20th Mar 2020 17:13
(Alliance News) - Stocks in London ended mixed on Friday, with the FTSE 100 underperforming European peers as coronavirus fears continued to haunt investors amid a faster pace of infections.
As the UK continues to fight the coronavirus outbreak sweeping the globe, a total lockdown has not been ruled out. The number of cases across the UK jumped beyond the 3,200 mark as the National Health Service amnnounced 39 more patients died.
The FTSE 100 index closed up 4.72 points, or 0.1%, at 5,156.33, but ended the week down 1.4%.
The FTSE 250 ended down 614.35 points, or 4.8%, at 13,444.05, ending the week down 14%. The AIM All-Share closed up 31.95 points, or 5.4%, at 621.85, and ended the week down 15%.
The Cboe UK 100 ended down 0.4% at 8,734.53, the Cboe UK 250 closed up 3.9% at 11,703.05, and the Cboe Small Companies ended up 3.3% at 7,616.06.
In Paris the CAC 40 ended up 4.7%, while the DAX 30 in Frankfurt ended up 3.2%.
"As the week winds down in Europe markets are finishing well up on the lows of the week, but off the highs of the day. Risk assets have done well to hold the line over the past 48 hours, but as the weekend looms the usual concerns remain. It has been a remarkable few days in terms of volatility and with respect to central bank action, which has been taken back to levels not seen since the height of the financial crisis," said IG Group's Chris Beauchamp.
"But the problems that have dogged equity markets for weeks have not gone away, namely the steady spread of the virus and the dire corporate updates coming out from around the globe. Set against this, the sudden rise in stocks since Wednesday seems odd to say the least, and might not last once trading resumes next week. Equity markets are forward looking, and this crisis will end, but there seems to be an awful lot of wishful thinking going on to justify the rally over the second half of the week," Beauchamp added.
In the FTSE 100, Carnival closed up 17% despite the cruise line operator swinging to a first-quarter loss, with earnings dented by disruption due to the early days of the current Covid-19 pandemic.
The company recorded a GAAP net loss of USD781 million, or USD1.14 per share, for the quarter ended February 29. This compares to net income of USD336 million, or earnings per share of USD0.48, for the first quarter a year ago.
The damage caused by Covid-19 on the first quarter's net loss was around USD0.23 per share, the firm said, taking into account cancelled voyages and disruptions.
Revenue for the quarter increased 2.1% to USD4.8 billion from USD4.7 billion a year ago.
InterContinental Hotels Group ended up 15% despite the Holiday Inn and Crowne Plaza owner saying demand is currently at the lowest level it has ever seen.
To combat this, IHG is hoping to save about USD150 million through salary cuts, including "substantial" reduction in salary and incentives from its board and executive committee. Also, IHG will pull its final dividend of 85.9 US cents - saving about USD150 million - and said it will delay any further dividends until "visibility has improved".
Turning to trading, IHG said its global revenue per available room was down 6% in January and February, with a flat performance in the US being offset by a catastrophic drop in Greater China. In February, RevPAR in Greater China was down 90% year on year.
"InterContinental Hotels was one of the top FTSE 100 risers despite being one of a number of companies to suspend its dividend. Its guidance on recent trading is pretty apocalyptic but that had already been priced in by the market," AJ Bell's Russ Mould said.
At the other end of the large cap index, Rightmove ended down 11% after the property portal said it expects 2020 revenue to be reduced as a result of discounts to be offered to its Agency, New Homes and Commercial customers from April.
Rightmove said the discounts will reduce 2020 revenue by between GBP65 million to GBP75 million. For 2019, the company posted pretax profit of GBP213.6 million on revenue of GBP289.3 million.
In the FTSE 250, Future ended the best performer, up 37% after the magazine publisher said declines in its travel magazine portfolio have been offset by its grocery titles, resulting in "strong" digital audience numbers. "The period started well with exceptionally strong digital audience numbers with the resultant beneficial flow through to eCommerce and digital advertising," Future said.
As a result, the company expects its results for the six months to the end of March to be in line with internal expectations.
"The recent weeks have been unprecedented. However, our business has continued to trade robustly, with the diversified strategy working well. As of today, we have seen limited impact on our digital revenues," Future said. Despite the "robust" trading, Future said it is implementing some profit protection measures.
The pound was quoted at USD1.1745 at the London equities close, up from USD1.1665 at the close Thursday, as UK Chancellor of the Exchequer Rishi Sunak plans to announce more emergency measures for workers.
Sunak has been under pressure from Labour, unions and even senior Conservative MPs to do more to help workers and the stalling economy weather the storm.
The chancellor is expected to reveal new measures late on Friday at the daily Covid-19 press conference in Downing Street, alongside Prime Minister Boris Johnson.
During the address, Johnson called on establishments like bars, restaurants and nightclubs to shut their doors, as the country bids to temper the spread of the virus.
The move follows the Bank of England's second emergency interest rate cut on Thursday to help support the domestic economy.
Sunak's GBP350 billion support package earlier this week was focused on businesses, with little help for staff facing the prospect of being laid off and unable to pay bills.
The fresh measures could also aid in the fight to halt the spread of the virus itself, as workers with Covid-19 symptoms may not self-isolate if that means a financial blow.
"There is the inevitable hit to the economy and likely recession to come along but most important for the subsequent recovery is that people are in jobs and unemployment does not get out of hand. Monetary policy, which is a rather blunt instrument, is not likely to solve these acute issues on its own and will always work better with targeted policies such as those likely to be announced by the chancellor," analysts at the Share Centre said.
The euro stood at USD1.0700 at the European equities close, flat from USD1.0710 late Thursday, despite a report saying the German government is considering setting up a bailout fund of around EUR500 billion.
Germany is setting out emergency measures that could include state participation in bailed-out entities, sources told dpa on Friday.
Against the yen, the dollar was trading at JPY111.33, up from JPY110.06 late Thursday.
Stocks in New York were mixed at the London equities close as the economic toll from the outbreak continued to mount.
The DJIA was up 0.3%, the S&P 500 index down 0.4% and the Nasdaq Composite up 0.2%.
On Capitol Hill, Senate Republicans introduced a USD1 trillion emergency stimulus package, which includes a provision to give cash to individuals. However, there were signs of scepticism from some lawmakers, with some Republicans reportedly opposed to direct payments and some Democrats questioning bailouts to companies that could lay off workers.
California on Thursday directed its 40 million residents to stay at home, a landmark move by a major government in the US as officials move towards a shutdown of most non-essential economic activity to attempt to limit the virus's spread.
In New York, Governor Andrew Cuomo on Friday ordered non-essential businesses to close and banned all gatherings, in an escalation of attempts to contain the deadly coronavirus pandemic.
Brent oil was quoted at USD27.31 a barrel at the equities close, down from USD28.02 at the close Thursday.
Oil prices were given a boost overnight after Trump's directive to top up the Strategic Petroleum Reserve to its maximum capacity by buying a total of 77 million barrels from US producers, but has since given back gains.
Gold was quoted at USD1,488.90 an ounce at the London equities close, higher against USD1,477.90 late Thursday.
The economic events calendar on Monday has eurozone consumer confidence data at 1500 GMT.
UK corporate calendar has annual results from gaming and broadcasting-focused technology provider Quixant.
By Arvind Bhunjun; [email protected]
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