Global shares fall as optimism fades on coronavirus lockdown easing – as it happened

After initial gains, European stock markets headed lower today amid fears over a second wave of coronavirus infections in some countries that have relaxed their lockdowns, such as South Korea, China, Germany and Lebanon.

In London, airline and energy stocks have been worst hit, with easyJet the biggest faller, after the UK government announced a new measure to quarantine passengers arriving from abroad by air. Meanwhile, Halfords shares and sales have surged during the lockdown, with Boris Johnson urging people to walk or cycle instead of using public transport.

• UK’s FTSE 100 index down 0.16% at 5,924
• Germany’s Dax down 0.92% at 10,803
• France’s CAC down 1.35% at 4,488
• Italy’s FTSE MiB down 0.2% at 17,404

Wall Street is also down.

• Dow Jones down 0.82% at 24,131
• Nasdq down 0.05% at 9,116
• S&P 500 down 0.63% at 2,911

Oil prices have tumbled, with Brent crude now down 0.77% at $30.73 a barrel.

Good-bye and thank you for all your comments. We’ll be back tomorrow.

The Bank of England’s chief economist Andy Haldane said there is a risk that the coronavirus pandemic will cause a long-term hit to spending by businesses struggling with higher debts, and households worried about their job security.

He said on a Royal Economic Society webcast:

All crises leave scars and this crisis assuredly will be no exception.

Last week, the central bank said Britain’s economy could shrink by 14% this year, which would be the worst slump since the early 1700s, due to the government’s coronavirus shutdown, before bouncing back with 15% growth in 2021. The Bank warned that it could be even worse.

On a brighter note, Haldane said he had seen signs of stabilisation in some spending measures recently, although they remained at very low levels. He added:

Apparently Spotify downloads of the REM song “It’s the end of the world as we know it” peaked two weeks after the lockdown began and have been declining since. So perhaps, perhaps, we are seeing some stabilisation.

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On Wall Street, the Dow Jones fell more than 200 points at the open, or 0.87%, while the S&P 500 lost more than 20 points, or 0.8% and the Nasdaq opened 60 points lower, or 0.65%.

In other news, a home coronavirus antibody test developed by the UK biotech Mologic is expected to be mass produced from June. It will allow people to test themselves at home using a drop of blood, within just 10 minutes.

The home testing kit will be manufactured by BioSure (which created the first self-test for HIV). Mologic is seeking fast-track approval from UK regulators, including the Medicines and Healthcare Products Regulatory Agency (MHRA). Approval by the MHRA would mean that the test can be procured for the NHS.

The test checks for antibodies in the blood to determine whether that person has previously had Covid-19, rather than whether they have it at the moment. It is still unclear whether someone who has had the virus in the past can be reinfected.

Mologic, based in Bedford, received a £1m grant from the UK government to develop the test.

Unite, Britain’s largest union, is calling for a full public inquiry into why low-paid workers appear to be most at risk of dying from Covid-19, after new figures were released by the Office for National Statistics.

The highest number of deaths (131) were recorded in the social care sector with a total of 131 deaths recorded, followed by taxi drivers (77). The ONS also found that 30 bus drivers died of Covid-19, 29 lorry drivers and 33 van drivers.

Male workers had a notably increased mortality rates in a number of professions such as security guards, of whom 64 workers had died. Chefs also had a very high rate of death, with 37 having died of coronavirus.

Unite assistant general secretary Diana Holland said:

These figures are alarming and it is imperative that we learn all the lessons possible now and when this pandemic is over that there is a full public inquiry into these deaths.

We must never forget this is not about statistics, but each and every death is an individual tragedy where a loved one has died.

While lessons need to be learned for the future, it is immediately imperative that all workplaces examine these figures and urgently revisit how more effective measures can be taken to protect workers who have remained in work or who are returning to the workplace. Thorough risk assessments are vital and government needs to make sure they happen.

This is only an early snapshot of this dreadful disease but it is clear that lower paid workers often from a BAME background have been at the greatest risk of dying during the pandemic.

After gains in early trading, European shares are heading lower again as optimism on the latest easing of coronavirus lockdowns in several countries faded, and gave way to fears over a second wave of infections.

• UK’s FTSE 100 index down some 33 points, or 0.55%, at 5,903
• Germany’s Dax down 1.2% at 10,770
• France’s CAC down 1.78% at 4,468
• Italy’s FTSE MiB down 0.54% at 17,344

Travel and energy stocks are among the biggest fallers. Wall Street is expected to open lower after Friday’s rally, with the S&P 500 futures falling nearly 1%.

Guy Miller, chief market strategist at Zurich Insurance Company, told Thomson Reuters:

If we do have a second wave and lockdowns, that’s almost the worst outcome from an economic perspective.

He said that would “postpone business investment indefinitely” and keep consumer spending weak.

