Shell Shock Pushes London Markets Back Into The Red

Worsening economic gloom has pushed stock markets back into the red as Shell slashed dividends and British Airways threatened to close operations at London Gatwick.

The move follows British Airways announcing 12,000 redundancies earlier in the week.

Shell was forced to lop 66% off first quarter dividends for the first time since 1945 to 16 cents a share after earnings collapsed by 46% in the first quarter.

Meanwhile, fashion chains Oasis and Warehouse will not open their 92 stores or 437 concessions with other retailers after the coronavirus lockdown, with a loss of 1,800 jobs. The firms went into administration last week.

Hundreds more small businesses have voiced their concerns about the time cash help from the government is taking to reach them with just over 24,000 loans approved from 53,000 applications to the Coronavirus Business Interruption Loan Scheme (CBILS).

Oil bounces back

The news put traders into reverse after the FTSE 100 regained more than a month’s lost ground to punch through the 6000-point ceiling yesterday.

Today, the market closed 3.5% down at 5901.21, with the FTSE 259 also struggling and losing 2.26% to end the day at 16454.46.

The Pound had a better day, mainly because economic news elsewhere was just as bad as in London.

Sterling was 0.99% up against the US Dollar to $1.2594 and rallied 0.33% against the euro to €1.1502 and 1.47% against the Japanese yen to ¥107.1365.

Oil also gained a lot of lost ground, with a barrel of Brent crude bouncing back 12.64% to $25.39, while West Texas Intermediate barnstormed 22.51% to $18.45 a barrel.

US and Europe markets see red

Gold stood still again, maintaining $1706.00 an ounce.

In the US, the Dow Jones sunk 1.44% to 24280.18, the NASDAQ dropped 0.66% to 8856.27 and the S&P 500 lost 1.32% to 2900.65.

Markets in Europe were all in the red.

The CAC 40 in Paris ended down 2.12% at 4572.18, the DAX in Frankfurt lost 2.22% to 10861.64, the pan-European Euro Stoxx fell 2.27% to 2927.93 and the IBEX in Madrid slipped 1.89% to 6922.30.

Overnight, Asian markets fared better, with the Hang Send in Hong Kong closing 0.28% up at 24643.59 and the Nikkei in Tokyo rising 2.14% to 20193.69.

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