London open: Stocks sink further as coronavirus response ramps up
By Josh White
Date: Wednesday 26 Feb 2020
(Sharecast News) - London stocks fell further at the open on Wednesday, as health officials sounded the alarm over the near-pandemic status of the ongoing outbreak of the Covid-19 coronavirus.
The FTSE 100 was down 0.58% at 6,977.01 at 0823 GMT, and the FTSE 250 was off 0.96% at 20,517.65.
Sterling was against its primary trading pairs, last losing 0.16% against the dollar to $1.2984 and falling 0.11% on the euro to €1.1939.
Overnight, the World Health Organisation warned that governments were "simply not ready" to tackle their own coronavirus outbreaks, as the virus spread further through Europe and UK officials announced plans for more widespread testing.
Bruce Aylward, who leads the joint WHO-China mission of experts, told the media that the success of authorities in the People's Republic in containing the infection had seen other governments take on a false sense of security.
Meanwhile, thousands of Britons were set to be tested by GPs for the virus, as the spread of cases in Europe led to the belief that there could be more cases in the UK than were currently known.
Mass surveillance was set to be introduced, with health officials also said to be mulling school closures and restrictions on transport.
"What we appear to be seeing is the realisation that global economic growth could well come to a halt as the combined effects of a flu virus and belated attempts to stem the spread of it across the globe, raise the prospect of an economic sneeze, as consumers stop spending, and supply chains seize up, due to workers and consumers staying at home," said CMC Markets' chief market analyst Michael Hewson.
"Over the last 12 months or so the consumer has been the one remaining pillar that has been carrying the global economy, helping in the process to push stock markets up to their recent records.
"Now that politicians have started to close borders, impose restrictions on movement, as well as impose quarantines, investors appear to be preparing the ground for the inevitable profit and revenue downgrades that are likely to appear in the coming weeks and months."
In equities, travel plays continued to be hit hard amid the virus outbreak, with TUI, easyJet, Carnival, InterContinental Hotels Group and British Airways owner IAG all lower in early trade.
Taylor Wimpey was down after reporting a 5% increase in group completions to 16,042 for the year ended 31 December, including joint ventures.
Its revenue increased 6.4% to ?4.34bn, while operating profit slipped to ?850.5m from ?880.2m, which the board said reflected its volume growth, offset by rising build costs and flat house prices.
HICL Infrastructure shares were just below the waterline, after it announced the acquisition of transmission assets associated with the Galloper Windfarm, located off the coast of Suffolk, by Diamond Transmission Partners - a consortium comprising it and Mitsubishi subsidiary Diamond Transmission Corporation.
The FTSE 250 company said the transaction was part of Tender Round 5 of Ofgem's Offshore Transmission Owner (OFTO) programme.
Rio Tinto was also in the red, even after it reported an 18% rise in full year underlying earnings on the back of soaring iron ore prices, offsetting lower shipments in 2019.
The company said it was prepared for the short-term impact to supply chains from the coronavirus outbreak.
Underlying earnings for the year to 31 December rose to $10.37bn from $8.81bn a year earlier.
FTSE 100 - Risers
Sainsbury (J) (SBRY) 204.90p 1.44%
HSBC Holdings (HSBA) 547.30p 1.41%
Bunzl (BNZL) 2,070.00p 0.98%
SSE (SSE) 1,615.00p 0.94%
United Utilities Group (UU.) 1,007.00p 0.70%
WPP (WPP) 915.80p 0.46%
Polymetal International (POLY) 1,325.50p 0.42%
Prudential (PRU) 1,425.50p 0.32%
Severn Trent (SVT) 2,586.00p 0.31%
National Grid (NG.) 1,037.40p 0.27%
FTSE 100 - Fallers
London Stock Exchange Group (LSE) 7,784.00p -3.57%
TUI AG Reg Shs (DI) (TUI) 711.00p -2.63%
easyJet (EZJ) 1,182.50p -2.51%
Carnival (CCL) 2,580.00p -2.24%
InterContinental Hotels Group (IHG) 4,501.00p -1.90%
Burberry Group (BRBY) 1,722.00p -1.82%
Flutter Entertainment (FLTR) 8,674.00p -1.66%
International Consolidated Airlines Group SA (CDI) (IAG) 544.00p -1.59%
Evraz (EVR) 354.00p -1.58%
Melrose Industries (MRO) 218.60p -1.58%
FTSE 250 - Risers
Vivo Energy (VVO) 106.80p 3.49%
Airtel Africa (AAF) 72.25p 3.21%
Senior (SNR) 152.80p 3.03%
Finablr (FIN) 75.00p 2.46%
Provident Financial (PFG) 459.00p 2.43%
888 Holdings (888) 127.40p 2.33%
Serco Group (SRP) 153.70p 1.99%
UK Commercial Property Reit Limited (UKCM) 86.10p 1.89%
Equiniti Group (EQN) 214.80p 1.80%
Weir Group (WEIR) 1,271.00p 1.64%
FTSE 250 - Fallers
SSP Group (SSPG) 569.00p -4.69%
WH Smith (SMWH) 2,100.00p -4.55%
Mediclinic International (MDC) 355.70p -3.97%
Galliford Try (GFRD) 156.00p -3.88%
Restaurant Group (RTN) 113.60p -3.32%
Cineworld Group (CINE) 161.85p -2.94%
Wood Group (John) (WG.) 380.50p -2.56%
Essentra (ESNT) 368.80p -2.28%
Balfour Beatty (BBY) 261.00p -2.25%
Ferrexpo (FXPO) 139.00p -2.11%
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