FTSE losses as Javid resignation sparks sterling surge

London

THE London market has tumbled into the red on renewed coronavirus fears and after the shock resignation of Sajid Javid as chancellor sent the pound higher.

The pound jumped as investors bet the promotion of Rishi Sunak to replace

Mr Javid in the second most important job in government would herald the start of increased spending.

As sterling rose, it compounded hefty share losses on the already under-pressure FTSE 100 Index, which joined global markets in the red after news of a sharp increase in cases of coronavirus and deaths in China.

The FTSE 100 closed down 1.1% or 82.34 points at 7452.03, having at one stage plummeted 127 points, with heavy falls from the likes of British Gas owner Centrica and Barclays compounding the declines.

With many blue-chip stocks generating revenues outside Britain, sterling’s gains put shares further under pressure, with the pound up 0.7% to 1.30 US dollars and 0.9% higher at 1.20 euros.

There were also falls across Europe and on Wall Street amid worries over the spread of the strain of coronavirus – also known as Covid-19 – which halted hopes that the outbreak was easing.

The Cac 40 in France ended the session down 0.4%, while Germany’s Dax closed off 0.2%. In the US, the Dow was nearly 80 points lower at the time of close in London.

In UK stocks, Centrica was the biggest faller as annual results revealed major losses after it was hit by a cap on energy bills and falling gas prices. The firm swung to a £1.1 billion pre-tax loss from profits of £575 million in 2018.

It comes after the Government’s cap on energy prices came into force early last year, promising to bring down bills for customers on default tariffs, but knocking energy firm profits. Centrica shares finished 15% lower, down 12.96p at 71.82p.

With oil prices in decline on worries over growth in China and the wider economy, BP and Royal Dutch Shell were also striding lower, falling 14.65p to 459.95p and 73.8p to 1,947.2p respectively.

Domino’s Pizza Group in the UK fell 4.1p to 311.1p despite a deal to offload its lossmaking Norwegian arm, paving the way for further sales as it pulls out of under-pressure international markets.

Domino’s is paying up to £7m in cash to existing minority shareholders to sell its entire 71% stake in the Norway division, but said it marks a “clean exit”.

The biggest FTSE 100 risers were Coca-cola HBC ahead 100p at 2883p, RELX up 33p at 2072p, Whitbread 63p higher at 4820p and Experian 33p stronger at 2810p.

The biggest FTSE 100 fallers were Centrica off 12.96p to 71.82p, Pearson down 28.4p at 556.4p, Rolls-royce 31.6p lower at 667.4p and NMC Health 36p weaker at 818.2p.

New York

WALL Street lost ground yesterday, backing away from record highs as investors digested new coronavirus developments and mixed corporate earnings.

Technology shares led all three major US stock averages lower, with the blue-chip Dow suffering the largest percentage loss.

The Dow Jones Industrial Average fell 128.11 points, or 0.43%, to 29,423.31, the S&P 500 lost 5.51 points, or 0.16%, to 3,373.94 and the Nasdaq Composite dropped 13.99 points, or 0.14%, to 9,711.97.

Cisco dropped 5.2% after providing lacklustre forward revenue and profit guidance on its quarterly earnings call.

Tesla rose 4.8% following its announcement that it intends to raise $2 billion in a stock offering.

Alibaba Group warned that the coronavirus would hurt its revenue.

The e-commerce company’s shares fell 1.8%.

American International Group slipped 6.2% despite reporting betterthan-expected quarterly profit.

Shares of Kraft Heinz plunged 7.6% after the packaged food company missed quarterly sales expectations.