London close: Selloff reignites as coronavirus sparks growth concerns
London stocks were hammered as the epicentre of new Chinese coronavirus cases shifted to the Continent and after the government published its mandate for trade talks with the European Union which did not exclude the possibility of leaving the bloc without a deal having been struck.
Overnight, in its 37th situation update, the World Health Organisation said that the number of new Chinese coronavirus cases slipped to 412, taking the total there to 78,191, while in the rest of the world the number of new cases increased by 459 - albeit to only 2,918.
Commenting on the outlook for stocks, IG chief market analyst, Chris Beauchamp, said: "There are few signs of a recovery, and the price is certainly not showing signs of life, but market breadth is rapidly reaching 'washout' levels.
"The problem is that such selloff usually do not bottom on a single day, but can see a brief but vicious rally before falling back again. Volatility begets volatility, leading to tough times for investors but possible rich pickings for traders."
By the close of trading, the FTSE 100 had fallen 3.49% to 6,976.40 and the FTSE 250 had given back 4.07% to 19,783.45, alongside a 0.26% dip in Sterling's value versus the US dollar to 1.2875, while against the euro it slumped 1.05% to 1.1734.
IAG, Esayjet and TUI were all at the bottom of the pile, amid a 7.57% downdraft in the Stoxx 600 sector gauge for Travel & Leisure stocks.
Weiging on Sterling, the government's mandate for trade talks with the European Union, published on Thursday afternoon, appeared to leave open the possibility of leaving the bloc without a deal.
The so-called 'acid test' would be progress on talks with Brussels over financial services and data protection, with the government stating that it would decide in June whether enough progress was being made or if to focus on preparations for leaving the bloc on World Trade Organisation terms.
To take note of as well, overnight health officials in California had reported the first case of local transmission.
That warning prompted Rabobank analysts to muse out loud: "We have highlighted previously the fact that China’s far greater importance as a link in the global supply chain sees comparisons of the potential impact of coronavirus with that of SARS some 17 years ago very much wide of the mark."
On a related note, analysts at BofA Securities cut their 2020 forecast for growth in global gross domestic product to 2.8% - the least since 2009 - and that for the euro area from 1.0% to 0.6%.
Analysts at Goldman Sachs and Citi meanwhile were anticipating further losses in US stocks as a result of the uncertainty around the coronavirus and how and when the Federal Reserve would respond, Bloomberg reported.
US politics were also in focus.
Speaking to broadcaster CNBC, DoubleLine Capital founder, Jeffrey Gundlach, said: "if people get more worried about Bernie Sanders and they start to price in his spending programs, then you could really start to see trouble in both bonds and stocks, which could really be on a rough ride."
In stockmarkets, IAG, Easyjet and TUI were the among the biggest fallers on the top-flight index as traders moved to price-in the near-term hit to travel.
But the biggest drop was in WPP, after the advertising giant posted a decline in full year pre-tax profits and forecast flat organic growth and operating profit margins for the current fiscal year.
Pre-tax profits at WPP fell to £982m from £1.2bn as revenue less pass-through costs slipped 0.3% to £10.8bn.
Barclays was another notable faller, registering some of the biggest trading volumes of the session, alongside former stockmarket darling Evraz.
Hikma Pharmaceuticals was the top gainer on the FTSE 100 after reporting a 6% improvement in group core revenue in its preliminary results to $2.2bn (£1.7bn).
Rentokil was right behind following rise in full-year profit as it benefited from an increasing presence in growth markets and higher levels of customer retention.
Over on the second-tier index, Finablr was biggest percentage loser after shares of NMC Health were suspended from trading amid ongoing serious doubts on the part of some analysts around its accounting.
Late in the afternoon, NMC Health announced that the Financial Conduct Authority had launched a formal enforcement investigation.
Aston Martin skidded lower alongside after the luxury sportscar-maker warned of the impact of the coronavirus on its key Chinese market and announced that its finance chief would step down before the end of April.
Stock in Hunting was bolstered after the energy services group launched its first share buyback the day after reporting a decline in annual profit caused by a slowdown in the US shale gas industry.
Market Movers
FTSE 100 (UKX)6,796.40-3.49%
FTSE 250 (MCX)19,783.45-4.07%
techMARK (TASX)3,877.46-2.92%
FTSE 100 - Risers
Hikma Pharmaceuticals (HIK)1,910.00p4.63%
Rentokil Initial (RTO)501.20p1.69%
RSA Insurance Group (RSA)535.00p0.56%
Mondi (MNDI)1,620.00p-0.03%
GlaxoSmithKline (GSK)1,634.20p-0.17%
Centrica (CNA)76.50p-0.26%
Smith & Nephew (SN.)1,828.00p-0.63%
National Grid (NG.)1,039.80p-0.80%
Polymetal International (POLY)1,294.50p-1.07%
Severn Trent (SVT)2,561.00p-1.08%
FTSE 100 - Fallers
WPP (WPP)761.60p-16.16%
Evraz (EVR)337.00p-10.52%
TUI AG Reg Shs (DI) (TUI)654.20p-8.15%
International Consolidated Airlines Group SA (CDI) (IAG)516.00p-7.90%
easyJet (EZJ)1,095.00p-7.69%
Barclays (BARC)154.44p-6.93%
Flutter Entertainment (FLTR)8,226.00p-6.80%
Legal & General Group (LGEN)269.10p-6.79%
Carnival (CCL)2,397.00p-6.73%
Prudential (PRU)1,327.50p-6.68%
FTSE 250 - Risers
Hunting (HTG)331.00p13.20%
Vesuvius (VSVS)419.40p2.97%
Kainos Group (KNOS)772.00p1.58%
RHI Magnesita N.V. (DI) (RHIM)3,052.00p1.53%
Drax Group (DRX)262.40p1.00%
National Express Group (NEX)416.00p0.82%
Daejan Holdings (DJAN)8,020.00p0.00%
Contour Global (GLO)179.00p0.00%
Millennium & Copthorne Hotels (MLC)687.00p0.00%
PPHE Hotel Group Ltd (PPH)1,750.00p0.00%
FTSE 250 - Fallers
Finablr (FIN)57.20p-17.99%
G4S (GFS)164.60p-15.07%
Playtech (PTEC)272.70p-11.17%
PureTech Health (PRTC)290.00p-10.77%
Bakkavor Group (BAKK)112.00p-10.11%
Frasers Group (FRAS)401.20p-9.84%
Aston Martin Lagonda Global Holdings (AML)355.80p-9.00%
Hammerson (HMSO)207.90p-8.82%
William Hill (WMH)157.50p-8.43%
IWG (IWG)384.00p-8.35%