- FTSE 100 plunges 639 points
- US benchmarks tank too
- Intu Properties tumbles again after massive mark-down of is assets
5.20pm: FTSE closes 10.87% lower
FTSE 100 index joined global markets in a sea of red on Thursday and closed nearly 11% lower – the biggest daily loss since Black Monday in 1987 – after another day of trading chaos.
Britain’s blue-chip index finished down 10.87%, or 639 points, at 5,237. It has now plunged over 31% since its level at the beginning of 2020, the losses coming in the last three weeks.
Thursday saw investors seemingly increasingly perplexed at the response from global governments to deal with the coronavirus crisis and its effect on economies, among them President Trump’s response and his sweeping ban on travel into the US from 26 European countries.
On Wall Street, electronic intervention kicked in to suspend trading shortly after the market open as stocks plunged. When it resumed shares made up some lost ground but still fell.
The Dow Jones lost 1,064 points, or 4.52%, having already entered a bear market by dropping 20% at the close last night.
“The European travel ban combined with no clear plan to assist the domestic economy has prompted dealers to dump stocks. The fact the limit down mechanisms – the circuit breakers that stop the markets spiralling out of control, had to be used, sends out a very worrying message,” said David Madden, market analyst at CMC markets.
After the London close, in a press conference following an emergency Cobra meeting in Downing Street, UK Premier Boris Johnson said the country was now moving into the ‘delay’ phase from ‘containment’ and that the number of cases of the virus would “rise sharply”.
“This is the worst public health crisis for a generation,” he told reporters.
3.30pm: Buy volatility
And the hits just keep on coming … the FTSE 100 is now down 548 points (9.3%) and is close to losing a tenth of its value in a single day.
Even in a slumping market it is possible to make money, however, if you know how. For instance …
For those “long” on equities, however, it has been another nightmare day, as reflected in the share price performance of companies heavily invested in the markets, such as Prudential PLC (LON:PRU), down 18%, and Standard Life Aberdeen PLC (LON:SL.), down 15%.
Meanwhile, on the coronavirus front, the death toll in the UK has increased to eight, and the number of people diagnosed with the condition has shot up by 134 to 590.
Across the Irish Sea, Ireland has ordered the temporary closure from tomorrow of all schools, colleges and childcare facilities.
2.25pm: Hurricane hits markets
All we need now is for Michael Fish to assure us all that a hurricane is not on its way.
The FTSE 100, down 544 points (9.3%) at 5,339 is set for its worst day since Black Monday in October 1987.
If the FTSE 100 closed right now this would be a worse one-day fall than any single day during the financial crisis. Worse than any single day since Black Monday in 1987
— Ed Conway (@EdConwaySky) March 12, 2020
FTSE biggest drops
Oct 20th 1987 -12.22%
Oct 19th 1987 -10.84%
Oct 10th 2008 -8.85%
Oct 6th 2008 -7.85%
Right now it’s -8.5%
— Neil Wilson (@marketsneil) March 12, 2020
On a day of dramatic falls there have been a number of companies that suddenly look like endangered species; Travelex owner Finablr and highly-geared cinemas owner Cineworld have already been mentioned and to that list you may add highly-geared shopping centres owner Intu Properties PLC (LON:INTU), down 19% at 4.62p.
The property firm revealed losses for last year swelled to £2bn as the value of its shopping centres was revaluation down.
Because of the risk of further valuation declines and the ability to refinance its debt pile, the company said: “A material uncertainty exists that may cast significant doubt on the group and company’s ability to continue as a going concern.”
1.45pm: ECB dips into its box of tricks
It did not take long for the Dow Jones to trigger the circuit breaker that halts trading for 15 minutes.
The 30-share index was down 2,056 points (8.7%) after the trading pause at 21,497 and heading south at a rate of knots.
The broader-based S&P 500 was down 226 points (8.2%) at 2,515.
Closer to home, the FTSE 100 was suffering similar travails, slumping 501 points (8.5%) to 5,376 – a level not seen since 2012.
Meanwhile, the European Central Bank (ECB) has gone to its admittedly largely bare cupboard and plucked out a range of measures to limit the fall-out from the spread of the coronavirus.
“However, contrary to expectations, the ECB did not cut its deposit rate more deeply into negative territory. Instead, the ECB will buy more assets with a focus on private sector bonds and inject even more liquidity at even more favourable terms into the banking system. In its statement announcing the monetary policy decision, the ECB emphasised that it does not see ‘material signs of strains in money markets or liquidity shortages in the banking system’,” said Holger Schmiedling of the German bank, Berenberg.
