London open: Stocks recover but coronavirus worries continue to weigh
By Michele Maatouk
Date: Tuesday 28 Jan 2020
(Sharecast News) - London stocks rose in early trade on Tuesday, recovering from heavy losses in the previous session, but gains were unspectacular amid ongoing concerns about the spread of the coronavirus.
At 0825 GMT, the FTSE 100 was up 0.4% at 7,444.04.
Neil Wilson, chief market analyst at Markets.com, said: "We see some relief early doors for Europe but global equity markets are still rocking, with boards lit up red as investors manage risk in the face of China's coronavirus outbreak. There are no signs of this letting up - but at least market expectations have shifted markedly since the middle of last week to better reflect the risk of a rapid rise in confirmed cases.
"The problem is investors have very limited visibility of the current situation in China, have virtually zero knowledge of epidemiology and virology, and have no clue how bad it will get or lasting the impact will be. Risk models are not geared for this situation."
Wilson noted that cases of the virus are rising fast, up to more 4,500 confirmed in China currently from 2,800 a day ago, while the death toll has hit triple figures.
"Authorities are tightening restrictions on foreign travel and on things like when workers will be allowed back to their posts after the new year holiday. For example, Shanghai is reportedly banning companies from restarting operations until Feb 9th. Foreign carmakers are pulling staff out.
"We know there will be an impact on consumption, but if factories are kept shut we will also see a downturn in output in Q1. The risk for the Chinese- and by implication the global economy - is that the lockdown across much of China persists for a longer time than currently anticipated, crippling output as well as consumption."
In equity markets, InterContinental Hotels was the standout gainer, having fallen sharply the day before on worries about the impact of the coronavirus.
Irn-Bru maker AG Barr fizzed to the top of the FTSE 250 as it said full-year adjusted profit before tax was expected to be at the top end of current market expectations, just ahead of £37m.
Retirement housebuilder McCarthy & Stone was on the front foot even as it reported a drop in full-year pre-tax profit, while Crest Nicholson also advanced despite posting a fall in annual profit.
Luxury fashion brand Burberry - which has large exposure to China - was in the red again.
Elsewhere, Avast retreated after an initiation at 'sell' by Peel Hunt, while Diageo was weaker on the back of a downgrade to 'underweight' at JPMorgan. Victrex fell after a downgrade to 'reduce' at HSBC.
Market Movers
FTSE 100 (UKX) 7,444.04 0.43%
FTSE 250 (MCX) 21,376.65 0.34%
techMARK (TASX) 4,215.05 0.54%
FTSE 100 - Risers
InterContinental Hotels Group (IHG) 4,652.00p 1.79%
Pearson (PSON) 588.60p 1.52%
Informa (INF) 801.60p 1.49%
Experian (EXPN) 2,681.00p 1.40%
Ashtead Group (AHT) 2,545.00p 1.31%
Smith & Nephew (SN.) 1,909.50p 1.19%
Compass Group (CPG) 1,922.00p 1.18%
Rolls-Royce Holdings (RR.) 644.00p 1.16%
Barratt Developments (BDEV) 802.40p 1.11%
Unilever (ULVR) 4,473.00p 1.00%
FTSE 100 - Fallers
Diageo (DGE) 3,157.00p -1.11%
Burberry Group (BRBY) 1,981.00p -0.88%
NMC Health (NMC) 1,352.00p -0.59%
Kingfisher (KGF) 201.50p -0.49%
Centrica (CNA) 88.64p -0.45%
BT Group (BT.A) 171.46p -0.27%
Aviva (AV.) 401.70p -0.25%
Next (NXT) 7,008.00p -0.14%
Tesco (TSCO) 245.10p -0.08%
Polymetal International (POLY) 1,268.00p -0.08%
FTSE 250 - Risers
Barr (A.G.) (BAG) 596.00p 9.56%
Finablr (FIN) 94.85p 5.04%
Vivo Energy (VVO) 117.60p 3.16%
Galliford Try (GFRD) 134.74p 2.75%
Trainline (TRN) 490.00p 2.51%
888 Holdings (888) 138.80p 2.36%
John Laing Group (JLG) 371.00p 2.26%
FirstGroup (FGP) 126.70p 2.26%
Vesuvius (VSVS) 454.40p 2.16%
McCarthy & Stone (MCS) 157.20p 2.14%
FTSE 250 - Fallers
Helios Towers (HTWS) 145.00p -3.97%
Hilton Food Group (HFG) 1,006.00p -2.90%
PayPoint (PAY) 977.00p -2.50%
Petrofac Ltd. (PFC) 336.30p -2.35%
Avast (AVST) 519.00p -1.98%
Hyve Group (HYVE) 98.90p -1.88%
Victrex plc (VCT) 2,250.00p -1.75%
Schroder Oriental Income Fund Ltd. (SOI) 245.00p -1.61%
Virgin Money UK (VMUK) 163.00p -1.48%
Bank of Georgia Group (BGEO) 1,482.00p -1.20%
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