22nd Jan 2020 11:53
(Alliance News) - London stocks were subdued Wednesday midday, despite having opened the session on stronger footing, as caution remains over the spread of coronavirus in Asia.
Weighing on the FTSE 100 at midday were TUI and Burberry, while Berkeley and Sage posted share price gains.
The FTSE 100 index was down 4.62 points, or 0.1%, at 7,606.08 Wednesday, having risen as high as 7,637.35 in morning trade.
The mid-cap FTSE 250 index was 25.96 points higher, up 0.1%, at 21,771.37 and the AIM All-Share index was up 0.5% at 967.08.
The Cboe UK 100 index was flat at 12,886.46. The Cboe 250 was up 0.1% at 19,630.15, and the Cboe Small Companies broadly unchanged at 12,393.28.
In mainland Europe, the CAC 40 in Paris was down 0.1% while the DAX 30 in Frankfurt was flat early Wednesday afternoon. The DAX had hit a record hit of 13,640.06 in morning trade, though slipped back as the session progressed.
In the US, stocks are poised to recover with the Dow Jones seen up 0.3%, the S&P 500 up 0.4% and the Nasdaq called 0.6% higher.
European stocks had bounced early Wednesday after falling in the previous session on fears over the spread of a new strain of coronavirus in Asia. However, caution crept in as Wednesday's session progressed.
"The Chinese government's response to the health situation seems to be more upfront than their handling of the SARS crisis, so traders aren't as fearful," said David Madden at CMC Markets.
He added, however: "Huge numbers of people are expected to be on the move during the Lunar New Year holiday, so the situation could worsen, and that is why some traders aren't overly bullish this morning."
The World Health Organization will hold an emergency meeting Wednesday to determine whether to declare a rare global public health emergency over the disease, which has now been detected in the US, Taiwan, Thailand, Japan, South Korea and Macau.
A prominent expert from China's National Health Commission confirmed this week that the virus can be passed between people. However, animals are suspected to be the primary source of the outbreak.
In forex, sterling was quoted at USD1.3088 Wednesday midday, versus USD1.3045 late Tuesday.
The euro was stood at USD1.1083 on Wednesday, soft compared to USD1.1096 late Tuesday. Against the yen, the dollar was unchanged at JPY109.97.
In commodities, gold was quoted at USD1,557.95 on Wednesday, flat on USD1,557.30 on Tuesday. Brent was at USD64.16, down from USD64.72 late Tuesday.
In London, Berkeley was leading the way in the FTSE 100, up 5.1% on plans to boost shareholder returns over the next two years.
The FTSE 100 housebuilder's existing programme was for returns of GBP125 million to be made by March 31, 2020, and GBP280 million in each of the following financial years up to September 30, 2025.
However, Berkeley's new plan is to return GBP500 million through a B share scheme in March 2020, and a further GBP500 million to shareholders through a C share scheme in March 2021.
Following the GBP1 billion return, Berkeley intends to revert to annual returns of GBP280 million, by making payments of GBP140 million every six months, up to and including September 30, 2025.
Sage Group was up 5.0% after the accounting software firm reported recurring revenue growth of 11%.
This, it said, was underpinned by software subscription growth of 25% to GBP286 million. Recurring revenue growth was "principally" driven by the North America and Northern Europe segments, Sage continued, with strong momentum in its financial year ended September continuing.
Travel operator TUI, meanwhile, shed 4.6% after Stifel cut the stock to Hold from Buy.
Burberry was down 2.3% despite raising its full-year sales outlook.
In the period to December 28, retail sales rose 1.1% year-on-year to GBP719 million from GBP711 million, or by 2% at constant currency. On a like-for-like basis, sales climbed 3% during the period, building on a year before when they grew by 1%.
The company, famed for its checked print and trench coats, said the revenue increase was due to a rise in full-price sales, which ultimately offset disruptions from civil unrest in Hong Kong. In its Asia Pacific unit, sales rose by a low-single digit, Burberry said, with mainland China up in the "mid-teens" while Hong Kong sales halved.
Russ Mould at AJ Bell commented: "The strong run the shares have enjoyed in recent months may have prompted some profit taking and the reminder of how closely the company's fortunes are tied to China may have provoked some nervousness given the deadly virus which is currently afflicting the country."
WH Smith slipped 2.2% as the retailer reported a "good" recent performance, boosted by its travel arm while its high street operations lagged.
The FTSE 250 books and stationery retailer delivered revenue growth of 7% in the 20 weeks to January 18, with like-for-like revenue falling by 1%.
Swindon-headquartered WH Smith achieved 19% revenue growth in its Travel business, which was driven by the acquisitions of Marshall Retail Group and InMotion. Like-for-like sales in the unit were up 3%.
High Street revenue fell by 5% on both a reported and like-for-like basis, meanwhile.
Ted Baker slumped 6.7%. The troubled retailer reported that an auditor's review found it had overstated the value of its year-end inventory by more than GBP50 million.
The probe, fronted by Deloitte, found that the value of its stock at January 26, 2019, was overstated by GBP58 million. Ted Baker added this is "materially higher" than its December estimate of an overstatement between GBP20 million and GBP25 million.
By Lucy Heming; [email protected]
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Related Shares:
BurberryWh SmithBerkeley GroupSage GroupTED.LTUI.L