Optimism in global markets gave way to gloom yesterday as the painful impact of the coronavirus became clearer.
As pubs in Britain were told they will not be allowed to open this month, bleak data from the eurozone and another dire warning for airlines gave traders the jitters.
The turmoil sent London’s FTSE 100 index 2.1 per cent, or 136.87 points, lower to 6335.72, while the Dow Jones industrial average in New York also slid on the opening.
As pubs in Britain were told they will not be allowed to open this month, bleak data from the eurozone and another dire warning for airlines gave traders the jitters
The Dax, Germany’s blue-chip index, finished 1.6 per cent or 201.6 points, lower at 12,618.
The change of mood came as cheer following decent US jobs figures last week was replaced by fresh concerns over the outlook.
A separate report this week showed the US economy ended its longest expansion in history in February as it crashed into recession.
A warning from the French central bank that the country will take two years to recover from the pandemic also hit sentiment.
Stock Watch – Avacta
Biotech firm Avacta was boosted after it revealed it has developed a prototype of its new Covid-19 test.
The test, which it is developing with US-based partner Adeptrix, will use samples taken from throat swabs and mass spectrometry to detect the virus rapidly in a lab.
It said it would now launch a programme to ‘evaluate and optimise’ the kit at sites in the UK and US before seeking to get it validated by clinical authorities. Shares rose 3.5 per cent, or 5p, to 139p.
Separate data showed that Germany recorded its worst month for trade ever in April, with exports dropping 24 per cent.
In the case of pubs, chains that rose on Monday, when it was reported the Government was seeking a June 22 reopening, reversed.
Downing Street said July 4 was still the target, after industry figures warned many watering holes would not be ready in time for the earlier proposal.
Brewery and pubs owner Marston’s was down by 3.1 per cent, or 2.3p, to 73.05p, while rival JD Wetherspoon sunk 4.2 per cent, or 49p, to 1125p and Mitchells & Butlers 4.2 per cent, or 9.5p to 217.5p.
There was little for airlines to celebrate either, after the International Air Transport Association predicted the crisis will push the industry into record annual losses of £66.5billion. The trade body said 2020 would go down as the ‘worst year in the history of aviation’.
Emirates was reportedly planning to axe up to 7,000 jobs, while Hong Kong-based Cathay Pacific was given a £4billion state bailout by authorities in the territory.
Following the news, British Airways owner IAG saw shares fall 6.2 per cent, or 20.4p, to 311.2p, while Easyjet dropped 3 per cent, or 26p, to 854.2p.
Jet2 owner Dart Group shed 4.6 per cent, or 44.5p, to close at 932.5p, while Stobart Group, which owns London’s Southend and other regional airports, fell 8 per cent, or 3.75p, to 43.25p.
Builders also took a tumble after Bellway posted a downbeat update, saying it expected sales to continue to suffer while lockdown remained in place.
Persimmon fell 4.6pc, or 117p to 2405p, while Barratt dropped by 5.9 per cent, or 34p, to 545.2p, Taylor Wimpey by 4.5 per cent, or 7.45p, to 159p and Bovis Homes owner Vistry Group by 5.9 per cent, or 51.5p, to 827.5p.
Not everyone had a bad day though. British tech firm Aveva made gains after posting a rise in annual profits and holding its dividend despite the virus turmoil.
The firm, which makes software used to design oil rigs, ships and nuclear power plants, said revenues rose from £766.6million to £833.8million in the year to March 31, while profits rose from £46.7million to £92million.
It also held its final dividend at 29p, taking its total proposed payout for the 2019/20 year to 44.5p.
It climbed 4.1 per cent, or 164p, to 4183p after the announcement.
And laboratory equipment maker Oxford Instruments was on the rise. Revenues rose from £314million to £317.4million in the year to March 31, while profits were up from £34.3million to £38.8million.
That lifted it 3.3 per cent, or 42p, to 1300p. But it delayed a decision on dividend.
Drugs giant Astrazeneca, the UK’s most valuable company, also edged up 0.5 per cent, or 44p, to 8244p after it received £18.6million in US government funding to develop a treatment for Covid-19.
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