The FTSE 100 plunged 3.75% to 5,096 in early morning trade despite Chancellor Rishi Sunak pledging £350bn, equivalent of 15% of the UK’s GDP, in support for businesses.

Companies across the UK are facing an unprecedented crisis as people stay at home and spend only on essentials due to the coronavirus outbreak, with the sharp drop in economic activity putting a wide of range of jobs and businesses at risk.

The chancellor said he will do ‘whatever it takes’ to contain the economic impact of the virus outbreak.

But AJ Bell chief investment officer Kevin Doran warned it ‘just isn’t enough’.

He said, ‘Overall it’s a powerful package of cash flow measures that amount to assistance somewhere in the region of 15% of GDP, but what’s missing is any real help to fill in the production chasm that is coming our way over the next few months.’

Asian stock markets also fell as the stimulus measures, including $1tn of economic support from the US government, failed to allay fears regarding the global economy.

The Hang Seng in Hong Kong fell 4.2%, Japan’s Nikkei 225 dropped 17% and China’s Shanghai Composite was down 1.8%.

In commodities, brent crude remains below $30 a barrel, rubbing salt in the wounds particularly for the struggling airlines who already hedged most of their fuel requirements at much higher prices.

Gold, the safe haven most people thought would climb higher than it has, is down 1.3% in US dollar terms to $1,505 per ounce.

MORRISONS IN RARE BIT OF GOOD NEWS

In company news, supermarket Morrisons (MRW) jumped 5.4% to 190p after it reported that in the past six weeks like-for-like sales jumped 5%.

In its results for the 52 weeks to 2 February, Morrison’s reported a dip in like-for-like sales and revenue. However, free cash flow rose and statutory pre-tax profit jumped 43.6% to £435m.

And in a rare bit of good news, it is also planning to create 3,500 new jobs to keep up with demand for its home delivery service. In addition, it’s guaranteeing pay for its staff in these uncertain times, and immediately paying small suppliers.

SAINSBURYS AND TESCO JUMP ON CHANCELLOR STATEMENT

Rival supermarket Sainsbury’s (SBRY) soared 7% to 206p as it put out a statement noting the Chancellor’s words that the government will be ‘giving all retail, hospitality and leisure businesses in England a 100% business rates holiday for the next 12 months’.

Sainsbury’s pointed out it paid business rates of £567m in the financial year to 9 March 2019, of which around £500m related to its stores.

Tesco (TSCO) shares were also up, increasing 1.6% to 230p, as it also welcomed the government’s move.

Software company Micro Focus International (MCRO) sank 10.6% to 360 on announcing that it was no longer recommending a final dividend for its 2019 financial year as it monitors the cost of the coronavirus outbreak.

PUB OWNERS DOWN ON VIRUS WARNINGS

Pub owner Marston's (MARS) lost 7.9% to 20.45p, having warned on profits and stating that it may not pay an interim dividend.

The gloomy guidance from Marston's came after the UK government urged people to avoid pubs and other hospitality venues to curb the spread of the coronavirus.

Marston's also said it was in talks with its lenders about potential covenant waivers.

Rival pub and restaurant group Mitchells & Butlers (MAB) dropped 12% to 124.2p, claiming it was bracing for a 'significant downturn' in sales.

OTHER COMPANY NEWS

Iron ore pellet producer Ferrexpo (FXPO) reversed 2.0% to 120.4p, despite reporting a rise in profit, supported by rising sales at higher prices.

Consumer goods group PZ Cussons (PZC) shed 1.7% to 170p, even as it agreed to sell Nigerian dairy business Nutricima to an affiliate of Holland's Royal FrieslandCampina, for an undisclosed sum.

Auto retailer Pendragon (PDG) skidded 29% lower to 4.3p as it reported a deeper annual loss and scrapped its final dividend, though it said its performance had improved in the second half after it shuttered poorly performing stores.

Pendragon said it was closely monitoring the impact of the coronavirus on the UK economy.

Convenience food producer Greencore (GNC) dropped 6.2% to 93.82p, despite stating thatit continued to trade 'broadly in line' with expectations, even as the spread of the Covid-19 virus gathers pace.

Wagamama and Frankie & Benny's owner Restaurant Group (RTN) gained 5.3% to 26.85p despite warning on profits amid a precipitous drop in sales.

Restaurant Group said it was discussing convenant 'holiday's' with its lenders, but still forecast a positive operating earnings results for the full year.

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Issue Date: 18 Mar 2020