25th Feb 2020 12:05
(Alliance News) -Â Despite opening higher on Tuesday, London stocks quickly slipped back into the red to extend the previous session's losses as fears remained heightened over the spread of coronavirus.
The FTSE 100 index was down 38.09 points, or 0.5%, at 7,118.74 on Tuesday at midday. The blue-chip index had closed down 3.3% on Monday.
The FTSE 250 was down 129.54 points, or 0.6%, at 20,988.33, and the AIM All-Share was down 0.4% at 939.29.
The Cboe UK 100 index was off 0.4% at 12,057.94. The Cboe UK 250 was down 0.8% at 18,900.64 and the Cboe UK Small Companies down 0.5% at 12,324.94.
In European equities, the CAC 40 in Paris was down 0.9% and the DAX 30 in Frankfurt down 0.8%.
"The coronavirus came back to bite investors yesterday, with the incredible 1,000-point decline in the Dow providing an insight into just how bad it could get if this virus is not contained. Stock markets are heading lower once again this morning, despite early attempts to bounce back," said Joshua Mahony, senior market analyst at IG.
"What was largely a Chinese issue to resolve has soon become an international problem, with European eyes transfixed on Italian efforts to curb the spread of the virus," said Mahony. "Fears over a potential coronavirus contagion throughout Europe is likely to provide substantial risk-off sentiment for days and weeks to come, with significant pressure on the Italians to stop this outbreak from spreading throughout the continent."
China reported 508 new cases and another 71 deaths on Tuesday, 68 of them in the central city of Wuhan, where the epidemic was first detected in December.
The updates bring mainland China's totals to 77,658 cases and 2,663 deaths, while South Korea now has the second highest number of cases in the world with 893 and eight deaths.
In Italy, where 229 people have tested positive for the virus and 7 have died, police have manned checkpoints around a dozen quarantined northern towns.
In the US on Tuesday, stocks are pointed to a slightly higher start with the Dow Jones Industrial Average seen up 0.1%, the S&P 500 called flat and the Nasdaq Composite up 0.1%.
Travel stocks in London continued to fall amid worries over demand amid the spread of coronavirus. Travel operator TUI was down 3.1% and cruise operator Carnival down 2.9%. Airlines easyJet and Ryanair were down 2.8% and 1.4% respectively.
Elsewhere in the FTSE 100, Meggitt slumped 5.1%. The aerospace parts maker warned of a difficult 2020 due to the continued grounding of the Boeing 737 MAX aircraft and the coronavirus outbreak.
Meggitt reported revenue of GBP2.28 billion in 2019, up 9.6% from GBP2.08 billion in 2018, lifting pretax profit 33% to GBP286.7 million from GBP216.1 million.
Looking ahead, Meggitt said "sector specific factors" including the production halt of the grounded Boeing 737 MAX and supply chain disruption, as well as the "wider macroeconomic impact" of coronavirus are expected to hold back margin progression in the short-term. Meggitt expects 2020 organic revenue growth in a range of 2% to 4% and 2020 underlying operating margin improved by 30 to 50 basis points.
Croda International was down 3.8% after the speciality chemicals company reported a dip in profit for 2019.
In 2019, the Yorkshire-based company recorded pretax profit of GBP302.3 million, down 4.9% on the GBP317.9 million seen in 2018. Revenue was marginally lower year-on-year at GBP1.38 billion from GBP1.39 billion the year before.
Croda declared a total ordinary dividend of 90.00 pence in 2019, up 3.4% in the 87.00p distributed in 2018. The company did, however, declare a 115p special dividend in 2018.
Among the blue-chip risers, Prudential was up 2.0% after the insurer said it was willing to facilitate a positive dialogue with activist shareholder Third Point.
The US hedge fund sent a letter to Prudential on Monday saying it had acquired a stake of just under 5%.
Dan Loeb's New York-based fund wrote to Prudential's board calling on the 332-year old insurer to split its existing US and Asian operations and list them as separate entities, saying there was "no strategic rationale" for the company to be listed in London, following its demerger of UK unit M&G last year.
In the FTSE 250, SIG slumped 15% after the building products firm said Chief Executive Meinie Oldersma and Chief Financial Officer Nick Maddock have both resigned with immediate effect.
SIG said Steve Francis will become CEO, also with immediate effect, on an initial contract until the end of 2020.
Francis had been appointed CEO of Patisserie Valerie-owner Patisserie Holdings at the end of 2018 amid an accounting scandal that sent the former CEO packing and soon thereafter the company into administration.
"Steve has had a wide-ranging CEO, CFO and management consulting career. He is a strong leader with a proven track record of returning radically restructured businesses back to growth," said SIG.
Kath Kearney-Croft - who joined SIG in January - was appointed as interim CFO with immediate effect. He was initially hired to provide support to the executive team during Oldersma's leave of absence.
To come in the economic calendar on Tuesday is US consumer confidence at 1500 GMT.
By Lucy Heming;Â [email protected]
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