“None of the ECB’s measures or any other monetary, fiscal or regulatory policy initiative can be the circuit breaker in the recession into which the Eurozone seems to have fallen this month, in our view but the ECB package, and further steps by bank supervisors as well as by fiscal policy, can limit second-round effects,” Schmiedling said.
“The ECB today has made it even less likely that the severe Covid-19 shock to the real economy could morph into a financial crisis. The ECB package also raises the hope that, once the medical outlook has become clearer, the Eurozone economy will be in a better position than otherwise to recover from the current severe shock to supply and demand,” he added.
UPDATE on coronavirus (#COVID19) testing in the UK:
As of 9am 12 March 2020, a total of 29,764 people have been tested:
8 patients who tested positive for coronavirus have sadly died.
The digital dashboard will be updated later today. pic.twitter.com/6hPeNlUU7f
— Department of Health and Social Care (@DHSCgovuk) March 12, 2020
1.15pm: US indices set for another free-fall
Think of a number. Now halve it.
That seems to be the thinking in the market at the moment.
In the US, the capitulation is set to continue, with the Dow Jones tipped to dive 1,186 points at the outset to 22,367.
The S&P 500 is slated to open at around 2,604, down 137 points.
In London, the FTSE 100 is plumbing new depths at 5,461, down 415 points (7.1%).
12.15pm: UK house prices still on the rise
Lost in the rush to sell shares this morning was the latest temperature-taking of the housing market by the Royal Institution of Chartered Surveyors (RICS).
Sales of new homes increased for a third consecutive month across the United Kingdom, as has buyer demand and new instructions, according to the February 2020 RICS UK Residential Market Survey.
The survey essentially rebases the number of responses to 100 and then subtracts the number who saw a decline in new buyer enquiries from the number who saw an increase to give a net balance.
February saw a balance of +20, while the net balance of survey participants saying they expect more homes to be sold as the year progresses was +60.
“However, concerns have been raised by property professionals about the impact of coronavirus which although yet unknown, could adversely affect viewings and the traditional spring house selling season,” the press release from RICS said.
“It is encouraging that the results of the latest survey continue to show a positive trend both in terms of potential buyer interest and new instructions to agents. Indeed, this is the first time since 2014 that new supply to the market on the RICS indicator has increased for three consecutive months,” said Simon Rubinsohn, RICS’s chief economist.
The net balance of surveyors reporting that house prices have risen over the last three months increased to +29 in February, from +18 in January, which was well above the consensus forecast of +20, reported Samuel Tombs at Pantheon Macroeconomics.
“The housing market was hotting up quickly before COVID-19 spread in Britain. The new buyer enquiries balance fell to +20 in February, from +23 in January, but remained well above its 2019 average, -11,” Tombs noted.
“The new sales instructions balance remained positive too, despite falling to +15, from +19. The recovery in demand, however, has been more substantial than the pick-up in supply. Surveyors, therefore, reported that house price growth over the last three months was stronger than in any other period since April 2016,” he continued.
“Looking ahead, some estate agents expressed concern that the coronavirus might make people less willing to visit homes over the key spring period for the housing market. Nonetheless, the combination of the 50bp [half point] cut in Bank Rate and the establishment of a new Term Funding Scheme, designed to ensure that the reduction in Bank Rate feeds through fully to new lending rates, has provided the housing market with powerful support. As a result, we’re sticking with our forecast for house prices to rise by 4% this year,” Tombs said.
The survey result came out on the day London & the south-east-focused house-builder Berkeley Group Holdings PLC (LON:BKG) put on ice its extra £455mln shareholder payout “until there is greater clarity” about the impact of coronavirus on UK economic activity.
Berkeley’s shares were down 7.4% at 3,776p.
The FTSE 100 was down 335 points (5.7%) at 5,542.
11.40am: FTSE 250 nightmare
It’s been a good day to bet against the bookmakers, as more sporting events get cancelled.
All football matches in Spain’s top flight have been suspended for two weeks while the tennis tour is expected to shut down for up to ten weeks.
In Greece, the flame lighting ceremony for this year’s Olympic Games in Tokyo was attended by a sparse crowd.
LaLiga confirms suspension of the competition for Matchdays 28 and 29.
