London close: Bounce in stocks falters as stimulus cast into doubt
London stocks finished flat on Tuesday, with the bounce from the heavy losses sustained during the previous session petering out as reports indicated that measures to help the US economy might take some time to make their way through Congress.
The FTSE 100 was 0.01% lower at 5,960.23, having fallen into bear market territory on Monday and suffering its worst day since the financial crisis of 2008 amid a collapse in oil prices and worries about the coronavirus.
Oil prices did claw back some of the losses incurred at the start of the week, with Brent crude up 7.4% at $37.11 a barrel. For context, Brent was near $70 a barrel earlier in January.
The recovery came even as Saudi Arabia pledged to flood the market with crude, as its oil price war with former ally Russia escalated. The state-controlled Saudi Aramco oil company said it would supply the market with 12.3m barrels of oil per day in April, a 25% hike on March’s production figure. It is more than Saudi Aramco is able to produce sustainably, prompting speculation Saudi Arabia would dip into its inventories to meet the planned increase. In February, Saudi Arabia produced around 9.7m bpd.
"The bounce off the lows last night was being viewed with a healthy dose of scepticism, which has been proved right. Markets, particularly in Europe, have been unable to hold on to gains, with wild intraday swings continuing to dominate the trading day," said IG's Chris Beauchamp.
"Unsurprisingly, markets have not been too impressed with the US administration’s response to the virus, with today’s press conference likely to lead to a crushing sense of disappointment that could prompt a fresh move to the downside. Ultimately, governments and central banks still look like they are playing catch-up to a fast-moving situation, and there is a weary sense that Thursday’s ECB meeting could go the same way."
Sentiment was also boosted by news that Barclays, Lloyds and RBS have offered support to firms affected by the coronavirus.
In equity markets, oil giants Shell and BP were among the top performers after Monday’s bloodbath, while budget airline easyJet flew higher after an upgrade to ‘outperform’ at Bernstein.
Informa advanced as the global exhibitions group said it had cancelled or delayed 128 events with an estimated revenue of £425m due to the coronavirus outbreak but reported a 13% rise in full-year pre-tax profit.
Asset manager Standard Life Aberdeen was in the green even as it reported a fall in adjusted full-year profits as revenues declined due to lower fee income.
Elsewhere, Ultra Electronics rallied after reporting a rise in full-year profit and revenue as it secured a number of new contract wins.
Market Movers
FTSE 100 (UKX) 5,960.23 -0.09%
FTSE 250 (MCX) 17,547.05 0.00%
techMARK (TASX) 3,531.61 -0.09%
FTSE 100 - Risers
Informa (INF) 600.00p 6.38%
Evraz (EVR) 246.80p 6.24%
Melrose Industries (MRO) 176.75p 5.95%
Aveva Group (AVV) 3,704.00p 4.87%
Hargreaves Lansdown (HL.) 1,336.00p 4.70%
Kingfisher (KGF) 169.65p 4.34%
Antofagasta (ANTO) 718.00p 3.86%
Standard Chartered (STAN) 475.10p 3.70%
Royal Dutch Shell 'A' (RDSA) 1,366.40p 3.69%
Rio Tinto (RIO) 3,377.00p 3.39%
FTSE 100 - Fallers
SSE (SSE) 1,422.00p -4.81%
National Grid (NG.) 933.20p -4.51%
Meggitt (MGGT) 463.50p -4.20%
Centrica (CNA) 55.22p -4.03%
Imperial Brands (IMB) 1,496.20p -3.87%
Sainsbury (J) (SBRY) 198.65p -3.47%
Bunzl (BNZL) 1,790.50p -3.34%
Berkeley Group Holdings (The) (BKG) 4,236.00p -3.02%
British American Tobacco (BATS) 2,897.50p -3.00%
DCC (DCC) 4,920.00p -3.00%
FTSE 250 - Risers
Pershing Square Holdings Ltd NPV (PSH) 1,368.00p 11.17%
Ultra Electronics Holdings (ULE) 2,066.00p 8.50%
Domino's Pizza Group (DOM) 308.50p 8.36%
Network International Holdings (NETW) 509.00p 7.61%
PureTech Health (PRTC) 274.00p 7.45%
FirstGroup (FGP) 101.30p 7.20%
Future (FUTR) 1,050.00p 7.14%
Ferrexpo (FXPO) 119.65p 6.83%
TBC Bank Group (TBCG) 1,200.00p 5.45%
Fisher (James) & Sons (FSJ) 1,736.00p 5.00%
FTSE 250 - Fallers
Finablr (FIN) 31.52p -25.91%
Cairn Energy (CNE) 71.75p -15.93%
Premier Oil (PMO) 23.00p -12.25%
Energean Oil & Gas (ENOG) 406.00p -7.83%
Cineworld Group (CINE) 96.02p -7.67%
Capita (CPI) 51.98p -6.68%
Intermediate Capital Group (ICP) 1,268.00p -6.43%
Avon Rubber (AVON) 2,265.00p -6.21%
Fresnillo (FRES) 617.60p -6.11%
Watches of Switzerland Group (WOSG) 312.00p -5.65%