US workers will become unemployed, taking the total number of jobless claims in the last month to over 22m.

London’s blue chip index managed a 0.6 per cent rise, despite an earlier wobble, with traders sanguine despite the extraordinary figures.

The gains, which left the bourse at 5,628.43 points, came as a relief after the FTSE tumbled more than three per cent yesterday.

European stocks also capped their gains, with Germany’s Dax clinging on to a 0.4 per cent rise, while France’s Cac slipped into the red despite an earlier rise of 0.3 per cent.

The Euro Stoxx 600 was up 0.8 per cent just after 1pm.

Despite another week of “insane” job losses, US markets did not react as dramatically as expected, said Spreadex analyst Connor Campbell.

The Dow Jones only sank 100 points, “a manageable decrease for an increase that’s got use to 500-plus point swings”, Campbell said.

Energy stocks fall as FTSE 100 traders grow nervous

That has left the FTSE 100 only 15 points above the 5,600 mark despite gains in oil prices today.

Falling bank and energy stocks capped the FTSE’s rise. Oil giants ignored a three per cent gain for Brent crude – more nervous of a forecast nine per cent slump in demand for April.

BP and Shell both sank two per cent while struggling property fund investor M&G sank 11 per cent.

The FTSE 100 and European stocks have been rising on a tide of optimism recently that coronavirus lockdowns will ease.

But a storm of dire economic data has tested investors’ nerves in recent days.

The International Monetary Fund has said the global economy will suffer its worst year since the Great Depression of the 1930s. And think tank the Resolution Foundation today warned the UK economy faces a permanent and deep hit from a longer lockdown.

Yesterday the Office for Budget Responsibility has warned UK GDP could collapse by 35 per cent in the second quarter.

Now US jobless claims could deal another blow to the FTSE 100.

“Will investors finally take the jobs data seriously? Or will another distraction – like the Fed’s $2.3 trillion loans package, which arrived 30 minutes after last Thursday’s reading – soften the blow of the numbers?” Campbell asked.

Asian stocks were broadly lower overnight amid fears the global economy is in its worst recession since the 1930s.

Japan’s Nikkei 225 was down 1.3 per cent while Hong Kong’s Hang Seng was 0.4 per cent lower. China’s Shanghai composite was up 0.3 per cent, however.

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Stock markets pin hopes on lockdown relaxation

Sentiment among investors has been boosted somewhat today by President Donald Trump’s statement that the US will unveil guidelines about relaxing stay at home rules.

The FTSE 100 has also been boosted by some better-than-expected corporate announcements. These include airline Easyjet saying it can endure a long grounding, sending its shares up 7.4 per cent to 647.6p.

There is still a great deal of uncertainty about the virus, lockdowns, and the economic impact, however. Analysts say this means traders can expect their choppy ride to continue a while longer.

“Investors should expect continued volatile trading as markets react to the exit strategies being laid out by various countries,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

The pound was down 0.3 per cent against the dollar in morning trading at $1.249. The fall came as investors leaving equities bought up the greenback, which is seen as a safe haven.

The UK 10-year government bond was trading slightly lower. The yield, which moves inversely to the price, was up 0.5 basis points (0.005 percentage points) at 0.309 per cent.