An 11% plunge in the shares of oil giant Royal Dutch Shell knocked UK's FTSE 100 lower on Thursday, after the company cut its dividend for the first time since World War Two to cope with the fallout of the coronavirus crisis.
The internationally focused FTSE 100 fell 3.5%, with the energy sector proving the biggest drag, taking 65 points off the index.
Shares in rival BP, which said it was maintaining its dividend earlier this week, fell 6%. Shell also suspended share buybacks and said it would reduce output by about a quarter, hit by a slump in oil demand due to tight lockdown measures.
Markets across the globe took a breather on Thursday after a recent run of gains that helped the FTSE 100 post its biggest monthly gain since April 2018 with a 4% rise.
The FTSE midcap index, down 2.3% on the day, still recorded its biggest monthly gain since 2010.
Lloyds Banking Group fell 7.3% as its first quarter pretax profit was wiped out by provisions against expected bad loans due to the pandemic.
Miner and trader Glencore dropped 5% after it cut its 2020 capital expenditure and output targets to reflect the impact of the coronavirus on its operations.
Supermarket group Sainsbury's also fell 5% after it warned of a hit from coronavirus-related costs and said it would defer dividend payment decisions until later in the year.
Among the gainers, Reckitt Benckiser rose 3.6% after it forecast performance in 2020 to be better than initially thought and posted a record sales growth in the first quarter due to panic buying ahead of lockdown.
Drugmaker AstraZeneca gained 1.4% after saying that it would team up with the University of Oxford to help develop, produce and distribute a potential COVID-19 vaccine.
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