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FTSE 100 tanks 3% as pandemic fears are heightened

Britain's blue chip benchmark closed down over 247 points at 7,156. The FTSE 250 shed over 670 points at 21,109

Associated British Foods PLC -
London stocks plummeted like other markets around the globe
  • FTSE 100 plunges 247 points 
  • US markets lower
  • Greatland Gold wanted after Newcrest update on progress at Havieron project

5pm: FTSE 100 closes deeply in the red

FTSE 100 index tumbled along with other stock markets on Monday as the world was told to brace for a potential coronavirus pandemic.

Airlines and travel groups plunged as the World Health Organization (WHO) said countries should be 'in a phase of preparedness', although it was too early to call it that yet, as the death toll mounts and cases of the infection increase in Europe.

Britain's blue chip benchmark closed down over 247 points at 7,156. The FTSE 250 shed over 670 points at 21,109.

On Wall Street, the Dow Jones Industrial Average plunged over 914 points, while the S&P 500 shed a staggering 101 points.

"A rising number of cases in Italy, Iran, and South Korea highlight the international nature of this virus, with many fearing that we are passing the point at which it can be contained," said analyst Chris Beauchamp at IG, the online trader.

"Most worryingly, the ongoing search for the ‘patient zero’ that brought the virus to the country means we could see cases ramp up and spread rapidly." 

At CMC Markets, analyst David Madden, added: "Dealers are worried the coronavirus is going to be become a global issue, whereas until recently many traders were behaving as if it was just an issue for the Far East, and in particular China."

Top Footsie laggard was carrier EasyJet (LON:EZJ), which shed 16.57% to 1,258.5p, while TUI AG (LON:TUI) sank 10.06% to 765.40p.

3pm: US stocks tank

The Dow Jones industrial average was down an eye-watering 750 points (2.6%) at 28,242 in the first half-hour of trading.

Following the global trend, US stocks opened sharply lower; the S&P 500 was down 2.5% at 3,255.

Reports from the ANSA News Agency indicate that the death toll related to the coronavirus outbreak in Italy has now risen to six.

Iraq said earlier today it had detected its first case of the virus; in neighbouring Iran the situation is much worse, with 12 people dead as a result of contracting the virus, according to official reports, although unofficial reports put the death toll much higher, with one report suggesting there had been 50 deaths related to the virus in the city of Qom alone.

In the UK, the FTSE 100 has settled at around the 7,145 level, down 259 points (3.5%).

Given the popularity of gold today Greatland Gold PLC (LON:GGP) chose a good day to flag up the release of a presentation by Newcrest on the mining company's progress at Greatland's Havieron project in Western Australia.

Newcrest has farmed into the project and has the right to earn up to a 70% interest by spending up to US$65mln exploring and developing the site.

Greatland's shares were up 8.9% at 5.28p.

2.15pm: FTSE 100 resumes retreat as sixth Italian death is reported

The coronavirus-related death toll in Italy has risen again, as a sixth person – a cancer patient - has been reported dead.

On the plus side, The World Health Organization reported “steep declines” in the number of coronavirus cases in China.

The FTSE's rally ocer the lunchtime trading session proved brief and the index is now on or around its low point of the day at 7,138, down 266 points (3.6%).

Many gold mining companies are defying the trend, aming them China Nonferrous Gold Limited (LON:CNG), which is up 2.4% at 11.1p following a production report.

The mineral exploration and mining company that is currently mining the Pakrut gold project in the Republic of Tajikistan revealed a total of 731,600 tons of ore was extracted from the mine in 2019.

1.05pm: FTSE 100 bottoms out as fifth Italian death is reported

The death toll related to the coronavirus in Italy has risen to five.

The price of gold has risen to levels not seen since 2013 as investors bale out of equities and into the yellow metal, although the afternoon has at least seen the FTSE 100 pull out its nose-dive; the index is down 223 points (3.0%) at 7,181.

US benchmarks are set to open deep in the red in a couple of hours. Spread betting quotes have the Dow Jones trading at around 28,238 – down around 754 points – and the S&P 500 at about 3,255, down 13 points.

“Equities have finally succumbed,” was the verdict of Rupert Thompson, the chief investment officer at Kingswood.

