Stocks jump as US drugmaker Gilead raises hopes of Covid-19 treatment - as it happened
Rolling coverage of the latest economic and financial news, as investors hope that a drug developed by American firm Gilead Sciences could treat Covid-19
3.21pm BST
Europe woke up to news that China's economy shrunk for the first time on record following the coronavirus outbreak. Data showed Chinese GDP contracted by -6.8% in the first quarter of 2020
There's now a growing expectation that China will cut its benchmark lending rate as early as Monday, following the 6.8% contraction in first quarter growth
3.12pm BST
Bank of England governor Andrew Bailey has held a virtual press conference with journalists today, where he called on UK banks to pick up the pace in getting state-backed loans to companies struggling through the coronavirus crisis.
Reuters reports that Bailey said banks had to address the "serious strain" on their capacity to deal with a surge in demand for loans, and suggested risk assessments were too slow.
Notwithstanding the stress that we're all operating under in terms of the current working environment, they have got to put their backs into it and get on with it, frankly.
3.01pm BST
Commenting on the decision to extend the furlough scheme, Chancellor Rishi Sunak said:
With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.
It is vital for people's livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery.
2.56pm BST
The Treasury has announced the extension of the UK's job furlough scheme, which will now run an extra month until the end of June to "reflect continuing social distancing measures"
The scheme, which allows firms to keep employees on the payroll with the government paying cash grants covering 80% of their wages up to 2,500, was originally set for a three month period between March and the end of May.
2.36pm BST
Shares in Gilead Sciences are also pushing ahead, rising 10% or nearly $8 to $84.88 each.
2.35pm BST
Wall Street is open for trading. Here's how major indexes are looking at the open:
2.17pm BST
NEWSFLASH: The competition watchdog has provisionally cleared Amazon's investment in food delivery company Deliveroo, which said its business would be at risk of collapse without the US retail giant's financial support.
Amazon was the lead investor in a $575m (442m) funding round, last year, which reportedly gave it a 16% stake in Deliveroo.
We've provisionally cleared Amazon's investment in Deliveroo as part of an in-depth investigation.
Read more about why: https://t.co/M5wLum7pJR pic.twitter.com/bAJQowHPLQ
Deliveroo recently informed the CMA that the impact of the coronavirus pandemic on its business meant that it would fail financially and exit the market without the Amazon investment. Deliveroo's submission was supported by evidence from the company's financial advisers.
1.53pm BST
More details about the Gilead Sciences trial that is boosting stock markets, from my colleague Rob Davies.
Optimism surrounding a potential new treatment for Covid-19 has boosted the FTSE100 stock index, amid claims that a drug called remdesivir has spurred rapid recovery in 113 patients.
But certainly when we start [the] drug, we see fever curves falling.
We have seen people come off ventilators a day after starting therapy. So, in that realm, overall our patients have done very well.
Related: FTSE 100 boosted by optimism over potential coronavirus drug
1.10pm BST
NEWSFLASH (at least for the economic obsessives among us): The Office for National Statistics has said it will delay the release of GDP and retail sales data during the Covid-19 outbreak.
The May release of GDP data will be delayed by one day, the June data by two days, according to Reuters.
12.47pm BST
European stocks have extended their gains amid optimism over the Gilead Sciences trials.
The FTSE 100, which started the day up around 2.5% is now trading higher by around 3.5%
12.19pm BST
The US drug company said to be developing a medicine that could help battle the coronavirus outbreak is set to open higher this afternoon.
Gilead Sciences is up 12.5% in pre-market trading at around $86.38 per share, after reports suggested that its investigational drug remdesivir may be effective against Covid-19.
The report that set off the gains said that early data on Gilead's coronavirus medicine Remdesivir is 'very encouraging'. The early data referred to is a clinical trial of 125 patients at the University of Chicago with coronavirus who were all given Remdesivir and have nearly all survived with a speedy recovery within a week.
If we're playing devil's advocate to the bullish reaction - an important word here 'is 'early'. It was a small trial and there was no control group so there's plenty of room for error.
11.45am BST
ITN, the producer of news for ITV, Channel 4 and Channel 5, has furloughed staff, frozen senior manager and cut salaries for top bosses by 20% to manage costs during the coronavirus lockdown.
Plans to furlough a "small number" of staff will mainly impact the sport and commercial production departments, while some staff have been asked to work part-time.
These talented and hardworking teams have been hardest hit simply because of the economic downturn in the sectors in which they work.
11.15am BST
The appointment of BlackRock, the world's largest investor, to carry out a study on potential new environmental rules for banks by the European Commission, faces scrutiny from members of the European Parliament.
Three MEPs have written to the commission asking it how it intends to avoid a conflict of interest, given that BlackRock holds huge stakes in both fossil fuel companies and the banks.
Choosing @blackrock for a study about Green finance feels worrying. Blackrock is still a huge shareholder for the fossil industry. Financing fossil fuels & writing a Green finance study doesn't fit together. We want an explanation from the @EU_Commission pic.twitter.com/yXRZLBvJxS
11.03am BST
China's economy will do well to grow at all in 2020.
