UK stocks underperform Europe as virus woes persist

UK equities sat out a global stock market surge on Tuesday, as declines in oil majors and British American Tobacco added to gloom following signs that Britain will remain under lockdown for a longer period.

The blue-chip FTSE 100 index ended 0.9% lower as the UK government signalled there would be no easing of lockdown measures this week after the death toll from COVID-19 infection rose past 12,000.

Meanwhile, independent budget forecasters said the UK economy could shrink by 35% in the April-June period, and the unemployment rate could more than double to 10% due to the government's coronavirus shutdown.

Housebuilders, travel stocks and advertising companies were among the biggest decliners, while BP and Royal Dutch Shell dragged the FTSE 100 lower as oil prices slumped 5%.

Stock markets elsewhere in Europe and Wall Street jumped amid talks of certain economies gradually reopening after weeks-long lockdown even as big US banks JPMorgan and Wells Fargo set aside billions of dollars to cover potential loan losses stemming from the pandemic.

Shares in Royal Bank of Scotland, Lloyds Banking Group and Barclays fell between 4% and 6%.

"Many investors are eyeing April as potentially the last major month of pain for Europe and Asia," said Edward Moya, senior market analyst at Oanda, New York. "The UK is still seeing news cases and the death toll rise, so expectations could be higher for a slightly slower start than France."

The domestically focused midcap index fell 2%,

with cinema operator Cineworld tumbling 18.4% after a report its lenders were exploring legal challenge to block the takeover of Canadian rival Cineplex.

Among gainers, AstraZeneca surged 6.8% after saying it would start a clinical trial of its cancer drug Calquence to assess its potential in the treatment of the exaggerated immune response associated with COVID-19 infection in severely ill patients.

Clothing retailer Next rose 2.5% as it hit a self-imposed daily limit within hours of re-opening its online business.

Companies listed on the pan-European STOXX 600 are expected to report an average 22% decline in earnings in the first quarter, and a 34.2% slump in the second quarter, according to Refinitiv data.

BAT shares shed 3.4% after a newspaper report that the company is under a criminal investigation by US regulators over suspected sanctions-busting.