UK stocks leap after China acts to shore up economy
Reuters
Published Feb 04, 2020 17:15
By Shashwat Awasthi and Muvija M
(Reuters) - UK shares leaped on Tuesday as China's central bank took steps to shore up the economy, easing fears about the global impact of the coronavirus epidemic, while positive corporate reports from blue-chips added momentum.
The FTSE 100 (FTSE) jumped 1.6%, with the leader board dominated by BP (L:BP), which rose 4.2% after increasing its dividend, and plumbing parts distributor Ferguson (L:FERG) up 7% at a record high as it mulls listing shares in the United States.
The FTSE 250 (FTMC) was also tracking Asian stock markets higher, adding 1.3%. Both British benchmark indexes recorded their strongest day since mid-December.
China's central bank has injected 1.7 trillion yuan through reverse repos into its market this week, amid the fast-spreading epidemic that has killed more than 420 people.
"Support from the PBOC (People's Bank of China) is helping stabilise things, whilst there does not yet appear to be a serious escalation in the rate of new cases in China," Markets.com analyst Neil Wilson said.
"Tentative signs of a plateauing in new cases will be supportive of risk."
Though worries over the fallout from the coronavirus linger, markets are staging a comeback following a sell-off last week, with generally upbeat corporate earnings and economic data soothing some nerves.
Analysts at BlackRock (NYSE:BLK) said they expect these factors to support further global growth this year, though the unknown magnitude and duration of the outbreak poses downside risks.
Shares of Glencore (L:GLEN) jumped 5.2% as the miner maintained its 2020 production targets.
NMC Health (L:NMC) ended 3.3% lower despite it reassuring investors that its trading for 2019 was in line with expectations. It had climbed as much as 9% earlier in the day.
Its stock has shed more than half its value since December when it came under attack from U.S. short-seller Muddy Waters.
A prominent FTSE 250 gainer was transport firm FirstGroup (L:FGP), which jumped 6% after property investor Robert Tchenguiz raised his stake.
IT firm Micro Focus (L:MCRO) tanked 22.3% to a near six-year low and underperformed the midcaps after reporting lower annual results.
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"Today's update was particularly painful seeing as the company has issued a few profit warnings in recent years," CMC Markets analyst David Madden wrote of Micro Focus.
Written By: Reuters
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