London stocks rattled by Trump's China claim

• Trump sharpening his rhetoric against China is unnerving investors, as his team look into retaliatory measures over the coronavirus outbreak
• "The China trade war seems like an eternity ago after coronavirus has dominated market movements with such intensity over recent weeks.
• The British capital's FTSE 100 index lost 2.3 percent around midday, having already tanked the previous day by 3.5 percent on mounting evidence that COVID was slamming the global economy.

LONDON: London stocks sank further Friday after US President Donald Trump lashed out at China over the coronavirus crisis, and amid holiday closures in much of Asia and Europe.

Investors were spooked by comments from Trump indicating he could hit China with further tariffs over its handling of the COVID-19 pandemic, claiming he had seen evidence linking a Wuhan lab to the contagion.

"Trump sharpening his rhetoric against China is unnerving investors, as his team look into retaliatory measures over the coronavirus outbreak," said City Index analyst Fiona Cincotta.

"The China trade war seems like an eternity ago after coronavirus has dominated market movements with such intensity over recent weeks.

"However, threats of more tariffs from Trump have hit a nerve with the markets and is adding to the downbeat sentiment heading into the weekend," she added.

Investors in Britain took their cue from earlier losses in Tokyo and Sydney in Asia, where most bourses were also closed.

The British capital's FTSE 100 index lost 2.3 percent around midday, having already tanked the previous day by 3.5 percent on mounting evidence that COVID was slamming the global economy.

"Stocks are softer once more, though most of Europe is on holiday so the focus is on London until New York opens," noted Markets.com analyst Neil Wilson.

He added that equities had "turned broadly weaker yesterday as investors reacted to some stinky data from Europe and the US".

Sentiment was also hit after Spain said Friday that its gross domestic product (GDP) was projected to fall by 9.2 percent in 2020 as a result of the coronavirus pandemic, while the unemployment rate would reach 19 percent.

The gloomy forecast compared to two percent growth recorded last year.

However, the Spanish stock market remains shut for the long weekend.

In Asia, Japanese and Australian stocks tumbled Friday, with traders tracking a sell-off on Wall Street as another huge jump in jobless claims underlined the impact of coronavirus on the global economy.

Tokyo stocks dropped 2.84 percent, Sydney fell five percent and Wellington dropped 0.8 percent.

Wall Street had turned negative Thursday after the Labor Department said another 3.8 million US workers filed for unemployment benefits last week, taking the six-week total above 30 million.

That came as data showed the eurozone economy shrank 3.5 percent in the first quarter, following a slightly worse performance in the US with expectations that deeper contractions will come in the next three months.

The sell-off comes at the end of an otherwise bright week for equities fuelled by signs that coronavirus infections and deaths are easing around the world while governments begin easing lockdown restrictions that have strangled their economies.

Key figures around 1100 GMT

London - FTSE 100: DOWN 1.9 percent at 5,789.17 points

Tokyo - Nikkei 225: DOWN 2.8 percent at 19,619.35 (close)

Frankfurt - DAX 30: DOWN 2.2 percent at 10,861.64 (Thursday's close)

Paris - CAC 40: DOWN 2.1 percent at 4,572.18 (Thursday's close)

EURO STOXX 50: DOWN 2.6 percent at 2,917.40 (late Thursday)

Shanghai - Composite: UP 1.3 percent at 2,860.08 (close on Thursday)

Hong Kong - Hang Seng: UP 0.3 percent at 24,643.59 (close on Wednesday)

New York - Dow: DOWN 1.2 percent at 24,345.72 (Thursday's close)

Brent North Sea crude: DOWN 1.5 percent at $26.09 per barrel

West Texas Intermediate: DOWN 1.9 percent at $18.48 per barrel

Euro/dollar: UP at $1.0968 from $1.0955 at 2100 GMT

Dollar/yen: DOWN at 106.90 yen from 107.18

Pound/dollar: DOWN at $1.2558 from $1.2594

Euro/pound: UP at 87.38 pence from 86.99 pence