Markets wait nervously for data on China’s economic slump

Stock markets were quiet on Thursday as investors waited nervously for the latest grim set of US economic data and prepared themselves for Friday’s Chinese GDP figures.

The mid-afternoon numbers from the US showed 22 million Americans had signed up for unemployment benefits since the US lockdown was implemented – an unprecedented number but within market expectations.

The FTSE 100 closed the day up 30.78 points, or 0.55%, at 5,628.43, spending the day barely moving.

The jobs numbers from the US failed to make much impact and the UK Government’s announcement on extending the country’s lockdown by three weeks came after hours.

But analyst Connor Campbell, at SpreadEx, said: “Another reason for the fairly nervy trading may be the fact that overnight, arguably the most important economic reading of the pandemic so far will be released: China’s Q1 GDP.

“A contraction of anywhere between 10% and 11% is forecast; a huge fall from Q4’s 6.0% growth, and the first time the Chinese economy has shrunk since 1989.

“It’ll also give the Western nations – which are starting from a far worse base level of GDP – what they can maybe expect in Q2.”

The pound fell 0.8% against the dollar at 1.242 dollars and against the euro it was down by 0.17% at 1.146 euros.

Oil also stabilised after heavy falls on Wednesday, with a barrel of Brent crude down 0.14 dollars at 27.55 dollars.

In company news, oil majors BP and Royal Dutch Shell both saw shares drop again, as the low oil prices keep hitting the sector. BP was down 7.75p at 291.95p and Shell’s “A” shares were down 47.8p at 1,298.2p.

EasyJet updated the stock market on its future, predicting a smaller loss for the first half of the year, of between £185 million and £205 million, compared with previous forecasts of £275 million.

But the messaging was overshadowed by founder and largest shareholder Sir Stelios Haji-Ioannou calling for the head of the chief executive and chairman over their decision to continue with Airbus orders. Shares closed down 14.8p at 588.4p.

St Tropez and Imperial Leather maker PZ Cussons said its beauty business has been “severely” affected by the coronavirus crisis, with demand for fake tanning products slumping amid social distancing measures. The news sent shares down 3.6p at 176.2p.

Pest control and hygiene business Rentokil Initial warned it expects the hit from coronavirus to worsen in its second quarter amid global lockdowns due to the pandemic.

Despite being labelled “essential” by governments worldwide, sales have been hit as offices shut down and no longer require services. But investors were pleased to hear bosses expect a rosy future, with shares closing up 17.1p at 409.6p.

Events company Informa said it would be tapping up investors for up to £1 billion to help pay down debts and strengthen its finances, as the lockdown hits the entire exhibitions sector.

The company said the impact of the coronavirus pandemic had been “significantly deeper, more volatile and wide-reaching” than was initially expected but investors appeared keen at the fundraiser, with shares up 20.6p at 437.4p.

The biggest risers on the FTSE 100 were Evraz up 17.9p at 250.6p; Barratt Developments up 27.5p at 460.8p; Auto Trader up 22.5p at 425.4p; GSK up 83.8p at 1,653.8p; and Informa up 20.6p at 437.4p.

The biggest fallers were M&G down 17.6p at 128.4p; Pearson down 26.7p at 479.1p; St James’s Place down 41.4p at 749.2p; JD Sports down 21.6p at 490p; and Next down 180p at 4,277p.