“The recent spread of the virus outside of China, with Korea and Italy both now imposing quite radical containment measures, has spooked equity markets. It has also fuelled further gains in ... havens such as gold and US Treasuries,” he added.

“While cases outside China are rising fast, which is undoubtedly worrisome, one should not lose sight of the fact that they are still below 2500. This is dwarfed by the 77,000 cases in China, where the latest news has actually been very reassuring,” he added.

It's an ill wind that blows nobody any good and market makers continue to crank up the asking price of Novacyt SA (LON:NCYT), the Anglo-French diagnostics company that has developed a coronavirus diagnostic kit.

Novacyt's shares, available at a cheeky 13p at the end of 2019, have risen as high as 166p this year; they are currently up 37% on the day at 144p.

12.15pm: You can't stage a stock market rally on Centamin alone ...

Gold is the investor's friend, although it won't ward off the coronavirus.

The yellow metal was trading 2.1%, or US$34.70, higher at US$1,683.80 an ounce on futures markets as investors dumped equities and went into what is traditionally seen as a haven for risk-averse investors.

In contrast, the FTSE 100 has crashed 245 points (3.3%) to 7,159.

“South Korea and Italy have both reported rising COVID-19 case counts over the weekend, and today reports of 161 new confirmed cases in South Korea has spurred risk aversion even deeper. South Korea being another supply chain centre and key logistics hub is now on high alert level, intensifying the already ongoing regional supply chain disruptions,” reported Eleanor Creagh, the Australian market strategist at Saxo Bank.

“Shutdowns and production delays have the capacity to cause unexpected bottlenecks across many production lines even if the virus spread peaks soon and it is those non-linear supply-side effects like production bottlenecks that are the real wildcard in terms of further downgrades to growth, earnings and longer-term disruptions,” she added.

The mid-cap FTSE 250 is faring little better than its bigger brother; the index is down 688 points (3.2%) at 21,092, with just seven index constituents on the rise – and three of those are gold miners, namely: Fresnillo Plc (LON:FRES), up 3.9%; Hochschild PLC (LON:HOC), up 2.4%); and Centamin PLC (LON:CEY), up 0.4%.

Unfortunately, you cannot stage a stock market rally on Centamin alone ...

11.10am: FTSE 100 in free-fall after fourth coronavirus-related death in Italy

With a fourth person in Italy dying as a result of the coronavirus, contagion fears are driving stock market sentiment.

It's probable that over the same period, scores of people have died as a result of the influenza virus and no one seems unduly worried about that; the fear of the new has definitely got investors worried as a result of which the FTSE 100 is down 255 points (3.4%) at 7,149.

When serial disappointer Pearson PLC (LON:PSON) is one of the few blue-chip stocks to eke out a gain, you know it is not a regular day in the stock market.

The academic publisher, which has around 8.2% of its shares sold short in the market (i.e. sold by speculators gambling the shares will fall), was up 3% at 578p and topping the FTSE 100 leader-board, bouncing back a bit after taking a hammering on Friday following results that failed to meet recently lowered expectations.

The stock is in danger of being ejected from the FTSE 100 but that has not stopped Credit Suisse from nudging up its price target to 535p from 533p.

Away from the blue-chips, Plant Health Care PLC (LON:PHC) has lost more than a third of its value at 9.2p after a placing and share subscription.

As discounted share issues go, lobbing out stock at 8p a share when the shares closed at 14.25p on Friday is almost as bad as it gets.

Shareholders in estate agent Countrywide PLC (LON:CWD) know a thing or two about emergency over-a-barrel fundraisings and might have been expecting a bounce this morning from confirmation that the company is in merger talks with LSL Property Services PLC (LON:LSL).

No such luck. The shares are down 4.5% at 325p.

If it is any consolation, LSL shares are off 2.1%.

10.05am: Plummet airlines

Triple-digit falls for the Footsie are not as uncommon as they were but when the fall stretches beyond 200 points, that's unusual.

Panic selling has set in following the news over the weekend about a number of towns in Italy going into lock-down mode because of the spread of the coronavirus.

London's index of leading shares was down 236 points (3.2%) at 7,168, with travel stocks bearing the brunt of the assault on share prices.

“Fears over an escalation of the coronavirus outside of China have caused a major retreat in global markets and prompted wild swings in commodity prices,” remarked Russ Mould, AJ Bell's investment director.

