London close: Stocks close lower on coronavirus fears, Cabinet reshuffle

Thu 13 Feb 2020

LONDON (SHARECAST) - (Sharecast News) - London stocks finished in negative territory on Thursday amid renewed concerns about the coronavirus, and as investors also digested a Cabinet reshuffle.
The FTSE 100 ended the day down 1.09% at 7,452.03, and the FTSE 250 was 0.55% lower at 21,673.90.

At the same time, the pound was up 0.77% against the dollar at $1.3060 and gained 1% on the euro to last trade at €1.2038.

"Just as the markets seemed to break free of their coronavirus fears, an alarming spike in the number of deaths and new cases sent Europe lower," said Spreadex analyst Connor Campbell on the coronavirus concerns.

"Arguably the main driver of Wednesday's growth was the hopes that the outbreak in China was being contained.

"Well, changes to the way in which authorities calculate figures surrounding the illness revealed a worse situation than first thought, with a 242 person jump in the number of deaths and a 15,000 surge in total cases."

Understandably, Campbell said, that spooked investors.

On home shores, Sajid Javid resigned as UK finance minister after Prime Minister Boris Johnson demanded he sack his advisers as Downing Street sought to seize control of economic policy.

As what was meant to be a minor reshuffle on Thursday spiralled out of control, Javid was replaced by chief secretary to the Treasury Rishi Sunak.

A source told the UK's Press Association news agency: "[Javid] has turned down the job of chancellor of the exchequer."

"The prime minister said he had to fire all his special advisers and replace them with Number 10 special advisers to make it one team. The chancellor said no self-respecting minister would accept those terms."

At the same time, Johnson and his advisor Dominic Cummings took the opportunity to eliminate dissenters from the Cabinet, firing fired Andrea Leadsom as business secretary and the popular Julian Smith from the Northern Ireland portfolio in the reshuffle.

The hard-right Brexiter Leadsom was given her marching orders as Johnson undertook a mild shake-up of senior posts.

Her fellow hardliners, Housing minister Esther McVey and the Environment Secretary Theresa Villiers, were also shown the door.

The most controversial dismissal was that of Northern Ireland Secretary Julian Smith, widely regarded as one of the more competent occupants of the post in recent memory who delivered a restored parliament at Stormont after three years of stasis.

On the data front, the latest survey form the Royal Institution of Chartered Surveyors showed that house prices rose in January at the fast pace in nearly three years as December's election boosted sentiment.

The net balance of surveyors reporting that house prices had risen over the last three months increased to +17 in January from -2 in December, coming well above consensus expectations of +3.

"The latest survey results point to a continued improvement in market sentiment over the month, building on a noticeable pick-up in the immediate aftermath of the general election," said RICS chief economist Simon Rubinsohn.

"The rise in new sales instructions coming onto the market is a noteworthy and much needed development, given the lack of fresh listings over the past few years had pushed stock levels to record lows."

Rubinsohn said it remained to be seen how long the newfound market momentum would be sustained for, with political uncertainty possibly resurfacing towards the end of the year.

"But, at this point in time, contributors are optimistic regarding the outlook for activity over the next 12 months."

In equity markets, British Gas owner Centrica slumped 15.29% as it blamed the UK government's price cap, nuclear power station outages and lower gas prices for a 35% slump in annual profits.

Operating profits fell to ?901m from ?1.3bn while turnover fell 2% to ?26.8bn.

The UK's largest energy supplier reported a pre-tax loss of ?1.1bn compared with a profit of ?575m.

Food delivery service Just Eat was 3.51% weaker, even as it said it swung to a full year profit as increased scale offset higher investment in its Scoober business.

Gambling stocks William Hill, Playtech and GVC Holdings were all weaker following a Financial Times report that the industry regulator will consider limiting the amounts customers can bet online.

William Hill was down 7.68%, Playtech lost 7.38%, and GVC Holdings was 7% weaker.

On the upside, Coca-Cola HBC fizzed 3.59% higher after well-received full-year results.

Relx was ahead 1.62% as the provider of information-based analytics and decision tools reported a rise in full-year profit and revenue, hiked its dividend and announced the retirement of chairman Anthony Habgood.

