London close: Stocks slip after Apple warns of coronavirus impact

Tue 18 Feb 2020

LONDON (SHARECAST) - (Sharecast News) - London stocks fell further into the red on Tuesday, as a revenue warning from tech giant Apple sparked concerns about the impact of the coronavirus outbreak and the pound strengthened.
The FTSE 100 was down 0.69% at 7,382.01.

Sentiment took a hit after Apple warned overnight that it will not meet its revenue guidance for the current quarter due to disruption from the coronavirus outbreak.

Chris Beauchamp, chief market analyst at IG, said: "A warning from Apple has put the cat among the pigeons and provided the first real evidence that the coronavirus will have ramifications beyond China. Markets had been rubbing along in expectation that stimulus from China would smooth over any bumps in the road. But Apple's warning upends those forecasts and suggests that we will see other companies reporting warnings."

On home shores, sterling was up 0.26% against the US dollar at 1.2034 after data from the Office for National Statistics showed that employment rose to a record high in the fourth quarter of 2019 but wage growth slowed.

The employment rate for the three months to the end of December rose 0.6 percentage point from a year earlier to reach a new peak of 76.5%. Unemployment fell 0.2 point to 3.8%, in line with expectations.

However, earnings growth slowed to 2.9% from 3.2%, meaning annual growth in total pay was 1.4% adjusted for inflation. Regular earnings have now risen above the level before the financial crisis of 2008.

Capital Economics said: "The larger-than-expected rise in employment in December suggests that the labour market joined the rest of the economy in turning a corner at the end of last year. However, pay growth is softening, which suggests that there may be more slack in the market than implied by the low rate of unemployment."

In equity markets, HSBC was under the cosh after saying it would cut about 35,000 jobs in a radical business overhaul, as the bank reported a one-third fall in annual profit and wrote down more than $7bn (?5.4bn) of assets.

Glencore was on the back foot after saying it swung to a net loss of $404m from a profit of $3.41bn in 2018, as it took a hit from $2.8bn of impairment charges. Adjusted earnings before interest, tax, depreciation and amortisation fell 26% to $11.6bn, but this was still ahead of analysts' expectations of $11.06bn.

Miners were under the cosh more broadly amid worries about the coronavirus, with BHP, Antofagasta and Anglo American all down, while Russian steelmaker Evraz also fell.

BHP retreated as it said first-half earnings surged 29% on the back of higher iron ore prices as the dividend payout was tempered by short term caution over the coronavirus.

On the upside, InterContinental Hotels reversed earlier losses to trade up as its full-year results were in line with consensus expectations but revenue per available room remained weak.

United Utilities and Severn Trent got a boost at JPMorgan said it was upgrading its UK water estimates. The bank upgraded Severn to 'neutral' from 'underweight' and maintained its preference for overweight-rated UU. JPM said it sees "sector valuations continuing to benefit from improved cash flow profile, dividend security and M&A speculation".

Market Movers

FTSE 100 (UKX) 7,382.01 -0.69%
FTSE 250 (MCX) 21,678.46 -0.68%
techMARK (TASX) 4,128.07 0.27%

FTSE 100 - Risers

NMC Health (NMC) 844.20p 5.53%
Vodafone Group (VOD) 155.30p 2.77%
United Utilities Group (UU.) 1,036.50p 2.57%
InterContinental Hotels Group (IHG) 4,929.00p 2.06%
Hikma Pharmaceuticals (HIK) 1,920.00p 1.99%
AstraZeneca (AZN) 7,521.00p 1.95%
SEGRO (SGRO) 924.00p 1.92%
Polymetal International (POLY) 1,291.00p 1.90%
Centrica (CNA) 73.48p 1.40%
BT Group (BT.A) 154.98p 1.35%

FTSE 100 - Fallers

HSBC Holdings (HSBA) 551.90p -6.57%
Glencore (GLEN) 226.10p -4.46%
Auto Trader Group (AUTO) 577.00p -4.28%
Antofagasta (ANTO) 848.60p -3.26%
Smurfit Kappa Group (SKG) 2,784.00p -3.00%
TUI AG Reg Shs (DI) (TUI) 855.20p -2.82%
Evraz (EVR) 377.20p -2.81%
Ocado Group (OCDO) 1,126.00p -2.63%
Smith (DS) (SMDS) 349.20p -2.62%
ITV (ITV) 132.20p -2.51%

FTSE 250 - Risers

Future (FUTR) 1,346.00p 4.18%
PureTech Health (PRTC) 332.00p 3.75%
Fresnillo (FRES) 688.00p 3.40%
Syncona Limited NPV (SYNC) 245.50p 3.15%
FirstGroup (FGP) 133.70p 2.61%
Centamin (DI) (CEY) 136.80p 2.51%
Polypipe Group (PLP) 611.00p 1.75%
Spirent Communications (SPT) 251.00p 1.63%
Sirius Minerals (SXX) 5.10p 1.49%
IntegraFin Holding (IHP) 520.00p 1.36%

FTSE 250 - Fallers

Vesuvius (VSVS) 438.00p -5.97%
Jupiter Fund Management (JUP) 390.10p -5.13%
Finablr (FIN) 75.10p -4.63%
Weir Group (WEIR) 1,344.00p -4.55%
Aston Martin Lagonda Global Holdings (AML) 430.60p -4.37%
Micro Focus International (MCRO) 786.30p -4.17%
Tullow Oil (TLW) 42.59p -3.45%
Morgan Advanced Materials (MGAM) 298.80p -3.43%
Hammerson (HMSO) 226.90p -3.41%
Wood Group (John) (WG.) 399.30p -3.39%
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