FTSE stays in the red as coronavirus fears linger
Reuters
Published Mar 10, 2020 17:25
FTSE stays in the red as coronavirus fears linger
By Shivani Kumaresan and Noor Zainab Hussain
(Reuters) - London's FTSE 100 gave up strong gains from earlier on Tuesday to end marginally lower as optimism around stimulus measures by major central banks was overshadowed by heightened coronavirus fears in Sweden.
The commodity-heavy FTSE 100 (FTSE) was down 0.1%, after falling to its lowest level since 2016 on Monday following a crash in oil prices with the eruption of a price war between Saudi Arabia and Russia.
Sweden's Public Health Agency on Tuesday raised the risk level for local contagion of the new coronavirus to "very high" from "moderate" and said it was seeing signs of community spread in the Nordic country.
The announcement came minutes after the Stockholm region reported a jump in confirmed coronavirus cases to 207, an increase of 60 since yesterday.
Oil prices recouped some of their losses on Tuesday, boosting shares of oil and gas (FTNMX0530) and mining (FTNMX1770) companies. BP Plc (L:BP) and Royal Dutch Shell Plc (L:RDSa) both gained about 3% after closing Monday with their worst session on record.
"The market seems to be in sort of a holding pattern having had the big sell-off," said Keith Temperton, a trader at Tavira Securities. "We're looking for government responses and central bank responses to try and ease the burden on financial markets."
Fears of a global recession pounded global equity markets on Monday, with the Dow Jones Industrials Average (DJI) losing a record 2,000 points at one point. But sentiment brightened in early Asia trade on growing hopes of a second interest rate cut this month by the U.S. Federal Reserve.
Reuters also reported that the Japanese government was gearing up to spend $4.1 billion more to counter the impact of the virus, which has crushed supply chains and dented business sentiment.
A survey showed the coronavirus crisis had reversed a recent upturn in business optimism in Britain, with confidence falling to a six-month low.
Investor attention now turns to a budget speech by finance minister Rishi Sunak on Wednesday as they wait for clues on additional stimulus.
Three of Britain's biggest banks, RBS (L:RBS), Lloyds (L:LLOY) and Barclays (L:BARC), are offering repayment holidays on loans to customers affected by the coronavirus outbreak as it spreads in the country.
"It was reported that EU leaders will hold a conference call today to discuss the health crisis, and there is some optimism surrounding that too," CMC Markets analyst David Madden, said.
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In company news, billionaire investor William Ackman's hedge fund Pershing Square (L:PSHP) jumped 11.2%, topping the midcap index, after his letter to shareholders said various hedges "more than compensated" for recent market declines that hit portfolio companies.
Ultra Electronics (L:ULE) rose 8.5% after the engineering firm said the epidemic had not impacted its business.
Informa (L:INF), the world's largest exhibitions group, jumped 6.4%, ending the session as the biggest gainer on the bluechip index, after it reported upbeat annual revenue and profit.
Written By: Reuters
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