13th Feb 2020 11:52
(Alliance News) - London share prices were deep in the red at midday on Thursday, pushed lower by coronavirus fears following a surge in new cases, with the FTSE 100 additionally knocked back by poorly received earnings from British Gas parent Centrica.
London's blue-chip index was down 95.39 points, or 1.3%, at 7,438.98 Thursday midday. The mid-cap FTSE 250 index was down 195.62 points, or 0.9%, at 21,597.86. The AIM All-Share index was down 0.6% at 963.51.
The Cboe UK 100 index was down 1.7% at 12,545.75. The Cboe 250 was down 0.8% at 19,475.37, and the Cboe Small Companies down 0.3% at 12,448.06.
In mainland Europe, the CAC 40 in Paris was down 1.2% while the DAX 30 in Frankfurt was 1.0% lower on Thursday.
China's official death toll from the new coronavirus spiked dramatically on Thursday after authorities changed their counting methods, fuelling concern the epidemic is far worse than being reported.
In Hubei and its capital Wuhan, where tens of millions of people are trapped as part of an unprecedented quarantine effort, 242 new deaths were reported on Thursday. Another 14,840 people were confirmed to be infected in Hubei alone, with the new cases and deaths by far the biggest one-day increases since the crisis began.
Outside Hubei, there were 12 more deaths but the number of new cases fell for a ninth day in a row, with 312 extra patients.
Hubei authorities said the increases were because they had broadened their definition for infection to include people "clinically diagnosed" via lung imaging. Up until now, they had been documenting cases using a more sophisticated laboratory test.
Health officials said they looked into past suspected cases and revised their diagnoses, suggesting older cases were also included in Thursday's numbers.
"The new charts of infection rates look much more worrying, and have certainly dealt a blow to the narrative that things were beginning to improve, putting the gains of the past few days in doubt," said Chris Beauchamp, chief market analyst at IG.
In Europe, the World Mobile Congress in Spain was cancelled after major exhibitors pulled out as a precaution against the virus outbreak.
Safe haven assets continued to trader higher on Thursday amid the risk-off mood.
Gold was quoted at USD1,574.90 an ounce on Thursday, up from USD1,566.10 on Wednesday. Against the yen, the dollar was quoted at JPY109.66, down from JPY110.00.
Elsewhere in forex, sterling was quoted at USD1.2983 on Thursday, firm on USD1.2975 at the London equities close on Wednesday. The euro traded at USD1.0869, lower than USD1.0894 late Wednesday.
The European Commission maintained its eurozone growth forecast at 1.2% for 2020 and 2021, but warned Brexit and the new coronavirus outbreak could yet hit the economy.
For the broader EU, including countries outside the single currency, it forecast growth of 1.4% this year, down from the previous prediction of 1.5%.
"The outbreak of the '2019-nCoV' coronavirus, with its implications for public health, economic activity and trade, especially in China, is a new downside risk," the commission said.
While gold was higher on Thursday in the wake of the sharp increase in coronavirus cases, oil was soft. Brent was trading at USD55.20 a barrel at midday, versus USD55.55 late Wednesday.
"The oil rebound didn't last long, with crude prices heading south as it became apparent that the [coronavirus] numbers are even worse than thought. Perhaps the corner isn't being turned after all which is bad news for oil prices that have already been pummeled as the virus has spread rapidly," said Craig Erlam at Oanda.
In New York, stocks were pointed to a lower open with the Dow Jones pointed down 0.7%, the S&P 500 down 0.7% as well as the Nasdaq called 0.9% lower.
Equities in London were sharply lower on Thursday, with Centrica dragging down the FTSE 100. Shares in the British Gas parent plummeted 16% after swinging to a full-year loss.
"Centrica is a turnaround story still in its infancy, and the company’s full results show there is a long way to go before the utility company is in a better shape for the next phase of its life," said Russ Mould, investment director at AJ Bell.
Revenue slipped 2.0% to GBP26.83 billion in 2019 from GBP27.38 billion in 2018. Centrica swung to a pretax loss of GBP1.75 billion from a GBP575 pretax profit the year before.
In 2019, the company booked GBP1.10 billion in net exceptional costs, compared to just GBP185 million in 2018. The one-offs were mainly due to impairments, with Centrica reporting GBP476 million of such one-off costs related to its exploration & production assets, attributed to falling "near-term prices and long-term price forecasts".
Also lower was Barclays, down 2.9%. The lender reported a sharp rise in annual profit on significantly lower costs and backed Chief Executive Jes Staley despite his relationship with Jeffrey Esptein.
In 2019, Barclays recorded pretax profit of GBP4.36 billion, 25% higher than the GBP3.49 billion seen in 2018. Excluding litigation costs, pretax profit was GBP6.21 billion, up 9% year-on-year.
Barclays separately said CEO Staley is being unanimously recommended for re-election at the bank's annual general meeting, having been judged to have been "sufficiently transparent" about the nature of his relationship with Jeffrey Epstein.
US financier Epstein killed himself in a New York jail in August while awaiting trial on sex-trafficking charges.
Barclays also noted the relationship between Staley and Epstein was the subject of a UK Financial Conduct Authority enquiry. The probe is into "Staley's characterisation to the company of his relationship with Mr Epstein and the subsequent description of that relationship in the company's response to the FCA".
Peer Royal Bank of Scotland reports 2019 results on Friday. RBS shares were down 1.2% midday Thursday.
It was a better session for Coca-Cola HBC, which rose 2.9% after the soft-drinks bottler reported full-year forex-neutral revenue growth of 4.4%, with growth in the fourth quarter alone 7.4%.
Comparable earnings before interest and tax were up 12% to EUR758.7 million, a record high, the company said. Pretax profit rose 8.2% to EUR661.2 million, compared to EUR610.9 million in 2018.
Meanwhile, shares in peer Coca-Cola European Partners were up 1.9% after also reporting profit growth in 2019.
Revenue rose 4.5% to EUR12.02 billion in 2019 from EUR11.52 billion a year ago, reflecting solid execution & innovation-led growth, it said. Pretax profit rose to EUR1.45 billion from EUR1.21 billion, meanwhile operating profit was EUR1.55 billion compared to EUR1.30 billion in 2018.
Coca-Cola European Partners operates in western Europe, including France, Germany and the UK. Coca-Cola HBC operates in other parts of Europe, such as Ireland, eastern Europe and Italy, as well as in Nigeria, west Africa.
Bank of Georgia, shares up 5.8%, edged its full-year payout higher amid growth in net interest income and profit.
In 2019, net interest income was 6.7% higher at GEL789.4 million, about GBP211.7 million, from GEL739.6 million in 2018. Pretax profit surged 27% to GEL556.4 million from GEL437.5 million.
There was also 13% growth in assets under management at the year-end to GEL2.57 billion from GEL2.27 billion. Quarter-on-quarter, assets under management were 0.8% higher.
To come in the economic calendar on Thursday is US inflation at 1330 GMT.
FXStreet consensus sees consumer prices rising 2.4% year-on-year in January, faster than the 2.3% rise registered the month before. Month-on-month, the rate is seen steady at 0.2%.
By Lucy Heming; [email protected]
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