— LaLiga English (@LaLigaEN) March 12, 2020
Finablr PLC (LON:FIN), the company behind the Travelex foreign exchange outfit, has plummeted 56% to 9.99p while cinemas operator Cineworld PLC (LON:CINE), which has borrowed up to the eyeballs in recent years to expand rapidly through acquisition, has halved in value.
Both companies face an uncertain future. Travelex has been hit by the decline in foreign travel since the coronavirus hit the West and by its parent company’s association with the controversial Indian businessman, B R Shetty, while Cineworld is worried there will not be enough bums on seats to continue trading if everyone self-isolates and stays at home to watch Contagion on Netflix.
The FTSE 100 was down 322 points (5.5%) at 5,555 and the FTSE 250 was 1,128 points (6.5%) lower at 16,211.
On the plus side … hang on, there is no plus side … unless you are a holder of suit hire firm Moss Bros Group PLC (LON:MOSB), which was 49% higher at 20.38p after its board recommended a 22p a share takeover deal.
10.50am: Even shares in a toilet roll maker are going down the pan
Having crashed below 5,500, the Footsie has at least struggled its way back to 5,529 but already the rally is fading.
London’s index of leading shares is down 347 (5.9%).
“Now that all bets are off it is maybe not a surprise that Flutter Entertainment, formerly Paddy Power Betfair, is leading the FTSE fallers with a 12% decline,” said Fiona Cincotta at City Index.
Very witty, Fiona, although the decline has now extended to 14.7%; the bookie must be having a bad time of it at Cheltenham.
More than £400m wiped off gambling stocks this morning bookies face cancellation of global sporting events and Betway handed biggest ever UK fine
Ladbrokes / Coral (GVC) – down 9%
PaddyPower / Betway (Flutter) – down 12%
888 – down 9%
[Correction to my earlier tweet ????♂️] pic.twitter.com/tTnD38rhAl
— Tom Witherow (@TomWitherow) March 12, 2020
The second-biggest faller is TUI AG (LON:TUI), the package tour operator, which is down 13% at 406p. The reasons for this collapse are easier to surmise; President Trump’s ban on flights from the Shengen area.
If like me, you assumed Shengen was a province in China, the following might prove useful; it’s a list of companies that are in the Shengen zone.
Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland.
Trump thinks Shengen is a province in China!
— Aozora (@richdunleave) March 12, 2020
In fact, everywhere you look on the Footsie, its mayhem; traditional defensive sectors such as supermarkets, utilities and drugs are only defensive in as much as you will lose your money more slowly if you are invested in them.
9.35am: Clean sweep of losers
The index is off 345 points (5.9%) at 5,532.
Defensive stocks, such as supermarkets and drugs companies, are getting off relatively lightly, as are oil stocks, despite the fact Brent crude is down a couple of dollars at US$33.80 a barrel.
One drugs company not getting off lightly was AstraZeneca PLC (LON:AZN), which was down 5.5% at 6,573p after the Phase III GY004 trial for cediranib added to Lynparza in platinum-sensitive relapsed ovarian cancer failed to meet its primary endpoint.
— Travelex UK (@TravelexUK) March 10, 2020
B R Shetty continues to be like King Midas in reverse, with fintech company Finablr (LON:FIN), in which the Shetty family has a substantial stake, halving in value this morning after raising doubts about its ability to carry on as a going concern.
Travel restrictions imposed to limit the spread of the coronavirus have reduced demand for the company’s foreign exchange and payment services, while “adverse perceptions in the market that the circumstances surrounding NMC Health PLC” – in which the Shetty family also has a big stake – have “exacerbated current levels of stress on the company’s cash flow position”.
8.45am: Stocks in intensive care
The FTSE 100 index shed a further 6% of its value in another bloodbath opening to proceedings in London.
A frenzied open saw 367 points wiped from the UK blue-chip index, which is now trading at 5,509.25. At this rate it could smash into the 4,000s amid heightened coronavirus worries.
The US yesterday clamped down on all flights from mainland Europe in the immediate aftermath of the outbreak being upgraded to pandemic status by the World Health Organisation.
Stateside, NBA basketball games have been suspended, while here in the UK it seems increasingly likely that football fixtures will be played behind closed doors.
“Volatility is not going anywhere, and we again see global stock markets tumbling on Thursday,” said Neil Wilson, senior analyst at Markets.com.
