British stocks nudged higher on Thursday, with data both from the U.K. and abroad showing the deterioration of the global economy due to the coronavirus shutdowns.
In the U.K., the flash services purchasing managers’ index plunged to a survey-low 12.3 in April from 34.5 in March, on a scale where any reading below 50 indicates deteriorating conditions. Incredibly, the French services PMI reading of 10.4 was even worse.
“The problem with the PMIs though in a situation like the one we are currently experiencing, however, is that they only report the balance of firms saying whether activity is higher or lower,” said Cathal Kennedy, European economist at RBC Europe. “What they don’t tell us is by how much activity has increased or decreased. And in this current episode, a large number of firms will be experiencing a total halt in activity, which the PMIs can’t account for and is why the fall in Q2 GDP will be much larger than they are pointing to.”
In the U.S., 4.4 million filed for first-time unemployment benefits.
The FTSE 100 UK:UKX+1.02% meanwhile, inched up 0.1%, and many of the more defensive companies, like supermarket delivery firm Ocado UK:OCDO-2.34% and supermarket chain J Sainsbury UK:SBRY-2.66% lost ground.
Unilever UK:ULVR-1.18% fell 2% as the Anglo-Dutch household products giant reported flat underlying sales growth for the first quarter, with a big drop in emerging markets.
Taylor Wimpey UK:TW+11.03% surged 11% as the home builder said its order book has grown and that it will return to construction on May 4. It said recent cancellations represented just 0.8% of its order book, with new sales exceeding cancellations.
