London open: Stocks drop as coronavirus epicentre shifts outside China

Some investors were also keeping a wary eye on US politics.

As of 0831 GMT, the FTSE 100 was falling 2.59% to 6,859.99, alongside a 0.23% rise in Sterling versus the US dollar to 1.2929, but against the euro, Sterling was down by 0.31% at 1.1822.

Overnight, in its 37th situation update, the World Health Organisation said that the number of new Chinese 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.

Commenting on that shift in the COVID-19 caseload, CMC Markets UK analyst, Michael Hewson, told clients: "This shift has prompted real concerns about the longer-term economic impact of this virus on trade, on ports, on supply chains, and on consumer confidence.

"[...] While this might seem excessive for a virus that the World Health Organisation (WHO) says 80% of people only experience mild symptoms of and recover quite quickly, it nonetheless speaks to a mindset on the part of investors which has completely switched from excessive optimism to outright pessimism in less than a week."

In the background, futures on the S&P 500 were pointing to a 30.75 point fall at the opening bell on Wall Street to 3,079.50 after the US Centers for Disease Control reported the first case of local transmission of the coronavirus in California.

To take note of, after the close of trading, US technology giant Microsoft warned it would not meet some of its third quarter guidance due to the coronavirus's impact.

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."

US politics were also in focus.

In remarks 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."

Back on home shores, and in the corporate space, Rentokil posted a rise in full-year profit as it benefited from an increasing presence in growth markets and higher levels of customer retention.

In the year to the end of December 2019, adjusted pre-tax profit at actual exchange rates rose 10.7% to £340.90m, reflecting growth in all operating regions, while revenue was up 9.8% to £2.7bn. Rentokil achieved organic revenue growth of 4.5%, which was its highest level of annual growth in 15 years and in excess of its medium-term financial target of 3% to 4% growth per year.

Elsewhere, building materials group Howdens Joinery reported a rise in annual pre-tax profits as it opened new depots, adding that it had lifted stock levels for products sourced from China due to the coronavirus.

Pre-tax profits increased 9.3% to £260.7m, rising faster than sales, Howden said. Group revenue was up 4.8% to £1.6bn as gross margin also improved.

"With respect to coronavirus, we are monitoring our supply chain closely and have increased forward stock levels for product sourced from China, whilst reviewing alternative sources and means of supply," it said.

Standard Chartered warned income growth would be lower than its target in 2020 as the Asia-focused bank reported an 8% increase in 2019 underlying profit.

The FTSE 100 lender said low interest rates, slower global growth, a weaker Hong Kong economy and the coronavirus outbreak would push income growth below its 5-7% medium-term goal. Achieving the group's 10% return on equity target will take longer than expected, it added.

Underlying pretax profit for the year to the end of December rose to $4.2bn from $3.9bn a year earlier as income increased 2% to $15.3bn.

Market Movers

FTSE 100 (UKX) 6,880.80 -2.30%
FTSE 250 (MCX) 20,167.55 -2.21%
techMARK (TASX) 3,914.49 -1.99%

FTSE 100 - Risers

Hikma Pharmaceuticals (HIK) 1,865.50p 2.19%
RSA Insurance Group (RSA) 541.80p 1.84%
British American Tobacco (BATS) 3,225.00p 0.17%
Polymetal International (POLY) 1,310.00p 0.11%
NMC Health (NMC) 938.40p 0.00%
Pearson (PSON) 578.40p -0.28%
Rentokil Initial (RTO) 493.60p -0.40%
Croda International (CRDA) 4,760.00p -0.46%
GlaxoSmithKline (GSK) 1,623.80p -0.54%
National Grid (NG.) 1,038.20p -0.95%

FTSE 100 - Fallers

WPP (WPP) 768.20p -15.43%
easyJet (EZJ) 1,099.00p -8.61%
TUI AG Reg Shs (DI) (TUI) 668.40p -6.39%
Persimmon (PSN) 2,884.00p -6.30%
Barclays (BARC) 156.70p -5.57%
JD Sports Fashion (JD.) 748.20p -4.54%
Flutter Entertainment (FLTR) 8,432.00p -4.46%
Standard Chartered (STAN) 566.20p -4.29%
International Consolidated Airlines Group SA (CDI) (IAG) 536.80p -4.07%
Evraz (EVR) 362.10p -3.85%

FTSE 250 - Risers

Hunting (HTG) 302.00p 3.28%
Drax Group (DRX) 265.40p 2.16%
Fisher (James) & Sons (FSJ) 1,850.00p 1.98%
Watches of Switzerland Group (WOSG) 355.00p 1.72%
Vivo Energy (VVO) 106.20p 1.14%
Apax Global Alpha Limited (APAX) 170.50p 0.89%
Schroder Oriental Income Fund Ltd. (SOI) 236.00p 0.85%
BBGI SICAV S.A. (DI) (BBGI) 161.00p 0.62%
NextEnergy Solar Fund Limited Red (NESF) 118.00p 0.43%
Airtel Africa (AAF) 69.25p 0.36%

FTSE 250 - Fallers

Finablr (FIN) 57.40p -17.71%
Aston Martin Lagonda Global Holdings (AML) 338.80p -13.35%
Playtech (PTEC) 269.50p -12.21%
G4S (GFS) 175.60p -9.39%
Micro Focus International (MCRO) 732.50p -5.12%
Inchcape (INCH) 566.00p -4.87%
Wizz Air Holdings (WIZZ) 3,536.00p -4.82%
Cineworld Group (CINE) 156.50p -4.81%
Restaurant Group (RTN) 103.90p -4.68%
Marks & Spencer Group (MKS) 164.15p -4.54%