Burger King UK will reopen more than two thirds of its restaurants by the end of June, reports my colleague Rebecca Smithers.

The fast food chain intends to reopen a further 35 restaurants from today, and 72 restaurants from 18 May, across England, Wales and Scotland, as part of its continued phased reopening plan. It started reopening outlets in mid-April.

In just over a month, the fast food chain will have reopened 350 locations for delivery and drive thru -- 68% of the restaurants it has in the UK.

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Oil prices are heading lower amid fears of a fresh wave of coronavirus infections in some countries -- China, South Korea and German. Traders worry that this could lead to restrictions being introduced, which would translate into lower demand for oil.

Brent crude, the global benchmark, has lost 89 cents to $30.08 a barrel, a fall of 2.87%, while US crude fell 65 cents, or 2.6%, to $24.09.

UBS analyst Giovanni Staunovo says:

Concern over a second wave, the nearly 50% year-on-year drop in Indian oil demand in April and likely further oil inventory builds this week are likely weighing on oil prices at the start of the week.

Only 374 oil rigs are now operating in America, the lowest number since 1940, Thomson Reuters reported, citing data from energy services company Baker Hughes. By another count, the number fell below 300.

The commute in London is going to be very different in coming weeks as people return to work, according to Transport for London. It said the number of pepole travelling on its network will cut by at least 85%, as it unveiled a series of new measures. On Sunday night, Boris Johnson urged construction and manufacturing workers to return to work, along with people who cannot work from home.

TfL stressed that Londoners must continue working from home wherever possible to limit numbers on public transport; people should walk or cycle and shop local. It urged employers to help their staff avoid travelling at the busiest times of day. Passengers should cover their faces, carry a hand sanitiser and wash their hands before and after travelling.

Hand sanitiser points will be installed over the coming weeks at every tube, bus and rail station. TfL has already introduced more frequent deep cleaning of its transport network using hospital-grade cleaning substances that kill viruses.

Passengers should maintain a 2m distance “wherever possible”. This means that TfL will only be able to carry 13% to 15% of the normal number of passengers on the tube and buses. It will put up new social-distancing posters at bus stops, stations and in shelters, and create two-metre floor markings on platforms at stations.

The London mayor, Sadiq Khan, said all TfL frontline staff will be offered basic face masks from today.

I urge all Londoners to rethink the way they travel. Please avoid peak times, wear a non-medical covering over your nose and mouth and carry a hand sanitiser. By rapidly rolling out more space for walking and cycling through our London Streetspace plan we are enabling many more journeys to be made through these sustainable means which is crucial to our city’s recovery.

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TheCityUK, a lobby group for the financial services sector, has written to the Bank of England governor, Andrew Bailey, to warn that UK businesses are racking up an “unsustainable” debt mountain of £90bn to £105bn because of the Covid-19 pandemic.

Loans issued under the coronavirus business interruption loan scheme (CBILS) could contribute £10bn to £20bn. To address the debt pile, firms will need to issue new equity and/or restructure their borrowings, TheCityUK says.

The group says:

If left unresolved, these levels of unsustainable debt could inhibit employment, research and development, investment and ultimately a smooth economic recovery back to growth.

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Here is some reaction to the 28% slump in Italian industrial production, reported earlier. It was worse than expected and means that the fall in first-quarter GDP could be bigger than initially estimated. Nicola Nobile, economist at Oxford Economics, says:

The Italian industry recorded a historically weak March, with output dropping by 28% over the month. The decline was common across all sectors, but the 50% drop in transport equipment was just astonishing. In April, we expect a similar collapse in industrial activity, with the level at half of that of 2019.

Moreover, after today’s number we do not rule out a downward revision to Q1 GDP, which was reported at -4.7% q/q in the flash estimate two weeks ago.

Walsh said the airline group will have to review its plans to restart a significant number of flights in July if travellers are quarantined upon arrival in the UK, my colleague Jasper Jolly reports.

Last week, IAG said British Airways and its other airlines, Aer Lingus, Iberia and Vueling, planned to run about 1,000 flights a day between July and September, a significant increase from April and May.

Walsh told the transport committee:

There’s nothing positive in anything I heard the prime minister say yesterday. We had been planning to resume on a pretty significant basis of flying in July. I think we’ll have to review that based on what the prime minister said yesterday.

Walsh has questioned why the UK plans to impose a lengthy quarantine period for travellers arriving by air.

The introduction of a 14-day quarantine period for air travel is a surprise because it appears that the government is not going to apply a quarantine period for people who come into the UK by other means of transport.

I don’t understand that but maybe the prime minister will be able to clarify the science behind that. It seems strange to me.

But we will have to review the impact of that and make an assessment in terms of the capacity that we’re likely to operate if a quarantine period applies. At this stage, I would imagine that our capacity into and out of the UK would be pretty minimal in that event.

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