That's the stark warning from Yue Su, an economist focusing on China at The Economist Intelligence Unit.
The GDP contraction in January-March will translate into permanent income losses, reflected in bankruptcies across small companies and job losses.
In addition, the international spread of the pandemic will push the country's major trading partners into recession, leading to a slump in exports in the second quarter and knock-on impacts on domestic investment and employment.
10.35am BST
The stock market rally is set to continue stateside, with futures pointing to gains on Wall Street:
10.32am BST
There's a growing expectation that China will cut its benchmark lending rate as early as Monday, following the 6.8% contraction in first quarter growth.
A Reuters survey shows that all 52 traders and analysts polled are expecting a cut to China's Loan Prime Rate on Monday in order to reduce financing costs for companies that are struggling to get back on their feet after the pandemic.
Judging from high frequency economic data and progress of work resumption in April, we believe the central bank will continue its easing stance for the time being despite some signs of loose liquidity in the banking system.
10.12am BST
Estate agency chain Foxtons has announced plans to raise 22m through the creation of new shares to shore up its finances while the coronavirus crisis continues.
10.07am BST
DATA FLASH: Eurozone inflation slowed in March to 0.7% year-on-year, confirming earlier estimates.
That compares to a 1.2% rise in February, and the European Central Bank's target of below but close to 2%.
9.54am BST
Time to catch up on Europe's car market and the news isn't pretty.
Passenger car sales across the 27 EU states plunged 55.1% in March to to 567,308 vehicles, after the vast majority of European dealerships shuttered in the second half of the month as the coronavirus spread across the continent.
9.24am BST
The European stock rally is holding firm.
Even on the FTSE 100 just six stocks are trading in negative territory, and the worst decline is no more than 2%.
9.03am BST
China's economic trajectory post-Covid-19 is being watched closely, with some hoping it can serve as a example of what to expect in the months ahead.
Investors are focused on the pace at which economic activity will return to normal given China's prominence in the global economy; it is the world's largest trading partner. China's recovery is also being closely watched given its potential to serve as a template for growth paths elsewhere.
However, there are several reasons to be wary of drawing parallels. First, China's covid-19 outbreak and in turn activity restrictions were largely confined to Wuhan. By contrast, mitigation measures in key advanced economies have been country-wide.
8.41am BST
China has reported more than 3,000 deaths and 80,000 infections from the coronavirus. Even as Chinese authorities over the past month have pushed to restart the economy, fears of new infections have forced some parts of the country to enact new restrictions. China has closed its borders to almost all foreigners arriving from abroad and limited international flights.
Depressed demand from overseas is likely to hit the Chinese economy further. China's first quarter contraction follows declines in 2019, which saw the Chinese economy expand at its slowest pace in almost 30 years, the result of slowing consumption, a pull back on debt-fuelled growth, and a protracted trade war with the US.
Related: China economy shrinks for first time as Wuhan Covid-19 death toll is increased by 1,300
8.27am BST
But not every market is on the rise, with US crude futures falling to their lowest level since 2002 at $18.87.
While some economies like Germany and Spain are testing the waters in sending citizens back to school or work, there seems to be some pessimism about how long the road will be for the US economy as a whole (as well as how effective the Opec+ production cut deal will be in the interim). And with over 22 million US residents now jobless, there are fears over the trajectory for US domestic demand.
Oil markets found baseline support from President Trump's US reopening plan. But with NYMEX crude prices closing ominously below the psychological WTI $20 per barrel for the second day running; it's suggesting downside risk remains the dominant factor.
If oil producers fail to address the medium-term structural oversupply situation adequately, oil prices could stay volatile, with risks skewed to the downside for the next few months.
8.04am BST
Here we go: Germany's DAX opens higher by +2.9%
8.01am BST
And we're off! European indexes are trading higher across the board.
We're still waiting for a print from the German DAX, but here's how we're looking so far:
7.51am BST
Get ready for a rally at the market open:
European Opening Calls:#FTSE 5810 +3.22%#DAX 10664 +3.52%#CAC 4494 +3.30%#AEX 514 +3.64%#MIB 17288 +3.10%#IBEX 6997 +3.45%#OMX 1534 +3.36%#STOXX 2915 +3.64%#IGOpeningCall
7.47am BST
Europe has woken up to news that China's economy shrunk for the first time on record following the coronavirus outbreak.
#China GDP declined 6.8% YoY in Q1 2020. In seasonally adj. QoQ terms GDP declined 9.8%, equivalent to -34% in annualized terms. There are reasons to think that slump was deeper than officials claim, CE says: Almost all main econ indicators contracted at double-digit pace in Q1. pic.twitter.com/yqlQ9SmkJw
Now, of course, if we compare this number with the expectation of over 30% slump in developed economies following a similar shutdown and confinement period, it is possible that there may have been some adjustment on data, and the data doesn't reflect the real extent of the economic calamity -
Other data showed that the slump in Chinese retail sales didn't improve as much as expected in March, down from -20.5% to -15.8% versus -10% penciled; the fixed asset investment fell 16.1% y-o-y against -15.0% forecasted by analysts and -24.5% printed a month earlier.
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