FTSE gives up 5% as global markets retreat

Fri, 27th Mar 2020

UK stocks dropped sharply at the open on Friday, after three days of back-to-back gains for global stock markets, and ended the day at towards their session lows as overseas markets went into reverse. By the closze the FTSE 100 index was down 5.2% to 5,510 points with every sector in the red except for healthcare equipment and services. The biggest losers were cruise-ship operator Carnival down 20% to £9.62, B&Q store-owner Kingfisher down 15% to 144p, and athleticswear retailer JD Sports down 14% to 444p. MORE DIVIDEND CUTS As well as concerns over the continued rise of coronavirus cases around the world, investors were confronted with another swathe of dividends cancellations from UK companies. Gambling firm Flutter Entertainment was another heavy loser, down 11% to £65.92 on announcing that it would pay its 2019 dividend in shares and cancel a pro-rated payout related to its takeover of Stars Group. Wealth manager Standard Life Aberdeen was close behind, slipping 9.5% to 234p, despite it pocketing 21.86bn Indian rupees (£237m) by selling a further stake in Indian insurer HDFC Life. Power utility SSE also slumped 9.5%, to £12.61, having warned that annual earnings would be at the lower end of its guidance range, even before including any impact from the coronavirus crisis. SSE did share the positive news that it was keeping its dividend plans intact, but it warned that future pay-outs were under review. Aerospace and defence contractor Meggitt fell 8.2%, to 310p, as it withdrew its planned final dividend payment of 11.95p per share after having reassessed the impact of coronavirus on its business. House builder Redrow lost 8.8% to 367p after it decided to close all of its building sites and offices. Redrow also said it was talking to its lenders about accessing more credit. Healthcare services group Mediclinic International fell 4.5% to 298p, even as it announced the appointment of former Lloyds of London chief executive Inga Beale as its new chairman. Subprime lender Provident Financial was a heavy faller, dropping 13% to 220p after it scrapped its 2019 financial dividend, while predicting its credit issued and collections performance would be adversely impacted by the virus. Landscape products group Marshalls slid 11% to 565p, having cancelled its final dividend for 2019 together with a planned supplementary pay-out. Property portal Rightmove reversed 3.9% to 470p as it cancelled its final dividend and withdrew its financial guidance as the UK housing market looked set to go back into 'hibernation' due to the shut-down. Domino's Pizza sagged 1.8% to 275p, having cancelled its dividend despite seeing a surge in takeover orders as people hunkered down at home in self-isolation. Clothing retailer Next recovered after heavy earlier losees to close down just 0.3% at £44.93 after it closed its online, warehousing and distribution operations following increasing concern among its staff at having to continue working. In its full year results last week, Next revealed that online sales grew by nearly 12% last year and accounted for almost half of total revenues while in-store sales continued to shrink. Story provided by StockMarketWire.com

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