London close: Benchmark turns green again after roller coaster session
London stocks had bounced back into the green by the close on Tuesday after a roller coaster session, amid growing concerns about the impact of the coronavirus pandemic, as cinema chains closed their doors and once-iconic retailer Laura Ashley fell into administration.
The FTSE 100 ended the day up 2.79% at 5,294.90, while the FTSE 250 fell 2.96% to 13,924.88.
Sterling was mixed against its major trading pairs, falling 1.56% against the dollar to $1.2079, while strengthening 0.3% on the euro to €1.1005.
“The government response from around the globe appears to be ramping up once again, as the chancellor prepares to unveil more measures to help support businesses,” said analysts at IG.
“Whatever is announced, the measures will be expensive, but if they can form a credible package, and one co-ordinated with other governments, then markets may try to find a positive, although it may take time.”
After the close, Chancellor Rishi Sunak confirmed the British government would offer £330bn in loans to businesses to help them cope with the financial impact of the coronavirus pandemic.
Ahead of the press conference, the Office for Budget Responsibility called on Sunak to spend heavily to help businesses counter the impact of the virus outbreak.
The OBR told MPs that the wartime conditions caused by the virus justified abandoning worries about the public finances.
Robert Choate, the OBR's chair, told the Treasury committee the government could not afford to be choosy when supporting businesses.
"When the fire is large enough you just spray water and worry about it later," he said.
Referring to £12bn of measures announced by Sunak in his recent budget, Chote said: "One regards the £12bn as being a downpayment.
“The idea of what needs to be done and how expensive it needs to be is going to change on a daily basis. In some ways it’s like a wartime situation.”
Market mood was downbeat for much of the session, with Odeon, Cineworld and Picturehouse all announcing the closure of their cinemas due to the coronavirus, after Prime Minister Boris Johnson urged an end to all non-essential social contact.
Cineworld shares tumbled 43%, while shares of pub operators JD Wetherspoon fell 7.46%, Marston’s lost 21.89%, and Mitchells & Butlers lost 8.24% after Johnson called on the public to avoid bars, pubs and restaurants.
Transport operators also slumped, with FirstGroup plunging 25% and National Express sliding 33.67%, while usual suspects TUI and cruise operator Carnival fell 10.76% and 15.84%, respectively.
Housebuilders Taylor Wimpey and Barratt Developments were also under the cosh, by 7.59% and 0.77%, respectively.
Compass Group shares slid 4.24% after the food services company warned that interim operating profit could fall by up to £225m due to the coronavirus.
Outside the FTSE 350, Laura Ashley became the first retail casualty of the outbreak as it said it was going into administration after rescue talks were scuppered by pandemic.
Its shares ended the day down 60.18%.
On the upside, Antofagasta surged 16.05% as the Chilean copper producer reported increased full-year profits as sales rose and costs fell, but warned spending was under review in light of tough global economic conditions.
Education publisher Pearson rose 5.16% on the back of an upgrade to ‘neutral’ at Goldman Sachs, while Petrofac gushed 4.67% higher after Goldman upped it to ‘buy’.
Dixons Carphone gained 10.79% after saying it will close its 531 standalone Carphone Warehouse stores in the UK as it focuses on selling mobile devices and connectivity through Currys PCWorld stores and online.
The company said 2,900 jobs will be lost.
Market Movers
FTSE 100 (UKX)5,294.902.79%
FTSE 250 (MCX)13,924.88-2.96%
techMARK (TASX)3,033.350.64%
FTSE 100 - Risers
Antofagasta (ANTO)720.20p16.05%
Ocado Group (OCDO)1,361.00p10.38%
Admiral Group (ADM)2,232.00p10.11%
Schroders (SDR)2,342.00p9.95%
Vodafone Group (VOD)107.72p9.90%
Unilever (ULVR)4,092.50p9.84%
Morrison (Wm) Supermarkets (MRW)177.60p9.84%
National Grid (NG.)948.50p9.81%
Smith (DS) (SMDS)293.50p8.10%
Reckitt Benckiser Group (RB.)5,729.00p8.09%
FTSE 100 - Fallers
JD Sports Fashion (JD.)342.30p-17.95%
Meggitt (MGGT)315.80p-17.44%
Carnival (CCL)942.60p-15.84%
ITV (ITV)65.58p-12.64%
TUI AG Reg Shs (DI) (TUI)280.40p-10.76%
Smiths Group (SMIN)866.60p-9.86%
Rolls-Royce Holdings (RR.)388.50p-9.65%
Kingfisher (KGF)124.40p-9.49%
Bunzl (BNZL)1,396.50p-8.52%
RSA Insurance Group (RSA)369.20p-7.70%
FTSE 250 - Risers
Capita (CPI)33.21p18.65%
Aston Martin Lagonda Global Holdings (AML)170.00p18.18%
Energean Oil & Gas (ENOG)385.50p16.47%
Contour Global (GLO)157.00p16.11%
Kaz Minerals (KAZ)333.40p15.36%
Ferrexpo (FXPO)122.75p13.86%
Airtel Africa (AAF)33.22p13.61%
Victrex plc (VCT)2,096.00p13.48%
Centamin (DI) (CEY)113.40p12.95%
Fresnillo (FRES)584.80p10.97%
FTSE 250 - Fallers
Elementis (ELM)25.00p-43.97%
Cineworld Group (CINE)21.38p-43.00%
National Express Group (NEX)132.50p-33.67%
SSP Group (SSPG)221.50p-33.12%
Go-Ahead Group (GOG)526.50p-28.07%
William Hill (WMH)48.49p-26.46%
Hyve Group (HYVE)22.00p-26.05%
FirstGroup (FGP)30.00p-25.00%
Pollen Street Secured Lending (PSSL)488.00p-23.75%
Marston's (MARS)22.20p-21.89%