29th Jan 2020 17:02
(Alliance News) - Stocks in London ended slightly higher on Wednesday as investors continued to brush aside concerns about the spread of the deadly coronavirus in China.
Even as the death toll from the coronavirus climbed to over 130 in China, investors seemed reassured by the rapid response of authorities to contain the infection.
The FTSE 100 index closed up 2.88 points at 7,483.57. The FTSE 250 ended up 35.99 points, or 0.2%, at 21,468.99, and the AIM All-Share closed up 4.98 points, or 0.5% at 958.32.
The Cboe UK 100 ended up 0.1% at 12,691.31, the Cboe UK 250 closed up 0.2% at 19,415.91, and the Cboe Small Companies ended up 0.2% at 12,483.31.
In Paris the CAC 40 ended up 0.5%, while the DAX 30 in Frankfurt ended 0.2%.
"The trading session has been lacklustre as traders are only too aware of the deepening coronavirus situation, but sentiment hasn't moved a whole lot in either direction. If yesterday's positive move was down to a combination of short covering and bargain hunting, the muted session today might be a sign that buyers are running out of steam," said CMC Markets analyst David Madden.
In the FTSE 100, Whitbread closed up 2.8% after HSBC raised the Premier Inn hotel chain owner to Buy from Hold.
HSBC analysts said Whitbread's earnings are potentially on the cusp of inflection and pressure on revenue per available room may soon be easing.
In the FTSE 250, Quilter ended the best performer, up 8.9% after the Anglo-South African asset manager said it managed to generate net client cash inflow for all of 2019.
The financial services firm was spun out of Anglo-South African financial services firm Old Mutual in 2018. Net client cash inflow for 2019 as a whole was GBP300 million, a significant improvement over the net outflow of GBP200 million recorded in the nine months to September. However, this was still far below 2018's annual net client cash inflow figure of GBP4.7 billion.
At the other end of the midcap index, Stagecoach Group closed down 6.3% after HSBC downgraded the transport company to Reduce from Hold saying the company's reliance on its bus operations comes with heightened regulatory risks.
The pound was quoted at USD1.3003 at the London equities close, up from USD1.2993 at the close Tuesday, ahead of the Bank of England's interest rate decision on Thursday.
The BoE will announce its latest monetary policy decision, alongside the release of the Monetary Policy Committee meeting minutes and Monetary Policy Report, at midday.
Governor Mark Carney will host a press conference at 1230 GMT following the decision. This will be his last meeting as head of the central bank. The Canadian's replacement, Financial Conduct Authority head Andrew Bailey, will take up the role on March 16, just ahead of the BoE's March 26 meeting.
The Bank Rate currently is 0.75%. The CME's FedWatch tool shows that a cut to 0.50% is currently 48% priced in by markets, while retaining UK interest rates at their current levels is 52% priced in.
AJ Bell's Kevin Doran said: "While some mortgage borrowers might benefit from a rate cut, we all know that banks have a poor record of passing interest rate cuts on to cash-strapped home owners. On the other hand long suffering savers would likely see a cut to their rates and the value of their cash further eroded by inflation, even if this has been falling over recent months.
"An interest rate cut would further enhance the yield on offer from UK shares which sits at a hefty premium to anything that can be achieved via cash or Government bonds but much of this will already be priced in to equity valuations."
The euro stood at USD1.1000 at the European equities close, flat from USD1.1008 late Tuesday.
Against the yen, the dollar was trading at JPY109.07, marginally lower from JPY109.15 late Tuesday.
Stocks in New York were higher at the London equities close as positive news from major companies outweighed concerns about the spreading virus in China.
The DJIA was up 0.5%, the S&P 500 index up 0.3% and the Nasdaq Composite up 0.2%.
Apple was up 2.8% on Wall Street after the iPhone maker's profit and revenue for the October-December period, its financial first quarter, topped analysts' projections.
Boosted by the release of the iPhone 11 heading into the Christmas season, the iPhone product generated sales of USD56 billion, an 8% increase from the previous year's disappointing showing. Apple's division that includes its app store, product warranties, music streaming and Apple TV - a new streaming video service - delivered revenue of USD12.7 billion, up 17% from the previous year.
The ongoing grounding of Boeing Co's 737 MAX aircraft has pushed the aerospace firm into a loss, the company reported.
Boeing posted a loss per share of USD1.79 for the last quarter of 2019, after a USD5.93 profit the year before. Core earnings per share, a non-GAAP measure, was a USD2.33 loss from a USD5.48 profit.
Operating loss for the fourth quarter was USD2.20 billion after a USD4.18 billion profit, with the net loss USD1.01 billion from a USD3.42 billion profit year-on-year.
Chicago-based Boeing's annual net loss was USD636 million from a USD10.46 billion profit in 2018, while the operating loss was USD1.98 billion from a USD11.99 billion profit.
However, the stock was up 2.4% in New York.
Fast food giant McDonald's Corp posted its best like-for-like sales performance in over a decade in the fourth quarter, the firm said Wednesday.
Revenue for the quarter ended December was USD5.35 billion, 4% higher than the year before. On a like-for-like basis, growth was 5.9%, which McDonald's said showed broad-based strength. System-wide sales climbed 6%.
The stock was up 2.7% in New York.
Still to come in the US earnings calendar, social media platform Facebook, software firm Microsoft and electric carmaker Tesla report earnings after the market close Wednesday.
Ahead, the US Federal Reserve will announce its first interest rate decision of the decade at 1900 GMT, followed by a press conference with Chair Jerome Powell.
Federal Reserve policymakers opened their second day of deliberations on Wednesday and are expected to leave the key interest rate unchanged.
"In the wake of Apple's numbers last night, markets have shaken off an unsteady start and have begun to push higher. Investors continue to keep a nervous eye on China, but it looks like the beat on earnings from the tech giant has helped yesterday's optimism to persist into a new session. There will be plenty to monitor in this evening's FOMC statement, including trade wars, impeachment, China and even perhaps Brexit, but for now investors will probably just be glad of a Fed remaining vigilant but quiet for now," said IG Group's Chris Beauchamp.
Brent oil was quoted at USD59.94 a barrel at the London equities close, flat from USD59.92 at the close Tuesday.
Gold was quoted at USD1,569.44 an ounce at the London equities close, flat against USD1,569.90 late Tuesday.
The economic events calendar on Thursday has unemployment data and the eurozone at 0855 GMT and 1000 GMT respectively. In the afternoon, there are US GDP readings at 1330 GMT. Financial markets in China remain closed for the Lunar New Year holiday.
The UK corporate calendar on Thursday has annual results from oil major Royal Dutch Shell and consumer goods firm Unilever. There are also interim results from distiller Diageo and third-quarter results from telecommunications firm BT Group.
By Arvind Bhunjun; [email protected]
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