StockMarketWire.com - UK markets ended the Wednesday session firmly on the back foot as investors digested a warning from the International Monetary Fund (IMF) that the global economy could suffer its worst fall since the 1930s.

In its half-yearly forecasts, the IMF said gross domestic product (GDP) is expected to fall globally by 4.2% in 2020, by 6.5% in advanced countries, and by 7% in the UK. This followed predictions yesterday by the Office of Budgetary Responsibility (OBR) that UK GDP could slump 35% between April and June, if the current lockdown goes on.

At the close, the benchmark FTSE 100 index was off by more than 3.3% at 5,597.65, while the FTSE 250 fell even harder, down 4.6% at 15,347.56.

The drop mirrors Asian stock markets which have also been trading in the red. Japan's Nikkei 225 fell 0.45%, while the Hang Seng in Hong Kong dropped 1.04% and the Shanghai Composite in China decreased by 0.57%.

US markets were also weak, with all the major indexes in the red during early trade in New York, led by the S&P 500's 2.3% decline.

While in commodities, the oil rally following a truce between Russia and Saudi Arabia proved short-lived as traders fear what the IMF's forecasts will mean for demand. Oil is now back below $30 with Brent crude futures slumping 6% at $27.84 a barrel.

But gold's early weakness reversed, the safe-haven asset rallying around 3.2% to $1,715.85 per ounce.

MORE DIVIDENDS SCRAPPED

In company news, plumbing services provider Ferguson joined the lengthening list of dividend cutters, the company also calling a halt to its $500m share buyback plans to conserve cash.

Ferguson, which also said it would seek shareholder approval for an additional US listing when markets calmed, saw its share price fall 2.3% to £50.70 as investors had largely anticipated the payout axe.

Packaging company Smurfit Kappa also axed its final payout, despite volume growth.

The firm grew volumes in Europe and the Americas in the first quarter by 3% and 3.5% respectively, but cited coronavirus uncertainty for withdrawing the payout. Smurfit shares were down more than 4% at £21.62.

UDG Heathcare made it's a hat-trick of dividend cuts. The healthcare services provider saw its share price slump 5.3% to 592.5p after warning the coronavirus crisis would weigh on its second half performance, while suspending its interim dividend.

SPIRENT BUCKS PAYOUT TREND

Bucking the trend was communications technology supplier Spirent Communications after it became one of the rare companies to keep its 2019 final dividend intact, having boosted its revenue in the first quarter.

But shares in the FTSE 250 business still failed to hold on to earlier gains, the stock ending the session off nearly 2% to 224.5p despite reporting robust revenue growth and strong cash flow, lifting its net cash in the bank balance from $183m in December to $208m at the end of March.

Revenue in the three months to 31 March rose 12% with order intake showing 'good growth', Spirent Communications said, allowing it to stick with its planned $0.0345 final dividend.

Fund manager Jupiter plunged more than 8.5% to 197.1p as it reported a fall in assets under management, driven by outflows from its funds and choppy markets.

Online gambling company 888 also crashed, down 9% at 129.2p, having slashed its dividend after its annual profit more than halved.

OTHER COMPANY NEWS

Hotel and resort owner PPHE Hotel shed close on 7% at £11.60 as revenue slumped 18% in the first quarter after coronavirus lockdowns and travel restrictions lowered occupancy levels.

On the up was property portal OnTheMarket, which recovered earlier losses to rally more than 3% to 33.5p as it suspended its financial guidance for 2020 while warning of a short-term hit from the Covid-19 crisis.

Computing and power component manufacturer Solid State fell more than 5% to 426p after guiding for a full-year profit ahead of market expectations, but admitting to a mixed impact from the coronavirus crisis.

Fashion retailer Quiz swung wildly during a volatile session but closed the day firmly ahead, the shares rallying close on 12% as investors digested news that it has re-opened its online operations, though with 'standard' delivery services on offer only.

Quiz shares ended the day at 6.1p.


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