• FTSE 100 sheds 64 points
  • Bigcap miners friendless
  • Identified cases of the coronavirus in the US rises to 16
  • US benchmarks lag

5.20pm: FTSE 100 in the red

FTSE 100 joined global markets to head lower on Thursday, weighed on by the big miners, which are tied to China, amid heightening fears over the coronavirus.

The death toll in China has increased and a case has been confirmed in Singapore, A few people in Scotland are also being tested, it recently emerged.

“It would appear the situating is getting worse, which is why traders are becoming more fearful,” said David Madden, analyst at CMC Markets.

Investors are attempting to gauge the potential impact of the virus on airlines, retailers and to China’s consumption of metals and oil.

Britain’s blue-chip index finished down over 64 points at 7,507. The midcap FTSE 250  plunged over 222 points at 21,540.

On  Wall Street, the Dow Jones Industrial Average lost over 124 points at 29,061. The broader-based S&P 500 index shed around nine points at 3,312 and the tech-heavy Nasdaq lost nearly seven points.

US benchmark crude sank 2.41% a barrel to US$55.37.

Top laggard on Footsie in London was steel giant Evraz (LON:EVR), down 6.47% at 374.70, followed by copper titan Antofagasta (LON:ANTO), which dropped 4.83% to 863.20p

3.35pm: Four people in Scotland are being tested for the coronavirus

London’s leading stocks were led lower by stocks deemed most exposed to the economy of China, where the coronavirus situation appears to be worsening.

“With the number of potentially identified cases of the coronavirus in the US rising to 16, alongside 600-plus incidents of the illness in China, the markets remained fearful on Thursday,” said Connor Campbell at Spreadex. “It is still unclear how much the coronavirus is the market story at the moment, or whether it will be soon be replaced by something else. Much of that will be dependent on just how quickly those numbers continue to rise over the Lunar New Year,” he added.

For now, UK investors are keeping their concerns in check judging by the somnambulistic trading in the afternoon session.

The FTSE 100 was down 50 points (0.7%) at 7,522.


2.40pm: US benchmarks in reverse gear

As expected, US investors joined (most of) the rest of the world’s markets and slipped into the red.

The Dow Jones was down 172 points (0.6%) at 29,011 while the broader-based S&P 500 was off 15 points (0.5%) at 3,306.

In the UK, the Footsie has been becalmed at lower levels throughout the afternoon; currently, it is down 35 points (0.5%) at 7,537.

Among the minnows, Edenville Energy PLC (LON:EDL) rose 16% to 0.055p after the company completed its recently announced fundraising, placing shares at 0.04p and raising £700,000 in the process.

The company said it had received enquiries from a potential customer in the Democratic Republic of the Congo.

2.10pm: FTSE 100 modestly lower: US indices set to open on the back foot

US markets are expected to open lower as concerns over the spread of the coronavirus infect endure.

After dipping 10 points yesterday to close at 29,186, the Dow Jones is expected to open at around 29,103, down 83 points.

The S&P 500 eked out a gain of just under a point yesterday but is expected to switch course and open around 7 points lower at 3,314.

US first-time jobless claims last week rose to 211,000 from 205,000 the week before, which was a shade below the 214,000 expected by the market.

“We expected a bigger rebound after last week’s exceptionally low reading, so today’s report adds more weight to our view that the underlying trend in claims is not rising; it might, perhaps, be falling again,” declared Ian Shepherdson, the chief economist at Pantheon Macroeconomics.

“All the slowdown in payroll growth from the 2018 peak has been due to slower gross hiring, not rising lay-offs. Note too that continuing claims fell sharply again, down 37K. The spike in late December, which triggered a degree of consternation among some investors, has now reversed. That’s no surprise; continuing claims just lag initial claims, which spiked in early December as a result of seasonal adjustment problems,” he added.

In the UK, the Office for National Statistics (ONS) has released its “English Housing Survey 2018 to 2019”. It is a national survey of people’s housing circumstances and the condition and energy efficiency of housing in England.

