FTSE hit as Asian market infected by fears of virus
The Wuhan coronavirus cast its shadow over international equity markets as the first examples of human-to-human infection emerged.
The illness is of same grouping as SARS (severe acute respiratory syndrome), which, according to the World health Organisation, infected more than 8,000 people, killing at least 700, in 2003.
In the process, international trade was hobbled, with Asia suffering disproportionately.
No surprise then that markets in China were hit yesterday, with the Shanghai Composite receding 1.4pc and hong Kong’s hang Seng down 2.8pc. The FTSE 100, down almost 100 points early on, closed 40.74 points lower at 7610.70 with Asia-affected stocks receiving the severest punishment.
British Airways owner IAG was one of the leading casualties as its shares fell 3pc, or 19.4p, to 637.8p.
Intercontinental Hotels Group , beloved of the business traveller, fell 3.5pc, or 181p, to 4965p. After a knee- jerk sell- off, Burberry, which derived over 40pc of its revenues from Asia last year, settled at 2263p, down just 14p, or 0.6pc.
The fashion retailer will today be the first of the luxury chains to update on Christmas trading. In November it said a small decline in profit margins was likely to get worse in the second half.
Flying the other way, one of the few risers was Easyjet, which rose 4.6pc, or 67p, to 1517p after the budget airline said it had benefited from the demise of Thomas Cook, which ran a rival service to holiday destinations.
Lekoil shares climbed 20pc, or 0.62p, to 3.7p, after the oil and gas explorer was given longer to pay for work at an oilfield off the coast of Nigeria.
The firm thought it had secured a £142m loan from the Qataris to pay next month’s bill and do further development work. But it revealed earlier this month that it had been scammed into paying £462,000 to individuals pretending to be linked to the Qatar Investment Authority.
Lekoil now has until March and May to pay a total of £7.4m to the group that operates the area containing the oilfield.
elsewhere, Citigroup and UBS tuned in on the publishers, following the lead set by Goldman Sachs on Monday by reviewing its calls on the media sector.
The former upgraded Relx to ‘ buy’, suggesting the publisher may be a break-up candidate. Unfortunately, the stock closed 0.1pc lower, or 1.5p, at 1996.5p.
Pearson fell 2.1pc, or 12.6p, to 576p after UBS acknowledged its optimism about the educational publisher was misplaced.
The Swiss bank’s rating – upped to ‘buy’ back in September – was marked down to ‘neutral’ and the share price target was slashed to 600p from 820p. An upgrade to its forecasts sent
Learning Technologies up 14.1pc, or 19.4p, to 157p, with the firm saying it now expects underlying earnings for 2019 to be ‘comfortably ahead of expectations’.
Miner Jangada ended 2.4pc higher, or 0.05p, at 2.1p as it kicked off a drilling programme in Brazil. Oiler Egdon fell 2.4pc, or 0.12p, to 5.12p despite Anglo-Dutch major Shell becoming an investor in two of its UK offshore licences.
But there was good news from gift card maker IG Design, which climbed 7.7pc, or 53p, to 742p after it raised £120m in an oversubscribed share placing.
Looking to the fallers, Camellia shares were scalded, dipping 2.8pc, or 250p, to 8550p as global over-production of tea meant its sales in the final months of 2019 were much lower than expected.
Finally, investors in smart home specialist Lightwave RF hit the dimmer switch as it fell 10.5pc, or 0.5p, to 4.25p as full-year losses widened to £3.6m from £2.5m.