“Italy’s lock-down, as the country tries to control the worst outbreak of the virus in Europe, has caused investors to panic about how business and society will be affected. A large spike in coronavirus cases in South Korea has also added to market concerns,” he added.

Airlines, travel companies, cruise operators and hotel groups have all been whacked; easyJet PLC (LON:EZJ), down 11.7%, is the hardest hit airline, TUI AG (LON:TUI), down 8.9%, is the package tour operator suffering the most while in the hotels sector InterContinental Hotels Group PLC (LON:IHG) is 5.6% lower.

Mining stocks are also getting it in the neck but a trio of FTSE 100 stocks have actually managed to make progress this morning, among them Bunzl PLC (LON:BNZL), which was up 3.7% after publishing its full-year results and unveiling two acquisitions.


 


 

FTSE 100 posts triple-digit loss amid coronavirus pandemic fears; 16% wiped off easyJet

The FTSE 100 plunged 155 points to 7,249.36 in early trade amid fears the coronavirus outbreak is quickly turning into a global pandemic.

There have now been around 2,600 fatalities in China, outbreaks 26 countries and real concerns over the spread of the flu-like illness in South Korea, Italy and Iran.

The World Health Organisation has warned there is only a small window to head off an international emergency.

“The coronavirus has made its biggest mark to date in Europe with a sudden rise in the number of cases in Italy,” said Jasper Lawler of London Capital Group.

“Any investors who has been thinking they could park their investments in the US or Europe to shield them from coronavirus concerns will have to think twice. And it would appear many are already doing so.”

Unsurprisingly, travel stocks came under the greatest pressure with easyJet (LON:EZJ) chopped by 16% in the early markdown. British Airways owner IAG (LON:IAG) lost 6.1% in the melee, while holiday group TUI (LON:TUI) was off 5.5%.

The miners also took a tonking, while high fashion group Burberry (LON:BRBY), which relies on Asia’s markets for growth, opened 4.5% lower.

Kodal Minerals PLC’s (LON:KOD) permit application for Bougouni lithium project has gone through the first technical meeting with the DNGM and is now proceeding to a ministerial commission meeting.

BATM Advanced Communications Ltd (LON:BVC) has been awarded a US$4mln cybersecurity contract from a long-standing government defence department customer. Total contracted revenue for the deal to date is now over US$18mln.

EQTEC PLC (LON:EQT) has signed a deal to upgrade an existing syngas research and development facility at the University of Extremadura in Spain. The installation of the new unit is expected to be completed in the third quarter of 2020.

Ethernity Networks Limited (LON:ENET) predicted that an upswing in 5G deployment will help it achieve “positive cash flow generation” in 2021. Revenues this year should be 20% ahead of the previous year while costs in the second half of the year had fallen by 5% compared to the first half.

Newcrest Mining Ltd (ASX:NCM) has updated investors on progress at the Havieron gold project in Australia, which it holds in partnership with Greatland Gold PLC (LON:GGP). Newcrest now has eight drill rigs in operation at Havieron, up from six rigs previously. The company is also considering constructing an exploration decline at Havieron by end of calendar year 2020.

LoopUp PLC (LON:LOOP), the conference call and remote meetings company, expects to report 2019 results “in line with market expectations” with revenues of £42.5mln, up from £34.2mln in 2018, and earnings (EBITDA) of £6.4mln compared to £7.7mln last year.

ADES International Holding PLC (LON:ADES) told investors that its revenues rose by around 132% in 2019. The oil and gas rig and equipment contractor, in a trading statement ahead of full year results, said that revenues for the year amounted to US$477.8mln versus US$205.6mln in the year before.

Anglo Pacific Group PLC (LON:APF)(TSE:APY) plans to focus on investing in commodities that support a more sustainable world, following an investment review.

This means that the company will not invest in any more thermal coal projects.

ADM Energy Plc (LON:ADME) has agreed a deal which will see it increase its stake in the OML 113 asset, which includes the Aje field offshore Nigeria.

The AIM-quoted firm is acquiring 25% of the interests, rights and obligations held by EER.

InnovaDerma PLC (LON:IDP) said has launched its hair removal line Nuthing, formulated with skincare benefits and to be vegan-friendly and cruelty-free. Chief executive Kieran Callan believes the products, which go on sale online on Wednesday (Feb 26) and will be stocked in all 800 Superdrug stores from March 11, could to shake the segment up.