It revealed that owner-occupation rates remained practically unchanged for the sixth year in a row at 64%, as did the proportion of households in the private rented sector, at 19%.

“The social rented sector, at 4.0 million households (17%), remained the smallest tenure, following a long downward trend which has stabilised over the last decade or so; however, the composition of the social rented sector has changed in recent years. In 2008-09, the social rented sector accounted for 18% of households with 9% (2.0 million) renting from housing associations and 9% (1.9 million) renting from local authorities. In 2018-19, 10% (2.4 million) rented from housing associations, 7% (1.6 million) from local authorities,” the ONS noted.

As for so-called Generation Rent, after more than a decade of decline, the proportion of 25-34-year-olds in owner-occupation has increased to 41%, more or less matching the proportion that is living in the private rented and owner-occupied sectors.

In the last 20 years, overcrowding has increased in the rented sectors and remains at the highest rate it has ever been in the social rented sector, the ONS added.

Coincidentally, housebuilders were among the minority of FTSE 100 stocks that were on the rise today.

The FTSE 100 was down 28 points (0.4%) at 7,545.

1.20pm: ECB stands pat

As expected, the European Central Bank (ECB) maintained its key refinancing and deposit rates at 0.00% and -0.5%, respectively, in January.

The rate on the marginal lending facility rate was also unchanged, at 0.25%, which was also as expected

“Based on financial news reports, and market participants’ discussions, going into this meeting, the press conference will be dominated by two lines of inquiry,” reported Claus Vistesen, the chief Eurozone economist at Pantheon Macroeconomics.

“First, journalists will pin down Ms Lagarde on whether the ECB is still committed to its negative interest rate policy. Doubt has emerged since the December meeting, if only because rate expectations are now rising slightly. Ms Lagarde will need to take a stand today, and we think that she will reiterate the central bank’s commitment to maintaining negative rates as a key pillar of the policy stance,” the economist continued.

“Secondly, journalists will prod the president for details on the policy review, though we suspect that they won’t get much in the way of concrete signs. The position from the point of view of markets, however, is clear enough; markets expect the policy review to push the ECB towards a more dovish and activist policy stance. Any evidence to the contrary would likely move the markets,” he added.

In the UK, equities remain subdued, with the FTSE 100 down 29 points (0.4%) at 7,543.

11.50am: Top-shares index holding up well if you ignore China-focused stocks

London’s index of leading shares has whittled away most of its earlier losses and would probably be in credit were it not for the miners.

The FTSE 100 was down 14 points at (0.2%) at 7,558.

Miners are off the ‘buy’ list because of concerns over the impact of the coronavirus on China’s economy, although it is steel maker Evraz PLC (LON:EVR), down 3.3%, which is propping up the rest of the Footsie constituents.

“The death toll in China has ticked up to 17 and there are nearly 600 confirmed cases of the infection. Traders are cutting their exposure to stocks for fear the health crisis will spread. Stocks in the tourist trade that have operations in the Far East such as Intercontinental Hotels and International Consolidated Airlines are lower this morning,” reported CMC’s David Madden.

Contract caterer Compass Group PLC (LON:CPG) was also on the slide, shedding 23.5p at 1,889p after HSBC abandoned its bullish stance and hopped on the fence.

A broker downgrade also put a dent in the share price of Wm Morrison Supermarkets PLC (LON:MRW); the shares fell 1.5p to 183.35p after Goldman Sachs moved to a ‘sell’ recommendation from ‘neutral’.

10.30am: China sneezes, Europe catches a cold

ith China set to start celebrating its New Year from Saturday, markets remain antsy about the situation in Wuhan.

The FTSE 100 was down 21 points (0.3%) at 7,551 with commodities and airline stocks prominent among the blue-chip laggards.

“The outbreak of the coronavirus has come at the worst possible time in China, just as hundreds of millions of people prepare to travel across the country and join their families for the New Year. It was therefore important for Beijing to act rapidly and drastically in order to both contain the virus and offer comfort that we are not seeing a repeat of the Sars fiasco 17 years ago,” said Craig Erlam at Oanda.

