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(Alliance News) - Stocks in London ended firmly in the red on Wednesday with fears over the novel coronavirus crisis deepening, as the UK experienced its biggest day-on-day rise in deaths so far.
The UK Department of Health said 29,474 people have tested positive for the virus, up 4,324 since Tuesday. A further 563 patients with coronavirus have died in the UK, taking the total number of deaths in hospitals to 2,352.
It comes as Downing Street said more than 2,000 NHS staff have been tested for coronavirus as the Government faces intense scrutiny over its policy on testing.
On the continent, Germany will extend its current restrictions on public life to limit the spread of the coronavirus by two weeks until April 19, Chancellor Angela Merkel said Wednesday.
The FTSE 100 index closed down 217.39 points, or 3.8%, at 5,454.57.
The FTSE 250 ended down 553.93 points, or 3.7%, at 14,547.20, and the AIM All-Share closed down 16.18 points, or 2.4%, at 666.11.
The Cboe UK 100 ended down 4.2% at 9,200.32, the Cboe UK 250 closed down 3.8% at 12,499.79, and the Cboe Small Companies ended down 0.7% at 8,016.05.
In Paris the CAC 40 ended down 4.7%, while the DAX 30 in Frankfurt ended down 4.2%.
"Stocks are sharply lower as health fears continue to loom over the markets. The first quarter was dreadful and the second quarter is starting off on a negative note. The Covid-19 related death toll in the US has overtaken that of China, and President Trump has warned about a 'very, very painful two weeks' ahead. The surge in stocks seen on the back of various stimulus plans from central banks, and rescue packages from governments around the globe seems like a distant memory, and traders are bracing themselves for a deepening health crisis," said CMC Markets analyst David Madden.
In the FTSE 100, British American Tobacco closed up 3.5% after the tobacco company said its US biotech subsidiary Kentucky BioProcessing is developing a potential vaccine for Covid-19, which is now in pre-clinical testing.
Should testing go well, the London and Johannesburg-listed firm hopes to manufacture between one and three million doses of the vaccine per week, starting from June.
Kentucky BioProcessing commenced development by cloning part of the Covid-19 genetic sequence which led to the development of a potential antigen, a substance which induces an immune response in the body and in particular, the production of antibodies. The antigen was then placed into tobacco plants for reproduction, and once the plants were harvested the antigen was then purified, bringing it to pre-clinical testings.
Peer Imperial Brands closed up 1.3% in a positive read-across.
At the other end of the large cap index, Carnival ended the worst performer, down 21% after the cruise line operator said it is further canceling some of its sailings, with all San Francisco cruises scrapped for the year.
Carnival became the first major cruise line to cancel sailings until the end of the year due to the coronavirus pandemic. The group also cancelled its 2020 European season of sailings.
Auto Trader closed down 11% at 390.60 pence after the automotive digital marketplace confirmed it raised nearly GBP190 million in a share placing to bolster its balance sheet.
Auto Trader has placed 46.5 million shares at 400.0 pence each, raising GBP186 million. This price is an 8.9% discount to Auto Trader's closing price on Tuesday but a 0.9% premium to the middle market price at the time the firm and BofA agreed on the price.
UK banks ended in the red following a request from the Prudential Regulatory Authority to suspend all shareholder returns in light of the coronavirus outbreak.
The regulator wanted banks to preserve cash amid the economic uncertainty posed by Covid-19. The PRA noted the banks are "strong" financially with the capacity to weather severe economic shock.
Standard Chartered closed down 7.3%, HSBC down 7.5%, Lloyds Banking down 10%, Royal Bank of Scotland down 6.8% and Barclays down 10%
"Already facing the prospects of lower margins, given the historically low interest rate environment, as well as the possibility of an increase in bad loans (impairment losses), banks will face general economic challenges in their quest to keep the wheels of the economy oiled," said Interactive Investor's Richard Hunter.
The pound was quoted at USD1.2395 at the London equities close, down from USD1.2435 at the close Tuesday, following disappointing UK manufacturing data.
UK manufacturing activity fell to a three-month low in March amid the Covid-19 pandemic, figures from IHS Markit showed.
The IHS Markit-Chartered Institute of Procurement & Supply purchasing managers' index fell to 47.8 in March from 51.7 in February, below both the no-change mark of 50 and the flash reading of 48.0.
Output fell to the greatest extent since July 2012 amid a "severe" reduction in intakes of new business, said IHS Markit. Downturns in output and new orders were widespread.
The euro stood at USD1.0927 at the European equities close, down from USD1.0996 late Tuesday.
The eurozone manufacturing sector contracted further in March, hitting its lowest level in over seven years amid Covid-19 shutdowns, according to figures from IHS Markit. The purchasing managers' index fell to a 92-month low of 44.5 in March from 49.2 in February.
Consensus, according to FXStreet, had seen the reading falling to 44.7, which would have been just below March's flash reading of 44.8.
Against the yen, the dollar was trading at JPY107.11, down from JPY107.63 late Tuesday.
The dollar fell after data showed activity in the US manufacturing sector entered into contraction territory in March due to the coronavirus outbreak, IHS Markit said.
The US manufacturing purchasing managers' index reading was 48.5 in March, down from 50.7 in February.
The figure fell below the 50.0 mark which separates expansion from contraction and missed the market expectation of 49.2.
"This is very much the calm before the storm. Even though the service sector will bear the brunt of the hit from the lockdowns now in place, manufacturing confidence looks set to fall considerably further this coming month," said Kingswood Chief Investment Officer Rupert Thompson.
Stocks in New York were sharply lower at the London equities close after weak jobs data and a pessimistic warning from President Donald Trump about the rising US death toll from the coronavirus.
The DJIA was down 2.5%, the S&P 500 index down 2.7% and the Nasdaq Composite down 2.1%.
US private sector employment fell in March, the latest ADP national employment report showed, though more moderately than expected.
US private hiring plummeted in March by 27,000 the biggest - and only - drop since September 2017, according to the monthly report from payrolls firm ADP, but said the statistics underestimate the losses.
Ian Shepherdson at Pantheon Macroeconomics called the figures useless in reflecting only a small portion of the job loss in recent weeks.
"The labor market was in good shape before the virus, but we knew that anyway, and it's irrelevant in the face of the impending discontinuity in the data," he said in an analysis of the data which were compiled before the worst of the Covid-19 lockdowns were imposed.
Markets also are bracing for another huge jump in first-time unemployment claims on Thursday. But analysts warn that the official government jobs report on Friday, like the ADP data, will not fully capture the full coronavirus hit.
The pullback in stocks also reflected unease at Trump's pronouncements about the virus on Tuesday night after health officials said there could be 100,000 to 240,000 deaths in the US, even with the current efforts at mitigation.
Brent oil was quoted at USD25.38 a barrel at the equities close, down from USD26.61 at the close Tuesday.
Gold was quoted at USD1,590.30 an ounce at the London equities close, lower against USD1,609.09 late Tuesday.
The economic calendar on Thursday has eurozone producer prices at 1000 BST.
The UK corporate calendar on Thursday has annual results from over 50s travel and insurance company Saga.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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