Bargain hunters help the markets to bounce back

Global markets have rebounded from Monday’s coronavirus scare, which saw the FTSE 100 drop at its fastest rate in months.

London’s top index closed the day up 68.64 points, or 0.93 per cent at 7480.69.

It allowed the blue chip companies to claw back some of the 193.15 points they had lost on Monday.

The rise came even as the outbreak of the deadly virus worsened in China, and the first case of human-to-human spread of the virus was confirmed in Germany after the virus was found in France yesterday.

“The positive move in equities is probably down to short covering plus bargain hunting as the health crisis has deepened. The longer the news story hangs around, traders might build up a tolerance to it,’’ said David Madden, an analyst at CMC Markets.

Traders will also be more optimistic after the Chinese central bank signalled it would, if needed, use its tools to boost economic sentiment.

The Cac index in Paris rose around 1.1 per cent on the day, while Germany’s Dax was up 0.9 per cent.

The price of Brent crude oil rose 1.7 per cent to 59.92 dollars, after a major fall on Monday.

Investors who had flocked to gold in Monday’s stock sell-off were left disappointed by a 0.8 per cent drop in its price to 1,568 dollars per ounce.

This was largely influenced by a rise in the price of the dollar, which also hit the value of the pound.

Sterling fell by 0.47 per cent against the US currency, to 1.2995. Compared to the euro, it lost 0.35 per cent of its value to 1.1806.

In company news, the Thomas Cook saga continued as the new boss of Saga, Euan Sutherland, said that he has a “clear focus’’ on turning around the group’s performance, as shares rose 3.18p to 44.92p.

The group said its insurance and travel businesses continued to operate in challenging markets.

It took a £4m hit from the collapse of Thomas Cook.

PZ Cussons closed the day up by 2.4p to 197p as the Imperial Leather maker pinned its hopes in the UK on a range of environmentally friendly soaps as it promised the second half of the year is likely to be better than a meek first six months when revenue and profit fell.

Sainsbury’s also pushed higher, by 11/2p to 2051/2p, after outgoing boss Mike Coupe said he was not forced out of the supermarket for its failure to merge with rival Asda last year.

AG Barr sparkled to become the fastest-rising stock on the FTSE 350 as the Irn-Bru maker said that the hit to annual profits it had expected will be smaller than first feared.

Shares were up by 83p, or 15.2 per cent to 627p.

It was followed by Crest Nicholson, which won the FTSE 350 silver medal with a 7.4 per cent share price hike.

The housebuilder saw revenues and profits decline, but said that there is more interest since December’s general election.

Shares were up 32.4p to 472.6p. The biggest risers on the FTSE 100 were Intercontinental Hotels, up 1391/2p to 4,7091/2p, St James Place, up 321/2p to 1,1301/2p, Hargreaves Lansdown, up 521/2p to 1,8511/2p, Glencore, up 6.2p to 227.60p, and Whitbread, up 111p to 4,350.00p.

The biggest fallers on the FTSE 100 were Diageo, down 46p to 3,1461 /2p, Centrica, down 0.7p to 88.34p, Polymetal International, down 8p to 1,261.00p, Halma, down 13p to 2,132.00p, and TUI AG, down 4.8p to 815.80p.