In the year to the end of December, adjusted operating profit was up 6% to ?2.5bn, with revenue up 5% on an underlying basis to ?7.9bn.

Relx said the underlying growth rate reflected "good" growth in electronic and face-to-face revenues - which make up 91% of the total - and the further development of its analytics and decision tools, partially offset by continued print revenue declines.

Bank of Georgia was 11.6% firmer after it reported a rise in fourth quarter and full year profits, driven by growth in its retail business.

Pre-tax profit increased 32.8% year on year to GEL 172.05m (?46.5m) in the final quarter of 2019, while revenue increased by 1.05% year-on-year to GEL 208bn.

Full year pre-tax profit rose 22% to GEL 572.8M.

Lancashire Holdings gained 2.14% as it posted a jump in full-year profit and an improvement in its combined ratio.

In the year to the end of December, pre-tax profit rose to $119.5m from $33.6m the year before, while the combined ratio - which measures an insurer's profitability - improved to 80.9% from 92.2%.

Analysts had been expecting pre-tax profit of $76m and a combined ratio of 89.9%.

Domino's Pizza Group was 1.34% firmer after agreeing to sell its entire 71% stake in Domino's Norway to Pizza Holding AS and EYJA Fjarfestingafelag III EHF, the existing minority shareholders in the business.

Domino's will pay a cash outlay of ?7m and fund the Norwegian arm's losses until completion.

Market Movers

FTSE 100 (UKX) 7,452.03 -1.09%
FTSE 250 (MCX) 21,673.90 -0.55%
techMARK (TASX) 4,149.59 -0.59%

FTSE 100 - Risers

Coca-Cola HBC AG (CDI) (CCH) 2,883.00p 3.59%
Relx plc (REL) 2,072.00p 1.62%
Experian (EXPN) 2,799.00p 1.19%
Lloyds Banking Group (LLOY) 58.03p 1.03%
SSE (SSE) 1,639.00p 0.89%
Imperial Brands (IMB) 1,855.40p 0.89%
BAE Systems (BA.) 661.80p 0.88%
Aveva Group (AVV) 5,315.00p 0.85%
Whitbread (WTB) 4,797.00p 0.84%
Taylor Wimpey (TW.) 228.20p 0.62%

FTSE 100 - Fallers

Centrica (CNA) 71.82p -15.29%
Rolls-Royce Holdings (RR.) 667.40p -4.52%
Pearson (PSON) 559.00p -4.41%
NMC Health (NMC) 818.20p -4.21%
Royal Dutch Shell 'B' (RDSB) 1,947.20p -3.65%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,965.00p -3.51%
Royal Dutch Shell 'A' (RDSA) 1,941.20p -3.33%
Evraz (EVR) 391.60p -3.31%
Informa (INF) 758.20p -3.24%
Mondi (MNDI) 1,672.00p -3.04%

FTSE 250 - Risers

Bank of Georgia Group (BGEO) 1,812.00p 11.23%
TBC Bank Group (TBCG) 1,328.00p 7.27%
PureTech Health (PRTC) 326.00p 7.24%
IP Group (IPO) 71.80p 4.97%
Future (FUTR) 1,250.00p 4.34%
Trainline (TRN) 538.00p 4.26%
Fresnillo (FRES) 674.00p 4.21%
Rank Group (RNK) 324.00p 3.68%
Centamin (DI) (CEY) 136.40p 3.14%
Watches of Switzerland Group (WOSG) 382.00p 2.96%

FTSE 250 - Fallers

William Hill (WMH) 181.00p -7.68%
Playtech (PTEC) 340.00p -7.38%
GVC Holdings (GVC) 866.40p -7.00%
Babcock International Group (BAB) 510.60p -4.56%
Aston Martin Lagonda Global Holdings (AML) 440.20p -4.14%
Weir Group (WEIR) 1,387.50p -4.01%
Finablr (FIN) 83.25p -3.81%
Rotork (ROR) 308.50p -3.59%
Hyve Group (HYVE) 95.30p -3.54%
888 Holdings (888) 134.90p -3.44%
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