FTSE edges higher despite rising coronavirus death toll


The FTSE 100 has edged higher, tentatively building on a recovery from Monday’s heavy sell-off sparked by fears over the spread of the coronavirus in China.

The UK blue-chip index rose seven points to 7,488, but is still well short of the level traded on Friday, before the sharp sell-off at the beginning of this week.

The coronavirus has already claimed more victims in China than the 2002/3 pandemic of severe acute respiratory syndrome (Sars), with the death toll now having reached 132, according to China’s National Health Commission.

Hong Kong’s Hang Send stock exchange tumbled 2.8% overnight after reopening for the first time since the spread of the coronavirus following the lunar new year break.

 

Neil Wilson, analyst at Markets.com, questioned whether the spread of the coronavirus could impact on China’s ability to meet commitments made to the US under its ‘phase one’ trade deal.

‘If things get really bad, not only do we see a material decline in Chinese gross domestic product growth, but this also creates headwinds for complying with the deal,’ he said.

‘Further deterioration in the yuan is among the most obvious concerns. In terms of growth being affected in China, there is a clear risk to supply chains and contagion in the rest of the region as well as knock-on effects further afield. The most obvious risks are to consumption but a sustained lockdown in the major cities would also tend to lead to a loss of output that could be hard to claw back later in the year.’

READ  Global stocks rise as US jobs data boost hopes for recovery

The risks posed to the Chinese economy will make the US Federal Reserve’s meeting today even more important, and while the market is not pricing in any cut to interest rates, the emergence of the virus is expected to ensure a cautious outlook.

Crest Nicholson (CRST) rose to the top of the FTSE 250, building on yesterday’s gains to trade 5.2%, or 24p, higher  at 497p. The house builder has been buoyed by a turnaround plan that is targeting improved margins under new chief executive Peter Truscott.

Avast (AVST) fell to the bottom of the index, down 7.9%, or 38p, to 443p after the anti-virus software developer was accused of harvesting customer data and selling it to corporate clients. The group denied the allegations in a blog post, stating it ‘wanted to reassure our users that at no time have we sold any personally identifiable information to a third party’.

There were equally big moves on the Alternative Investment Market (AIM) this morning, with Hurricane Energy (HUR) soaring 13.4%, or 2.9p, to trade at 24p after the oil and gas explorer reported revenue forecasts for 2019 ahead of expectations.

Hurricane chief executive Robert Trice said the group was ‘focused on delivering operational progress, on budget and on schedule, and in doing so delivering returns to shareholders’.

Atalaya Mining (ATYM) was among the AIM fallers, sliding 9.2%, or 19p, to trade at 187p after the Spanish regional government of Xunta de Galicia said the company’s project in the region posed an environmental risk. The metal miner said it was considering appealing the authority’s report.

READ  Hargreaves Lansdown: we challenged Woodford over unquoted stocks 18 months ago



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here