27th Jan 2020 11:50
(Alliance News) - London stocks were deep in the red at midday on Monday as fears continued to grow over the spread of coronavirus in China, with shares in travel and mining firms among the worst hit.
The FTSE 100 index was down 167.45 points, or 2.2%, at 7,418.53. The FTSE 250 was down 360.95 points, or 1.7%, at 21,402.99, and the AIM All-Share was down 1.3% at 953.69.
The Cboe UK 100 was down 2.2% at 12,574.09, the Cboe UK 250 was down 1.5% at 19,344.32, and the Cboe Small Companies down 0.4% at 12,410.36.
In European equities on Monday, the CAC 40 in Paris was down 2.3%, while the DAX 30 in Frankfurt was also 2.3% lower.
"European markets are on the slide as fears intensify over the potential implications of the Chinese coronavirus," said Joshua Mahony, senior market analyst at IG.
Mahony continued: "China-related stocks are getting hit hard on the FTSE today, with IAG, Carnival, and other international travel firms slumping as China locks down in a bid to get on top of this crisis. The further this virus spreads, the worse it will be for Chinese economic output."
"It should come to no surprise to see the FTSE 100 hit hardest in Europe, with the highly internationalised nature of the index meaning it is more exposed than most," the IG analyst said. "We are also seeing commodity stocks slump, with the prospect of a decline in Chinese growth hurting expectations of demand in the sector."
Intercontinental Hotels Group were the worst performer in the FTSE 100 at the start of the week, down 6.3%, while British Airways parent International Consolidated Airlines was not far behind, down 6.0%.
Cruise operator Carnival was down 5.4% and miners Rio Tinto and Anglo American were down 4.9% and 4.7% respectively.
Luxury retailer Burberry was down 3.8%, with French peer LVMH down 3.4% and Gucci-owner Kering down 3.9%.
The toll from China's viral epidemic spiked on Monday to 80 dead with hundreds of new infections despite unprecedented quarantines and travel lockdowns, as foreign governments scrambled to help their trapped citizens.
Cases have been reported as far afield as France, the US and Canada, with various countries in Asia also detecting cases. Those infected had previously been in China. The new additions to China's death toll came entirely from the epicentre province of Hubei, which on Monday reported 24 fresh fatalities.
China's National Health Commission said on Monday in addition to 2,744 confirmed infections nationwide – an increase of 769 – there were nearly 6,000 suspected cases and more than 30,000 people under medical observation.
Amid Monday's risk-off mood, safe haven assets such as gold and the Japanese yen rose.
Against the yen, the dollar was trading at JPY108.85 on Monday, down compared to JPY109.36 late Friday.
Elsewhere in forex, the pound was quoted at USD1.3085 at midday Monday, compared to USD1.3068 at the close on Friday. The euro stood at USD1.1023 at midday Monday, against USD1.1025 late Friday.
Gold was quoted at USD1,583.30 an ounce against USD1,571.18 at the close on Friday.
Brent oil, however, was knocked by supply fears amid the coronavirus spread, quoted at USD58.91 a barrel midday Monday from USD60.72 late Friday.
Stocks in New York were set for a sharply lower open on Monday, with the Dow Jones seen down 1.5%, the S&P 500 index down 1.5% also, and the Nasdaq Composite pointed 1.9% lower.
Back in London, Computacenter was up 1.0% in the FTSE 250 after Berenberg raised the IT infrastructure firm to Buy from Hold.
Amigo Holdings tumbled 23% after launching a strategic review and formal sale process.
The review will be looking into the lender's "strategy, ownership and operating model". Amigo said it is considering the potential sale of the company as a whole, the sale of parts of the group, the sale of the UK business, and a potential de-listing of the company's shares.
Amigo - provides loans to consumers, payments for which are guaranteed by a borrower's friend or family member - said controlling shareholder Richmond Group is a "willing seller" of its 60% stake.
Petra Diamonds was down 8.6% after a fall in diamond prices offset increased production in the first half of its financial year.
For the six months to December, Petra produced 2.1 million carats, a rise of 3% on the year before. It is on track for full-year guidance of approximately 3.8 million carats. However, the firm's revenue fell 6% to USD193.9 million, mainly due to lower prices and, as previously reported, an adverse product mix from the Finsch and Williamson mines.
This was slightly offset, Petra said, by the "exceptional" blue diamond found at Cullinan. The 20-carat stone was sold in November for USD15 million, having been found in September from South Africa's Cullinan mine.
Petra did say prices stabilised in the second quarter of its year, and it believes demand will continue to improve.
By Lucy Heming; [email protected]
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