“So much for Trump’s stimulus. Instead of his late-night presidential address calming things, it only fanned the flames raging in markets. The president has gone from calling it a Democrat hoax to banning all travel from Europe in just 12 days.”
On the casualty front, retailer WH Smith (LON:SMWH) lost 14% of its value after warning the coronavirus outbreak would hit trade from its travel outlets.
Among the blue-chips, the travel stocks were understandably hard hit, with British Airways owner IAG (LON:IAG) among the top fallers as it lost another 10%. TUI (LON:TUI), Intercontinental Hotels (LON:IHG) and easyJet (LON:EZJ) weren’t far behind.
Also among the fallers were the life and pensions companies that are invested in markets or rely on long-term government debt for an income.
It was another poor day for the miners, which will suffer if, as expected, a number of major economies fall into recession and growth slows in China.
On the FTSE 250, Travelex owner Finablr (LON:FIN) lost half its value after admitting it is being hurt by a liquidity squeeze.
The world appears to have stopped for Cineworld (LON:CINE), whose box office takings look likely to be hurt by the coronavirus, following the delay to a number of Easter blockbuster cinema releases.
Proactive news headlines:
Westminster Group PLC‘s (LON:WSG) ongoing gig as the technical partner on the container screening project in Ghana’s Tema port is set to be formalised. The screening project has been in operation since July 2019 but for various reasons, the contract between Meridian Port Services and Scanport had not been signed until now, paving the way for Scanport and Westminster to finalise their associated contract. The contract is for a renewable five-year term.
ECSC Group PLC (LON:ECSC) said it has secured two major managed service contracts with a national charity and high street retailer with a combined revenue value of over £590,000. The cybersecurity firm said the wins represented more than 20% of its current managed services order book and that the revenue will be recognised over the three year term of both contracts.
OptiBiotix Health PLC (LON:OPTI) has signed a licensing agreement for its cholesterol-lowering products in Bulgaria. Velinoff Pharma will promote and distribute the CholBiome and CholBiomeX3 brands, which contain the company’s LPLDL probiotic bacteria strain. It will target pharmacies, cardiologists, GPs and cardiology clinics.
Crossword Cybersecurity PLC’s (LON:CCS) consulting division has signed several new agreements, including three with companies in the legal, insurance and financial services sectors, to improve their cybersecurity posture. The AIM-listed firm said it had begun a cyber transformation project with a leading insurance company, the fourth client secured in the sector over the last 12 months, and is also working with a major UK law firm to implement new technical controls and “a more risk focussed governance structure”.
Arix Bioscience PLC (LON:ARIX) has said it will invest US$3.0mln (£2.3mln) in the initial public offering being undertaken by its portfolio company, Imara Inc., which will see the UK-listed firm retain a 9.4% stake in Imara. In a statement, the global venture capital company, which is focused on investing in and building breakthrough biotech companies, noted that Imara has priced its Nasdaq IPO of 4,700,000 shares of common stock at a public offering price of US$16.00 per share for aggregate gross proceeds of $75.2mln.
Primary Health Properties PLC (LON:PHP) is to fund the fitting out of a doctors’ surgery in Epsom, Surrey. Primary Health (PHP) will acquire the long leasehold interest of the property on completion of the work for a total cost of £4.1mln. The property will be let to the Ashley Surgery for an initial term of 20 years from practical completion.
Ceres Power Holdings PLC (LON:CWR) has raised aggregate proceeds of £49mln in total from share subscriptions by existing investors German firm Robert Bosch GmbH and Weichai Power of China. The group Bosch’s holding will increase from 11.8% of the existing share capital to approximately 18.0% of Ceres’ enlarged issued share capital. It added that Weichai will maintain its shareholding at 20% of the subsequently enlarged issued share capital.
Tiziana Life Sciences PLC (LON:TILS) (NASDAQ:TLSA) said it has priced its US fundraiser at US$3 per American Depositary Share (ADS), meaning the gross proceeds of the stock offer will be US$10mln. The injection of cash will be used to advance the clinical development of Foralumab, the company’s phase I drug candidate for Crohn’s Disease and progressive multiple sclerosis. It will also be deployed to “expedite” clinical development of TZLS-501 for coronavirus COVID-19, as well as providing working capital.