“Safe to say, quarantining more than 10 million residents of Wuhan certainly ticks both of these boxes. The measures may prove unpopular with those unable to celebrate the New Year with their families but it will be reassuring to everyone else as an immediate response,” he suggested.

Not that investors found it particularly reassuring with stocks in Shanghai taking a bath as traders looked to close positions ahead of the extended market holiday next week.

Among the mid-caps, Sycona Limited (LON:SYNC) was out of sync with the broader market, advancing 1.6% after its portfolio company, Autolus Therapeutics, announced its flotation price.

Sycona has agreed to invest around £11.4mln in the initial public offering; its stake of 28.3% is valued at around £151mln, which is more than one-tenth of the FTSE 250 company’s stock market valuation.

8.40am: Dull start for Footsie

The FTSE 100 started the session firmly in negative territory, taking its cue from Asia overnight, which was driven sharply lower amid fears the coronavirus could turn into a pandemic.

The index of UK blue-chips fell 33 points to 7,538.76

A potential trade war between the US and UK also helped dampen the spirits in the City of London, where the grey weather conditions mirrored the mood.

The day’s big riser was online fashion group ASOS (LON:ASC), whose trading statement surprised on the upside for once.

“After a woeful 2019 which included profit warnings and warehouse outages, investors were hoping that October’s full-year numbers marked a line in the sand,” said Richard Hunter, an analyst at Interactive Investor. “Based on this update, the early indications are that this might be the case.”

The miners were on offer with Chile-focused copper digger Antofagasta (LON:ANTO) leading the declines with a 2.5% fall.

The market went defensive as traders bid up British American Tobacco (LON:BATS), which advanced 1.5%.

Among the tiddlers, life sciences group Avacta (LON:AVCT) was also well bid. It advanced 6% in the wake of a better than expected update on trading.

Proactive news headline:

Avacta Group PLC (LON:AVCT) said revenues and cash were ahead of forecast as the life sciences specialist reconfirmed plans to take its first drug into the clinic later this year. The developer of antibody-like proteins called Affimers said it had benefited from collaborations with companies such as LG Chem and ADC Therapeutics, which funded its R&D activities.

ECSC Group PLC (LON:ECSC), the provider of cyber-security services, returned to underlying profitability in the second half of last year. In a brief trading update covering 2019, the group revealed it was cash generative in the second half of the year, with positive adjusted underlying earnings (EBITDA) of around £200,000.

Diversified Gas & Oil PLC (LON:DGOC) has had its borrowing base reviewed and its credit limit set at US$650mln. Presently, DGOC has drawn borrowings of US$437mln from the facility. The redetermination of the borrowing base comes shortly after DGOC’s US$200mln securitisation financing, completed in November.

Gfinity PLC (LON:GFIN) is continuing its transition toward higher-margin forms of esports entertainment and has reshuffled its commercial leadership to drive its growth ambitions. In a trading update for the six months ended 31 December, the esports media firm said after “significant growth” in its higher-margin revenue streams it now expected gross profits to rise 300% to £2.1mln, while adjusted operating losses will be cut to £2.4mln from £4.4mln.

Immotion Group PLC (LON:IMMO) has unveiled plans for a share placing to accelerate its growth plans after inking a revenue-sharing deal with the MGM Mandalay Bay resort and casino in Las Vegas. The firm, which specialises in ‘out of home’ virtual reality (VR) experiences, said it plans to raise around £2.85mln through the issue of 39.3mln new shares at a price of 7.25p each, an 11% discount on Wednesday’s closing price.

Arix Bioscience PLC (LON:ARIX), the venture capital company focused on the biotechnology sector, said its portfolio company, Autolus Therapeutics (NASDA:AUTL), has priced its offering of new American Depositary Shares (ADS). In total it has put up for sale 7.25mln ADSs at a price of US$11 each in an underwritten offer that will bring in a ‘gross’ US$80mln.

