|CATEGORY: MARKET REPORT - MIDDAY
Tue 28 Jan 2020
LONDON (SHARECAST) - (Sharecast News) - London stocks had pared gains by midday on Tuesday as concerns about the coronavirus continued to dent sentiment.
The FTSE 100 was up 0.2% at 7,424.40.
With more than 4,500 confirmed cases of the virus and the death toll rising to 106 over the past week, the potential global impact of the outbreak was keeping investors on edge.
Oanda analyst Craig Erlam said: "The numbers are getting uglier by the day, even as extensive efforts are made to contain the virus in China. At this stage, it's still extremely difficult to say just how bad it's going to get which makes anticipating the market reaction all the more challenging.
"Stocks have already taken a beating, particularly those most exposed to the Chinese economy which will, in all likelihood, suffer as a result of this outbreak. And the worst is unlikely to be behind them, even as they squeeze out small gains in early trade today. This is more a reflection of the pain suffered on Monday, than anything else."
As far as the impact on China's economic growth is concerned, Freya Beamish, chief Asia economist at Pantheon Macroeconomics, said the country's true real GDP could be flat or even fall quarter-on-quarter in the first quarter due to efforts to contain the spread of the coronavirus, shutdowns and fearful consumers.
"The bottom line here is that China could even see a contraction in quarterly real GDP growth in Q1, in reality, depending on the timing of factory closures and how long it takes to contain the virus," she said. "We are assuming that missed spending will be recouped in Q2, leading to a bumper quarter, though it's very possible that some of the expenditure on services around the holiday simply will be lost.
"This means the overall economy may not bounce back in the same way as in 2003. In short, you can make up for factory shutdowns by increasing over time, but making up spending for a lost holiday is more complicated. And the containment measures could go on for longer than in our baseline assumption."
In equity markets, Irn-Bru maker AG Barr fizzed to the top of the FTSE 250 as it said full-year adjusted profit before tax was expected to be at the top end of current market expectations, just ahead of £37m.
Retirement housebuilder McCarthy & Stone was on the front foot even as it reported a drop in full-year pre-tax profit, while Crest Nicholson also advanced despite posting a fall in annual profit.
On the downside, luxury fashion brand Burberry - which has large exposure to China - was trading lower again, while IAG was also back in the red, both hit by concerns about the coronavirus.
Business-to-business information services provider Euromoney lost ground after a trading update.
Drinks maker Diageo was knocked lower by a downgrade to 'underweight' at JPMorgan, while Avast retreated after an initiation at 'sell' by Peel Hunt and Victrex fell after a downgrade to 'reduce' at HSBC.
FTSE 100 (UKX) 7,424.40 0.17%
FTSE 250 (MCX) 21,290.86 -0.06%
techMARK (TASX) 4,185.89 -0.16%
FTSE 100 - Risers
NMC Health (NMC) 1,390.00p 2.21%
Hargreaves Lansdown (HL.) 1,835.00p 2.00%
Kingfisher (KGF) 206.40p 1.93%
Glencore (GLEN) 225.65p 1.92%
Whitbread (WTB) 4,310.00p 1.67%
Phoenix Group Holdings (PHNX) 755.10p 1.49%
Reckitt Benckiser Group (RB.) 6,220.00p 1.47%
Compass Group (CPG) 1,922.50p 1.21%
Evraz (EVR) 365.90p 1.16%
Unilever (ULVR) 4,479.50p 1.15%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,941.50p -2.85%
Diageo (DGE) 3,111.50p -2.54%
Spirax-Sarco Engineering (SPX) 8,690.00p -1.70%
Halma (HLMA) 2,113.00p -1.49%
Rightmove (RMV) 657.60p -1.26%
International Consolidated Airlines Group SA (CDI) (IAG) 579.80p -1.23%
Aveva Group (AVV) 4,928.00p -1.16%
CRH (CRH) 2,862.00p -1.11%
JD Sports Fashion (JD.) 820.20p -1.06%
Sage Group (SGE) 745.80p -0.98%
FTSE 250 - Risers
Barr (A.G.) (BAG) 613.00p 12.68%
Crest Nicholson Holdings (CRST) 458.40p 4.13%
Finablr (FIN) 94.00p 4.10%
Virgin Money UK (VMUK) 171.60p 3.72%
Centamin (DI) (CEY) 132.20p 2.96%
Tullow Oil (TLW) 51.96p 2.89%
Galliford Try (GFRD) 134.68p 2.70%
Hammerson (HMSO) 256.50p 2.56%
IntegraFin Holding (IHP) 490.00p 2.51%
Just Group (JUST) 73.75p 2.43%
FTSE 250 - Fallers
Euromoney Institutional Investor (ERM) 1,278.00p -4.48%
Avast (AVST) 509.50p -3.78%
NextEnergy Solar Fund Limited Red (NESF) 118.25p -2.67%
The Renewables Infrastructure Group Limited (TRIG) 128.20p -2.58%
Foresight Solar Fund Limited (FSFL) 117.00p -2.50%
Dunelm Group (DNLM) 1,123.00p -2.35%
Watches of Switzerland Group (WOSG) 365.20p -2.14%
Softcat (SCT) 1,203.00p -2.12%
Serco Group (SRP) 163.60p -2.09%
Frasers Group (FRAS) 485.40p -2.06%