London close: Stocks slip as coronavirus cases climb outside of China

Stocks on Wall Street had rallied on Wednesday after former Vice President Joe Biden emerged as the frontrunner of the Democratic Party’s presidential race and as Congress approved $8.3bn in emergency funding to respond to the coronavirus outbreak.

But by the end of trading on Thursday, the FTSE 100 was down 1.62% at 6,705.43 and the FTSE 250 had given back 2.13% to 19,323.13.

"What was largely a Chinese issue just a month ago, has turned into a global crisis that threatens to throw the world economy into recession," said IG's Josh Mahony.

"The growth of the virus may have seemed relatively gradual outside of China, yet the growth in cases outside the country has actually been an incredible 6600% over that timeframe. We are at a tipping point, where a similar month of growth for the virus will likely spark a global panic and bring severe economic consequences that have yet to be realised."

Overnight, the number of new virus cases in South Korea had slowed noticeably, hitting 435 which was "well below" the five-day average increase of 684, Ian Shepherdson at Pantheon Macroeconomics pointed out.

But in Italy the case count jumped by 587, versus a five-day average of 369, and in Iran by 586 against a five-day average of 418.

And in Germany, France and Spain together, 204 more cases were reported, more than double those on the previous day.

"The broadening of the global outbreak outside the big four is disconcerting, and the patterns seen in the initial outbreaks suggests that yesterday’s dip in the total number of worldwide new cases will prove temporary," Shepherdson said.

In UK equity markets, ex-dividend stocks were a drag, with Evraz, Rio Tinto, Persimmon, Standard Chartered, BHP and RSA Insurance all in the frame.

But the biggest drag on the top-flight index was ITV as the broadcaster said it expected a fall in travel-related advertising in April due to the coronavirus outbreak and reported lower full-year profits.

Also to be found near the bottom of the pile were Travel & Leisure stocks, including Carnival, TUI and IAG.

Weighing on the latter in particular, business trade group IATA predicted that the global air passenger transport sector was staring at as many as $113bn of lost revenues due to the virus in 2020, up from a previous estimate of $29.3bn.

To the upside, Admiral announced plans for co-founder David Stevens to quit as chief executive as reserve releases helped the insurer post record annual profit of more than £500m.

On the second-tier index meanwhile, outsourcer Capita crashed after reporting a pre-tax loss of £62.6m for 2019 compared to a profit of £272.6m the year before, while event organiser Hyve lost ground as it warned that profit and revenue for 2020 would take a hit from events postponed due to the coronavirus.

Cineworld followed close behind as Peel Hunt downgraded its rating on the stock to ‘hold’ from ‘buy’ and slashed the price target to 140p from 300p, highlighting coronavirus risks. The broker pointed to the postponement of the latest James Bond film and concerns about going to the cinema amid the outbreak of Covid-19.

Spirent Communications was the top gainer on the FTSE 250 after the communications and testing group said that its order intake in 2019 benefited from an increased level of multi-year support contract wins, with 24% of the closing order book for delivery in more than 12 months, compared to 17% at the end of the prior year.

Melrose Industries rallied as the turnaround specialist posted a rise in annual profit and revenue and hiked its dividend after its first full year of ownership of GKN.

Market Movers

FTSE 100 (UKX) 6,705.43 -1.62%
FTSE 250 (MCX) 19,323.13 -2.13%
techMARK (TASX) 3,874.08 -0.47%

FTSE 100 - Risers

Admiral Group (ADM) 2,238.00p 2.61%
British American Tobacco (BATS) 3,244.50p 1.26%
Hikma Pharmaceuticals (HIK) 1,947.00p 0.96%
Vodafone Group (VOD) 140.86p 0.92%
Imperial Brands (IMB) 1,658.00p 0.86%
Pearson (PSON) 569.80p 0.81%
Morrison (Wm) Supermarkets (MRW) 185.20p 0.79%
Halma (HLMA) 2,085.00p 0.72%
Smith (DS) (SMDS) 328.10p 0.68%
Reckitt Benckiser Group (RB.) 6,140.00p 0.66%

FTSE 100 - Fallers

ITV (ITV) 102.50p -12.02%
Evraz (EVR) 289.30p -11.91%
Carnival (CCL) 2,133.00p -7.26%
TUI AG Reg Shs (DI) (TUI) 539.80p -7.24%
Rio Tinto (RIO) 3,648.50p -7.14%
Persimmon (PSN) 2,766.00p -6.93%
BHP Group (BHP) 1,406.00p -6.24%
International Consolidated Airlines Group SA (CDI) (IAG) 423.10p -5.35%
Kingfisher (KGF) 178.90p -5.27%
Legal & General Group (LGEN) 248.00p -5.16%

FTSE 250 - Risers

Spirent Communications (SPT) 249.50p 17.41%
CLS Holdings (CLI) 268.00p 3.28%
Pagegroup (PAGE) 381.20p 3.14%
Barr (A.G.) (BAG) 555.00p 2.78%
Centamin (DI) (CEY) 143.00p 2.33%
Playtech (PTEC) 238.80p 2.27%
HGCapital Trust (HGT) 248.50p 1.64%
Mediclinic International (MDC) 370.60p 1.62%
Dechra Pharmaceuticals (DPH) 2,830.00p 1.58%
888 Holdings (888) 109.70p 1.57%

FTSE 250 - Fallers

Capita (CPI) 77.90p -38.42%
Finablr (FIN) 41.24p -16.04%
Premier Oil (PMO) 67.66p -14.44%
Cineworld Group (CINE) 121.50p -12.97%
Tullow Oil (TLW) 27.71p -11.78%
Restaurant Group (RTN) 83.00p -10.80%
FirstGroup (FGP) 106.20p -7.97%
Man Group (EMG) 133.15p -7.95%
Trainline (TRN) 453.00p -7.83%
Hyve Group (HYVE) 65.30p -7.64%