The Ministry of Mineral resources in Greenland has confirmed that the Social Impact Assessment submitted by Bluejay Mining PLC (LON:JAY) for its Dundas ilmenite project is compliant with guidelines for the purposes of public consultation related to an exploitation licence. The assessment concluded that the construction and commencement of the ilmenite sand mine at Dundas will have a significantly positive effect on the livelihoods of the people of Greenland

Anglo Asian Mining PLC (LON:AAZ) has updated on the exploration work it's undertaking on projects in Azerbaijan. Positive exploration results were returned in the fourth quarter of 2019 on three contract areas, Gedabek, Gosha and Ordubad.

ReNeuron Group PLC (LON:RENE) said its cell therapy for a degenerative eye disease held onto sight improvements for as a long as a year after treatment. The update was provided alongside news the group had applied to the US regulator to add a further nine people to its phase I/IIa clinical study.

88 Energy Ltd (LON:88E) has shared a number of key facts with investors ahead of the hotly anticipated Charlie-1 well in Alaska. Rig and well teams mobilised earlier this month. Drilling is expected to start in “late February”. The well will be drilled down to a depth of 11,400 feet.

Westminster Group PLC (LON:WSG), the global supplier of managed services and technology-based security solutions, has reduced its financing costs by redeeming some loan notes. The company has redeemed £561,250 worth of its convertible secured loan notes (CSLNs).

6.21am: Shaky start predicted 

The FTSE 100 looks set for a shaky start amid warnings there is only a small window in which to avert a global coronavirus pandemic.

It follows an upsurge in cases outside China, the hub of the outbreak where the number of fatalities is closing in on 2,600. South Korea, Italy and Iran have each reported a spike in recorded episodes of the illness.

In fact, more than 1,200 cases of the virus have been confirmed in 26 countries and there have been eight deaths, the World Health Organisation reported over the weekend.

Its head, Dr Tedros Adhanom Ghebreyesus, said while the number of coronavirus cases outside China was "relatively small", the pattern of infection was worrying.

"We are concerned about the number of cases with no clear epidemiological link, such as travel history to or contact with a confirmed case," he added.

Concerns the outbreak may soon morph into a global pandemic sent Asia-traded Brent oil tumbling 2.4% to US$57.08 a barrel, while gold, a haven asset in times of panic nudged up 1% to US$1,663.90 an ounce.

A deluge of results and updates is expected in the week ahead, which kicks off later today with a trading statement from Associated British Foods (LON:ABF) and prelims from distribution firm Bunzl (LON:BNZL).

Business Headlines 

Financial Times

  • Barclays set to kick off hunt for next chief executive
  • Sunak bows to pressure on IR35 tax changes
  • Buyout group CVC steps up plans to reshape global rugby
  • Blackstone to invest in UK from $14bn Saudi-backed fund

Times

  • HS2 bid vital for Bombardier’s future - Derby train factory must win contract to secure its future, boss says
  • Buffett suffers worst year in decade after failing to find anything to buy
  • Meininger Hotels in £330m AIM float
  • The Restaurant Group to announce outlet closures this week

Telegraph

  • IMF warns Covid-19 threatens global economic recovery as markets brace for turbulent trading
  • A no-deal Brexit would leave the EU facing intense pressure to reform
  • Cadbury owner Mondelēz trials new plant-based Dairy Milk chocolate

Guardian

  • UK public spending to top £1tn a year, thinktank forecasts
  • Bank of England under pressure over board member's oil links

Monday’s Main Corporate News

Finals: Bunzl PLC (LON:BNZL), Ascential PLC (LON:ASCL), CC Japan Income & Growth Trust PLC (LON:CCJI), EasyHotel PLC (LON:EZH), Kosmos Energy Ltd (LON:KOS), Merian Chrysalis Investment Company (LON:MERI), Quartix Holdings plc (LON:QTX), Reach PLC (LON:RCH), RTC Group PLC (LON:RTC)

Interims: Finsbury Food Group PLC (LON:FIF), Dechra Pharmaceuticals PLC (LON:DPH), Tristel Plc (LON:TSTL)

Trading announcements: Associated British Foods PLC (LON:ABF)

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