27th Mar 2020 17:14
(Alliance News) - Stocks in London ended firmly in the red on Friday, as the health crisis caused by Covid-19 worsened with UK Prime Minister Boris Johnson becoming the latest high-profile figure to be struck by the virus.
The FTSE 100 index closed down 305.40 points, or 5.3%, at 5,510.33, but ended the week up 6.7%.
The FTSE 250 ended down 610.91 points, or 4.0%, at 14,769.80, ending the week up 15%. The AIM All-Share closed down 14.56 points, or 2.2%, at 664.19, and ended the week up 13%.
The Cboe UK 100 ended down 4.8% at 9,322.14, the Cboe UK 250 closed down 3.8% at 12,785.49, and the Cboe Small Companies ended down 1.1% at 8,053.01.
In Paris the CAC 40 ended down 4.2%, while the DAX 30 in Frankfurt ended down 3.7%.
The UK has seen its biggest day-on-day rise in deaths since the Covid-19 outbreak began, as Prime Minister Johnson and Health Secretary Matt Hancock said they have tested positive for the virus.
As of Friday, a total of 759 people have now died in UK hospitals after being diagnosed with coronavirus, while 113,777 have tested positive, the Department of Health and Social Care said. Hundreds of thousands more people are thought to be infected.
Downing Street has previously confirmed that Foreign Secretary Dominic Raab would stand in for Johnson if the PM was too unwell to continue.
"Equity markets in Europe are sharply lower this afternoon as health concerns have taken centre stage again. The rising number cases in countries like the UK, Spain and Italy has chipped away at market confidence. The lack of a coordinated and robust response from the EU has left some traders worried too. Individual governments have revealed rescue plans recently, but without an overarching programme from the EU, there is a feeling there isn't a huge amount of solidarity doing the rounds," said CMC Markets analyst David Madden.
In the FTSE 100, Carnival ended the worst performer, down 21% after US President Donald Trump said he told cruise lines to incorporate themselves domestically if they want to access loans from a massive US stimulus package.
Carnival is listed in the UK as Carnival PLC and in the US as Carnival Corp. Its global headquarters is in Miami, but Carnival Corp is registered in Panama according to the articles of incorporation posted on its website.
The US Senate on Wednesday approved a USD2.2 trillion spending bill that sets aside USD500 billion for large corporations, but stipulates that money can only be given to firms "created or organised in the US". In New York, Carnival Corp shares were down 17%, having risen 14% on Thursday.
Flutter Entertainment closed down 12% after the bookmaker said it is no longer proposing to pay a pro-rated dividend immediately before its Stars Group merger and intends to pay out its final 2019 dividend in shares only.
On top of this, Flutter said it is suspending its dividend for 2020 due to "the impact of the current disruption caused by Covid-19 and the ambition for the combined group to de-lever".
Next closed down 11% after the clothing retailer was forced into a U-turn over its decision to keep warehouses open and ask workers to travel into stores for picking online orders.
The company now has shut its online operations, from Thursday evening, and has stopped taking orders. Next had faced sustained pressure from politicians and staff, who felt like they were being pressured into stores. On Wednesday, it was revealed that the company had offered a 20% pay rise to any worker willing to continue picking jumpers, socks and other clothes for customers.
Oil majors BP, Royal Dutch Shell 'A' and Shell 'B' closed down 9.4%, 9.3% and 10% respectively tracking spot oil prices lower.
Brent oil was quoted at USD25.03 a barrel at the equities close, sharply lower from USD27.06 at the close Thursday.
The North Sea benchmark sank to an intraday low of USD24.18 in afternoon trade - its lowest level in 17 years - owing to massive oversupply as the coronavirus crisis cripples global demand.
Higher amounts of crude is headed into stockpiles as the Saudi Arabia-Russia price war for market share that exacerbated the oil market crash this month shows no sign of slowing. The kingdom held firm on Friday, saying it hasn't had any contact with Moscow about output cuts or on enlarging the OPEC+ alliance of producers.
"The weakness is likely to persist for a while yet. Prices will only recover meaningfully if demand recovers when coronavirus cases fall across the globe and the lockdown is lifted, and/or the excessive supply is addressed. The latter can happen if US shale production slumps in response to collapsing prices, which is likely but will take time given the high level of existing inventories," TradingCandles analyst Fawad Razaqzada said.
The pound was quoted at USD1.2427 at the London equities close, up sharply from USD1.2132 at the close Thursday.
The greenback remained under pressure following a historic surge in initial jobless claims on Thursday and was unmoved by the latest US economic data release.
US personal spending rose slightly in February, according to figures from the Bureau of Economic Analysis on Friday.
The core personal consumption expenditures price index - the Federal Reserve's preferred gauge of inflation - rose to 1.8% on a yearly basis in February from 1.7% in January. The reading was higher than the market expectation of 1.7%.
On a monthly basis, core PCE rose to 0.2% in February, unchanged from January.
Oxford Economics said that despite solid income growth in February, US shoppers remained cautious with their outlays and opted to save more amid emerging coronavirus concerns.
"Looking ahead, social distancing measures taken in response to the fast-spreading coronavirus along with extreme financial market volatility will take a severe toll on the main engine of economic growth. We foresee real consumer spending declining mildly in the first quarter before contracting by the most on record in the second quarter," Oxford Economics said.
Against the yen, the dollar was trading at JPY108.07, down from JPY109.57 late Thursday.
The euro stood at USD1.1071 at the European equities close, up from USD1.1004 late Thursday.
Stocks in New York were lower at the London equities close amid a deteriorating economic outlook caused by the coronavirus pandemic, ending a historic week of gains with a whimper.
The US has become the country with the most coronavirus infections, as more than 83,000 people have tested positive, according to the Johns Hopkins University.
Stocks had received a boost during the week, as the US Senate crafted and approved a USD2.2 trillion relief package to help support the economy amid the coronavirus-induced economic shutdown.
On Friday afternoon, the DJIA was down 3.9%, the S&P 500 index down 3.3% and the Nasdaq Composite down 3.2%.
On Thursday, the Dow and S&P 500 registered their largest three-day win streaks since 1931 and 1933, respectively.
The bill now goes to the House of Representatives, where chamber leaders have also vowed to press for speedy approval, and President Donald Trump is expected to sign it later Friday.
US Treasury Secretary Steven Mnuchin on Friday pledged to quickly send out direct cash transfers, saying "Americans need that money now". However, there remains doubt about whether that can happen in the three weeks he has set as the timeframe.
Gold was quoted at USD1,626.20 an ounce at the London equities close, flat from USD1,627.35 late Thursday.
On Sunday at 0100 GMT, clocks will go forward one hour as the UK moves to British Summer Time.
The economic events calendar on Monday has UK mortgage approvals at 0930 BST and Germany inflation readings at 1300 BST.
The UK corporate calendar on Monday has a trading statement from water company Pennon Group.
By Arvind Bhunjun; [email protected]
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