Europa Oil & Gas (Holdings) PLC (LON:EOG) has announced the appointment of Stephen Williams, co-chief executive officer of Reabold Resources PLC (LON:RBD), as an independent non-executive director of the company. It said Williams replaces independent non-executive director, Roderick Corrie, who is stepping down from the board after twelve years of service, with the changes effective immediately. Simon Oddie, Europa’s interim chief executive officer and executive chairman commented: “Stephen’s appointment to the Board of Europa is well-timed. His proven track record at Reabold in sourcing, securing and participating in upstream appraisal opportunities, which have subsequently generated multiple discoveries, will prove invaluable to Europa.“
United Oil & Gas PLC (LON:UOG), the AIM-listed oil and gas exploration, development and production company, said it has appointed the chief financial officer (CFO) of Rockhopper PLC (LON:ROK), Stewart MacDonald as a non-executive director of the company with immediate effect. MacDonald, who has 17 years of energy and corporate finance experience, was appointed as CFO of Rockhopper in March 2014 and prior to that was a director of Rothschild’s global oil and gas group Graham Martin, United’s chairman, commented: “I am delighted to welcome Stewart to the Board of United Oil & Gas. His familiarity with the Abu Sennan asset and experience in Egypt will prove invaluable to United. We are sure Stewart will make a very positive contribution to the Board.”
6.45am: Fresh plunge expected
The FTSE 100 is set to plunge yet again as the coronavirus continues to spread and increasingly impact society in Europe and America.
CFD and spreadbetting firm IG Markets sees the London index falling another 285 points, making the price 5,567 to 5,571 with just over an hour before the open.
The World Health Organisation has now formally designated the COVID19 coronavirus as a global pandemic, overnight in America the NBA basketball season was suspended and President Donald Trump announced that flights between Europe and the United States will be grounded.
“In a bid to reassure the markets, the New York Fed increased the amount of money available in the repo market to at least $175 billion, up from $150 billion it set on Monday,” said David Madden, analyst at CMC Markets.
“The news didn’t halt the decline in US banking stocks, in fact, one could argue the announcement put more pressure on them as it points to weakness in the banking industry.”
“The US president said he will push for a payrolls tax relief, but no stimulus in particular was announced. The result was a sharp fall in US index futures, hence why stocks in Asia are in the red.”
Madden added: “European equity markets are called much lower and long haul airlines such as BA’s parent, International Consolidated Airlines Group and Air France, are likely to be hit hard.”
On Wall Street, the Dow Jones gave up 1,464 points or 5.86% to finish Wednesday’s session at 23,553 while the S&P 500 dropped 4.89% to end the day at 2,741. The Nasdaq shed 4.7% to close at 7,952.
In Asia, Japan’s Nikkei lost 856 points of 4.41% to 18,559 and Hong Kong’s Hang Seng fell 914 points or 3.63% to 24,317. The Shanghai Composite reduced by 1.44% changing hands at 2,925.
Around the markets:
- Pound: US$1.2803, down 0.13%
- Gold: US$1,636 per ounce, down 0.3%
- Brent crude: US$34.37 per barrel, down 4.1%
- Bitcoin: US$7,488, down 4.65%
Significant events expected on Thursday:
Finals: Marshalls PLC (LON:MSLH), Computacenter plc (LON:CCC), Savills PLC (LON:SVS), Tullow Oil PLC (LON:TLW), Keller Group PLC (LON:KLR), Arrow Global Group PLC (LON:ARW), Oakley Capital Investments Ltd (LON:OCI), Helios Towers PLC (LON:HTWS), Valeura Energy Inc (LON:VLU), Secure Income REIT PLC (LON:SIR), Bodycote PLC (LON:BOY),
Economic data: ECB interest rate decision, US jobless claims, US PPI
- Coronavirus: Trump suspends travel from Europe to US – BBC News
- Coronavirus: UK expected to move to ‘delay’ phase – BBC News
- London’s Tube and airports hit by coronavirus – Mail Online
- Travel insurer stops selling policies due to coronavirus impact – The Guardian
- Coronavirus: All stores except food shops and pharmacies to close in Italy – ITV News
- The sky is full of empty planes thanks to coronavirus and EU rule – The Telegraph
- Wall Street ends 11-year ‘bull market’ as coronavirus fears spread – The Guardian
- PepsiCo to buy energy drink maker Rockstar for $3.85bn – Financial Times
- Adidas and Puma sales collapse in China amid coronavirus outbreak – The Guardian
- Uber may suspend the accounts of riders and drivers exposed to coronavirus – The Verge
- Debenhams seeks CEO to oversee restructure after legal challenge fails – The Guardian