London pre-open: Stocks set for more heavy losses amid coronavirus fears
By Michele Maatouk
Date: Friday 28 Feb 2020
(Sharecast News) - London stocks were set to tumble again on Friday, taking their cue from heavy losses in the US and Asia amid growing concerns about the coronavirus.
The FTSE 100 was called to open 216 points lower at 6,580.
On Thursday, US markets closed sharply lower, with the Dow Jones Industrial Average down 1,191 points, suffering its worst points decline in history and moving into correction territory.
CMC Markets analyst Michael Hewson said: "Not only does this week look set to be one of the worst weeks for European stocks since 2011, but it also looks set to be the worst monthly performance for stocks since the volatility seen at the end of 2018.
"As we come to the end of the week, and the month, the big question after six successive days of declines is whether we'll see an end to the rot in sentiment that we've seen in the past few days.
"If this morning's performance in Asia is anything to go by the answer looks likely to be no, with today set to look even worse, with European markets set to open sharply lower again, in another frenzy of selling, with few willing to try and catch this particular falling knife.
"Having become used to the tried and trusted method of buying the dip over the last 11 years, there now appears to be a marked reluctance to hold onto anything at all."
On the corporate front, aircraft engine maker Rolls-Royce narrowed operating losses, but still took an exceptional charge of ?1.36bn on its troubled Trent 1000 engine.
Reported group operating losses came in at ?852m from a loss of ?1.1bn a year earlier. Underlying operating profit rose 25% to ?808m after a strong fourth quarter.
Elsewhere, budget airline easyJet said it would cancel flights and introduce emergency cost cuts after the coronavirus outbreak caused a drop in demand for flights in and out of Italy and across Europe.
It said the fall in demand and load factors for Italy was significant and that business was weaker in other European markets.
EasyJet said it would cut administrative spending; freeze recruitment, promotion and pay; and postpone non-critical capital spending. It will also offer staff unpaid leave, stop non-mandatory training, press suppliers for price cuts and reorganise summer 2020 flights to maximise revenue when the market recovers.
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