FTSE steadies after touching year-low on virus fears

Wed, 26th Feb 2020

After dropping 2% at one stage and hitting a year-low on fears of a coronavirus pandemic, UK stocks recovered some of their poise in late morning trading on Wednesday. By midday the benchmark FTSE 100 index was down just 42 points or 0.6% to 6,976, with strength in financial and pharmaceutical stocks helping to stem the tide of selling. Shares in Asia-focused banks HSBC and Standard Chartered were among the gainers, as was healthcare heavyweight GlaxoSmithKline. Engineering group Weir jumped 6.6% to £13.33 as investors cheered a better outlook for its mining unit, even as it posted a deep group loss due to write-downs in its US oil and gas business. Security services company Serco was also a gainer, rising 1.7% to 153.3p, after it booked an 8.9% rise in annual profit and reinstated its long-suspended dividend. Mining company Rio Tinto added 0.1% to £39.19 despite booking a 41% fall in annual profit and warning that the coronavirus outbreak could have a short-term impact on supply chains. Rio's income for the year through December fell to $8.01bn from $13.6bn the previous year, partly due to writedowns on its Oyu Tolgoi project in Mongolia and Yarwun alumina refinery in Australia. Spirits producer Diageo dropped 1.7% to £29.09 after it warned the coronavirus would wipe between £140m to £200m off operating profits in the 2020 financial year. Shares in gambling company William Hill shed 1.5% to 174p after it booked a second consecutive annual loss, following the introduction of a £2 stake limit on fixed-odds betting terminals in the UK. Waste management businesses Augean shed 1.2% to 214.5p as it too booked an annual loss, on the back of legal costs as the company disputed an outstanding UK landfill tax. House builder Taylor Wimpey, which earlier in the session had bucked the wider market fall, gave up 3.4% to 211.5p after it reported a 3.1% rise in annual profit. Taylor Wimpey completed 5% more homes, though its underlying performance was hurt by higher building costs. Travel location convenience store group SSP reversed 4.8% to 568p on warning that the coronavirus outbreak had taken a £5m chunk out of its operating profit in February alone, as footfall plunged at airports across Asia. Wagamama and Garfunkels owner Restaurant Group fell 5% to 111.5p as it swung to a full-year loss after it wrote down the value of its assets, citing a 'chronic overcapacity' in the casual dining sector and higher labour costs. Logistics company Eddie Stobart Logistics crashed 93% to 5p, having reported a sharp increase in half-yearly losses as higher revenues were offset by a £169m write-down as it tried to move past a damaging accounting scandal. Story provided by StockMarketWire.com

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