London midday: Stocks still in the red amid Covid-19 worries
By Michele Maatouk
Date: Wednesday 08 Apr 2020
(Sharecast News) - London stocks were still in the red by midday on Wednesday as investors fretted about the impact of the coronavirus after a meeting of EU finance ministers failed to yield an agreement on how to tackle the crisis.
The FTSE 100 was down 1.5% at 5,616.55, while sterling was 0.1% firmer against the dollar at 1.2334 as Prime Minister Boris Johnson spent a second night in intensive care.
IG analyst Joshua Mahony said: "Recent optimism over the turning tide of the coronavirus starting to come under pressure. While many had focused on the experience of countries such as Spain and Italy, we are seeing daily deaths within the UK, US, Germany, and France continue to rise."
Mahony said "European Union dysfunctionality is the talk of the town" after finance ministers failed in their bid to introduce an aid package worth half a trillion euros.
"This is just the latest in a list of worrying events which highlight the feeling of dissatisfaction over the EUs coronavirus response, with Italian polls showing a huge decline in support for the EU and their structures.
"While claims that the EU is falling apart may be somewhat sensationalist, the squabbles seen last night were a clear reminder of just how difficult it can be to find agreement between 27 nations who have all seen vastly different experiences in recent weeks. Until a resolution on this package is found, we could see stock markets continue to struggle."
Investors were also looking ahead to the release of the minutes from the Federal Reserve's emergency meeting on 15 March.
In corporate news, Tesco slid after it posted an 18.7% decline in full-year pre-tax profit but increased its final dividend as it estimated that the cost to recruit thousands of extra staff to cope with demand and employees taking time off because of the coronavirus would be between £650m and £925m.
Insurers were under the cosh, with Direct Line, RSA and Aviva all sharply lower after they suspended their dividends due to the pandemic and following pressure from the Bank of England. Legal & General, which confirmed last week that it will pay a 2019 dividend, was also weaker.
Russ Mould, investment director at AJ Bell, said: "In theory the insurance sector shouldn't be subject to the same erosion of revenue seen in other sectors. Premiums should continue to flow as people will still have to insure their cars, homes, businesses and lives through the coronavirus crisis.
"However, the level of claims that will come through is hard to quantify at this point. It would not be a good look for the industry to be taking a very hard line with its customers while continuing to pay out millions to its shareholders."
On the upside, exhibitions and conference company Hyve gained after saying it was pulling its dividend due to the Covid-19 outbreak as more than a quarter of its workforce has been put on furlough and the leadership team takes a pay cut.
Market Movers
FTSE 100 (UKX) 5,616.55 -1.54%
FTSE 250 (MCX) 15,491.78 -0.50%
techMARK (TASX) 3,311.41 -0.28%
FTSE 100 - Risers
Melrose Industries (MRO) 94.78p 3.02%
Intermediate Capital Group (ICP) 1,052.00p 2.83%
Whitbread (WTB) 2,708.00p 2.03%
Pearson (PSON) 507.60p 1.83%
Evraz (EVR) 252.60p 1.73%
Land Securities Group (LAND) 607.60p 1.57%
SSE (SSE) 1,174.50p 1.51%
United Utilities Group (UU.) 845.80p 1.49%
Aveva Group (AVV) 3,484.00p 1.34%
Halma (HLMA) 1,928.50p 1.31%
FTSE 100 - Fallers
Aviva (AV.) 245.40p -7.99%
M&G (MNG) 122.40p -5.88%
Rolls-Royce Holdings (RR.) 316.10p -5.84%
Sainsbury (J) (SBRY) 194.35p -5.66%
Glencore (GLEN) 134.18p -5.16%
Tesco (TSCO) 213.20p -4.91%
Royal Bank of Scotland Group (RBS) 110.15p -4.67%
Barclays (BARC) 90.64p -4.38%
Standard Life Aberdeen (SLA) 211.90p -4.20%
RSA Insurance Group (RSA) 387.10p -4.02%
FTSE 250 - Risers
Hyve Group (HYVE) 20.05p 15.23%
Rank Group (RNK) 158.00p 13.83%
FirstGroup (FGP) 67.50p 9.14%
SSP Group (SSPG) 292.20p 7.66%
Avast (AVST) 393.20p 6.96%
4Imprint Group (FOUR) 2,010.00p 5.46%
Frasers Group (FRAS) 211.80p 4.96%
Senior (SNR) 68.25p 4.60%
Stagecoach Group (SGC) 79.25p 4.34%
Sabre Insurance Group (SBRE) 276.50p 4.34%
FTSE 250 - Fallers
Aston Martin Lagonda Global Holdings (AML) 77.00p -9.62%
Direct Line Insurance Group (DLG) 270.70p -7.10%
Ascential (ASCL) 195.00p -7.05%
Virgin Money UK (VMUK) 71.26p -6.11%
UDG Healthcare Public Limited Company (UDG) 591.00p -5.67%
Energean Oil & Gas (ENOG) 707.00p -5.48%
Man Group (EMG) 118.35p -5.17%
RIT Capital Partners (RCP) 1,762.00p -5.17%
Grafton Group Units (GFTU) 573.50p -4.42%
HGCapital Trust (HGT) 206.50p -4.40%
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN