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London open: Stocks make gains after Monday's coronavirus sell-off

By Josh White

Date: Tuesday 25 Feb 2020

London open: Stocks make gains after Monday's coronavirus sell-off

(Sharecast News) - London stocks had their heads above water on Tuesday morning, as investors continued to digest the latest developments around the spreading global outbreak of the Covid-19 strain of coronavirus.
At 0833 GMT, the FTSE 100 was up 0.44% at 7,188.63, as the FTSE 250 rose 0.59% to 21,242.49.

Sterling was stronger against its two major pairs, last rising 0.27% against the dollar to $1.2959 and 0.16% on the euro to €1.1926.

The FTSE 100 had suffered its worst single-day points loss since August 2015 on Monday, as investors rushed to safety amid the outbreak.

Market participants were looking past the slowing rate of infection in China, as well as the relaxation of travel restrictions in places such as Beijing, and focusing on the rapidly-growing number of infections in countries including Italy and South Korea.

By Tuesday morning, seven people had died and more than 220 people were confirmed to be infected in Italy, as authorities there placed a number of localities on lockdown.

"There has been so much complacency in recent weeks from investors, despite clear signs that China's economy is facing a large hit and that supply chains around the world were being disrupted," said AJ Bell investment director Russ Mould overnight.

"Markets initially wobbled in January, but had quickly bounced back, implying that investors didn't see the coronavirus as a serious threat to corporate earnings.

"They may now be reappraising the situation."

Supply chain concerns were also emerging, with Associated British Foods warning that some clothing lines at its fast fashion brand Primark could face shortages later in the year if production capacity remained constrained in China.

AB Foods shares were down 0.1% in early trading, while peers Next and M&S were in the green.

Among other equities, Tesco was up 0.52% after it announced the sale of its 20% share in the Chinese Gain Land retail joint venture to its partner China Resources Holdings (CRH) for ?275m.

The supermarket chain on Tuesday said the sale would help its "further simplify and focus the business on its core operations" and the cash used for general corporate purposes.

Retail property developer Hammerson was 1.58% firmer after holding its dividend, reporting an 8.5% fall in earnings per share and writing down the value of its assets as the company continued to battle the High Street crisis.

Full year adjusted earnings per share came in at 28p against 30.6. The company reported a widened basic loss per share of 102.1p compared with a loss of 34.1p in 2018.

Hammerson has been exposed to the woes of the retail sector as online shopping and soaring costs have hit property owners as stores demand rent cuts. The value of its portfolio fell 16.2% to ?8.3bn. Net debt was cut to ?2.4bn, below Hammerson's ?3bn target.

On the downside, AstraZeneca was 0.04% weaker after agreeing to sublicense its global rights to 'Movantik', or naloxegol, excluding Europe, Canada and Israel, to RedHill Biopharma, it announced on Tuesday.

The FTSE 100 pharmaceuticals giant described Movantik as a peripherally acting mu-opioid receptor antagonist, indicated for the treatment of opioid-induced constipation.

It said RedHill would make an upfront payment of $52.5m (?40.54m) to AstraZeneca on closing, and a further non-contingent payment of $15m in 2021.

Croda International lost 2.32% in early trade after reporting a fall in annual profit, as the specialty chemicals company's sales were affected by a slower US personal care market and weak industrial demand.

Adjusted pre tax profit for the year to the end of December declined 2.8% to ?322.1m from a year earlier as core sales slipped 0.2% to ?1.27bn. Excluding currency movements profit fell 3.7% and sales dropped 2.3%.

Meggitt was off 3.94% as it said the suspension of Boeing's 737 Max aircraft and the impact of coronavirus would slow revenue growth in 2020 as the aerospace-focused engineer reported an 11% increase in 2019 profit.

Underlying pre tax profit for the year to the end of December rose to ?370.3m from ?334.8m as organic revenue increased 8% to ?2.28bn. Statutory pretax profit rose 33% to ?286.7m as reported revenue rose 9%.

FTSE 100 - Risers

Bunzl (BNZL) 2,074.00p 3.65%
easyJet (EZJ) 1,290.50p 2.67%
Prudential (PRU) 1,456.50p 2.53%
NMC Health (NMC) 868.60p 2.41%
International Consolidated Airlines Group SA (CDI) (IAG) 579.60p 2.40%
JD Sports Fashion (JD.) 842.80p 2.26%
Pearson (PSON) 591.80p 2.10%
Anglo American (AAL) 1,981.80p 2.01%
Centrica (CNA) 78.26p 1.93%
St James's Place (STJ) 1,139.50p 1.47%

FTSE 100 - Fallers

Meggitt (MGGT) 565.80p -4.81%
Carnival (CCL) 2,764.00p -1.46%
Croda International (CRDA) 4,872.00p -0.98%
Evraz (EVR) 365.40p -0.60%
Antofagasta (ANTO) 811.80p -0.54%
Standard Chartered (STAN) 603.80p -0.46%
Reckitt Benckiser Group (RB.) 6,222.00p -0.40%
Legal & General Group (LGEN) 299.80p -0.33%
Burberry Group (BRBY) 1,789.50p -0.31%
Ocado Group (OCDO) 1,092.50p -0.27%

FTSE 250 - Risers

Pollen Street Secured Lending (PSSL) 890.00p 7.49%
Tullow Oil (TLW) 37.18p 3.28%
Hyve Group (HYVE) 90.00p 2.97%
Spectris (SXS) 3,038.00p 2.84%
Derwent London (DLN) 4,340.00p 2.75%
Vesuvius (VSVS) 420.40p 2.44%
Dechra Pharmaceuticals (DPH) 2,846.00p 2.23%
Marks & Spencer Group (MKS) 182.90p 2.15%
ICG Enterprise Trust (ICGT) 952.00p 2.15%
888 Holdings (888) 129.40p 2.13%

FTSE 250 - Fallers

SIG (SHI) 74.75p -10.43%
Sirius Real Estate Ltd. (SRE) 90.00p -3.64%
Fisher (James) & Sons (FSJ) 1,822.00p -3.29%
Aston Martin Lagonda Global Holdings (AML) 369.60p -2.20%
Contour Global (GLO) 177.00p -2.10%
Helios Towers (HTWS) 136.50p -1.87%
Telecom Plus (TEP) 1,496.00p -1.84%
Restaurant Group (RTN) 121.10p -1.54%
BlackRock World Mining Trust (BRWM) 357.00p -1.38%
Oxford Instruments (OXIG) 1,512.00p -1.31%


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