Europa Oil & Gas PLC’s (LON:EOG) big Irish Atlantic oil and gas ambitions have taken another dent as an unnamed sector ‘major’ walked away from farm-out talks. The ‘major’, via its NW Europe division, had been in engaged in Europa’s farm-out process for more than a year, but, amidst an internal strategic review, the would-be venture partner has now told Europa that the project is no longer under consideration. Europa said talks with other parties continue.

Open Orphan PLC (LON:ORPH) confirmed that as previously announced it is currently undertaking meetings with investors in connection with its proposed placing of £5mln. The company said while it hopes to complete the placing at, or close to, the implied offer price of 6.3p per ordinary share in line with the authorities granted by shareholders to raise up to £10mln at the general meeting on 6 January 2020, there can be no certainty as to the outcome of the placing until the placing is concluded. The group added that discussions with potential investors remain ongoing and a detailed announcement will be made in due course.

MTI Wireless Edge Ltd. (LON:MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, has announced that its share repurchase programme which commenced on 28 January 2019 and was originally put in place until no later than 26 July 2019 and then subsequently extended until 26 January 2020, has now been extended until 26 July 2020.

APQ Global Limited (LON:APQ), the AIM-listed emerging markets growth company announced that as at the close of business on 31 December 2019, its unaudited book value per ordinary share was 93.98 US cents, equivalent to 70.94p. The group also said its board has declared a dividend of 1.5p per share in respect of the quarter to 31 December 2019 which is payable on 2 March 2020 to shareholders on the register as at the close of business on 31 January 2020.

Tally Ltd, the company which offers customers the chance to buy currency backed by physical gold, said it will be holding its third live shareholder Q&A with the group’s two co-founders, Cameron Parry and Ralph Hazell on the online Tally Community, Thursday 23rd January 7pm-8pm.

6.40am: Footsie called lower 

The FTSE 100 index is set to start Thursday on the back foot as Trump trade tensions switch from China to Europe.

CFD and spread betting firm IG Markets sees the London index down around 8 points, calling the price at 7,552 to 7,555 with just over an hour to go until the open.

On Wall Street, equity benchmarks were mixed overnight. The Dow Jones finished 9 points or 0.03% lower at 29, 186. The S&P 500 edged 0.02% higher to 3,321 and the Nasdaq Composite moved up 0.14% to 9,383.

“President Trump claimed the EU has ‘no choice’ but to negotiate a new trade deal with the US,” said David Madden, an analyst at CMC Markets.

It is no secret that Trump is putting America first, so he could give Brussels the same treatment he dished out to China in a bid to rebalance the trading relationship.

Also, a trade spat with the EU could score him political points, which would come in handy seeing as he is up for re-election in November.

The analyst added: “Concerns about the coronavirus influenced markets too. Parallels have been drawn with the SCARS crisis in 2003, but Beijing’s handling of the situation seems to be more open this time, so the fear factor isn’t too bad. Should the situation get worse, stocks in the tourist trade could suffer.”

In Asia, Japan’s Nikkei dropped 235 points or 0.98% to 23,795 while Hong Kong’s Hang Seng shed 627 points or 2.2% to 27,718 and the Shanghai Composite slumped farther, losing 3.4% to 2,956.

Around the markets:

  • The pound: US$1,3121, down 0.16%
  • Gold: US$1,556 per ounce, up 1.25%
  • Brent crude: US$62.18 per barrel, down 3.8%
  • Bitcoin: US$8,517, down 2.42%

Significant events due on Thursday, January 23:

Trading announcements: ASOS PLC (LON:ASC), Anglo American plc (LON:AAL), Computacenter plc (LON:CCC), Countryside Properties PLC (LON:CSP), Gear4music Holdings PLC (LON:G4M), Hyve Group PLC (LON:HYVE), PayPoint PLC (LON:PAY), Strix Group PLC (LON:KETL)

Interims: CPL Resources PLC (LON:CPS), Ilika PLC (LON:IKA), NCC Group PLC (LON:NCC)

Finals: Blue Prism Group plc (LON:PRSM)

Economic announcements: ECB policy decision, US weekly jobless claims

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