Oil majors pull FTSE 100 up; coronavirus fears persist

Surging oil prices lifted UK's commodity-heavy FTSE 100 on Thursday, although the mood was fragile as Britain saw a record surge in deaths from the coronavirus pandemic that threatens to plunge the world economy into a deep recession. Energy majors BP and Royal Dutch Shell gained 6% and 9%, respectively, as oil prices rallied on hopes of Saudi Arabia and Russia reaching a truce to end their oil price war.

IAG-owned British Airways rose 2.9% after a source told Reuters the company was in talks with its union about a plan to suspend around 32,000 staff in response to the outbreak. The FTSE 100 gained 0.8% after a volatile start.

Despite recovering more than 12% from mid-March lows due to massive fiscal and monetary support, the blue-chip index remains 28% below its January peak amid growing evidence of the damage that the outbreak is wreaking on global growth. After Wednesday's data showed factory activity had contracted sharply in most parts of the world in March, investors are waiting for U.S. weekly jobless claims on Thursday to see how bad the world's largest economy has been hit.

"Until we get a better sense of where things stand with the United States, global markets won't have much upside," said Peter Dixon at Commerzbank. "We're a long way from being confident that we're reaching any corner." Mortgage lender Nationwide said Britain's housing market is grinding to a halt after the government's shutdown of much of the economy. Through March 31, fatalities rose by 563 to a total of 2,352 in the country.

Gains on FTSE 100 were also limited by falls in shares of Standard Life Aberdeen, Phoenix Group Holdings and Smith & Nephew as they traded ex-dividend. Cruise operator Carnival Corp dropped 6.2% to the bottom of the index, as it raised $6.25 billion by issuing new debt and equity, borrowing at a high cost to weather the economic storm from the pandemic.

The domestically-focused midcaps fell 0.2%, with food producer Bakkavor Group sliding 8.7% after it revealed that the outbreak led to a cut in orders and suspended dividends. Recruiter Hays slid 8% after it announced an emergency 200 million pound issue of shares as it sought to prop up its finances.

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