Last checked at 
(Alliance News) - Stocks in London ended a volatile week in the red on Friday as investors panicked over the ramifications of the coronavirus, while oil prices dropped after the OPEC meeting ended with Russia resisting supply cut calls.
Global stock markets tumbled over concerns about the impact on the economy and as countries take more drastic steps to prevent contagion of a disease that has killed more than 3,300 people and infected nearly 100,000 in about 85 nations.
The FTSE 100 index closed down 242.88 points, or 3.6%, at 6,462.55, ending the week down 1.8%.
The FTSE 250 ended down 576.62 points, or 3.0%, at 18,746.51, ending the week down 3.0%.
The AIM All-Share closed down 24.89 points, or 2.8%, at 850.94, and ended the week down 0.7%.
The Cboe UK 100 ended down 3.6% at 10,961.75, the Cboe UK 250 closed down 2.9% at 16,739.35, and the Cboe Small Companies ended down 2.2% at 11,301.97.
In Paris the CAC 40 ended down 4.1%, while the DAX 30 in Frankfurt ended 3.4% lower.
"For risk appetite to return in earnest we need to see a downturn in infection rates. If the rest of the world is following the China script (perhaps too much to hope for) then the growth in cases might begin to slow next week. But it feels like we have a longer and harder road to travel in Europe and the US, with the latter a particular source of concern," said IG Group's Chris Beauchamp.
On the London Stock Exchange, Anglo American ended the worst blue chip performer, down 8.2% after Anglo American Platinum cut annual production guidance following an explosion at a plant in South Africa.
Amplats is the platinum group metals business of Anglo American, which has a majority stake.
Amplats said the phase A converter plant at the Waterval smelter in Rustenberg, North West province, was damaged after an explosion in the converter on February 10. No employees were injured. As such, Amplats cut annual PGM production guidance to between 3.3 million to 3.8 million ounces. Previous guidance was for production of 4.2 million to 4.7 million ounces.
Glencore closed down 6.8% after the commodities house found potentially "relevant" facts to current investigations, the Financial Times reported Thursday. Glencore is currently facing corruption and bribery probes from the US Department of Justice, the UK Serious Fraud Office, as well as from authorities in Brazil. Glencore's auditor Deloitte, the FT reported, said the company has found facts "which may be relevant" to the investigations, and they have now been shared with regulators.
Shares in oil majors Royal Dutch Shell 'A', Shell 'B' and BP were down 5.4%, 5.9%, and 5.2% respectively tracking spot oil prices lower.
Brent oil was quoted at USD46.00 a barrel at the equities close from USD50.91 at the close Thursday, after OPEC and Russia-led non-OPEC allies failed to agree on deeper production cuts.
The North Sea benchmark fell to a low of USD45.36 in afternoon trade - its lowest level since mid-2017.
OPEC ministers on Thursday recommended a 1.5-million-barrels-per-day cut in the face of the global slowdown caused by the epidemic and the resulting fall in demand for oil, but the decision hinged on agreement from the so-called OPEC+ grouping, with Russia foremost among them.
Ministers from the cartel's kingpin Saudi Arabia along with their Russian counterparts held bilateral discussions before the meeting's official start - more than six hours later than scheduled.
Russian Energy Minister Alexander Novak told reporters after the meeting that OPEC and his OPEC+ grouping failed to reach an agreement.
He said: "Regarding cuts in production, given today's decision, from April 1, no one – neither OPEC countries, nor OPEC+ countries – are obliged to lower production."
OANDA analyst Edward Moya summarised: "Russia was content in being the Bond villain in what appears to be the last movie in the three-years series called OPEC+. The Russians can live with USD40 a barrel oil and it seems they are willing to stomach even lower prices in the short-term to see the industry consolidate. Russia's endgame could be to gain market share in 2021 when global demand returns to normal. Russia might be willing to see some US shale drillers go out of business and if OPEC eventually capitulates without them."
Conversely, shares in British Airways parent International Consolidated Airlines Group ended the best blue chip performer, up 2.0%. Airlines benefit from lower oil prices as fuel costs will be lower.
The pound was quoted at USD1.3020 at the London equities close, up from USD1.2922 at close Thursday.
The euro stood at USD1.1325 at the European equities close, up sharply from USD1.1185 late Thursday, due to its 'funding currency' status.
Against the yen, the dollar was trading at JPY105.23, down from JPY106.73 late Thursday, trading at five months lows amid risk-off sentiment.
A funding currency normally has a low interest rate in relation to the high-yielding counterparts. Investors typically borrow the funding currency and take short positions in the asset currency, which has a higher interest rate.
During bull markets, funding currencies will under perform because investors are willing to take on more risk. On the other hand, during bear markets, investors will rush to funding currencies because they are considered safe haven assets.
The greenback remained under pressure against major counterparts following the US Federal Reserve's surprise interest rate cut earlier this week.
Investors are growing increasingly fearful that the Fed will cut interest rates again at its next policy meeting set for March 17 and 18.
FXPro analyst Alex Kuptsikevich told Alliance News: "In the short term, demand for the yen, the franc, and the euro as safe-havens, means that demand for protective assets prevails against the background of liquidation of risk positions. The dollar tumbles down to major currencies as the markets expect even more aggressive easing from the Fed and less active action from other central banks. CME's FedWatch tool shows a 65% probability of Fed rate cut by another 75 points on March 18 on top of the reduction of 50 points made earlier in the week.
"There are real tectonic shifts in investor expectations amid a stock market crash and led to huge forex market moves. For the USD, more active steps from the Fed as well as from ECB and others may become a turning point, interrupting USD growth in recent years. This reminds us of the shifts we saw in 2002-2008, when there was a multi-year weakening of the USD with short breaks."
In addition, Wall Street stocks "will bounce back," but the Federal Reserve should nonetheless cut rates again, President Donald Trump said on Friday following the release of a solid employment report.
"Job numbers are incredible," the president said after new Labor Department data showed the US economy adding 273,000 new jobs in February.
But Trump told reporters, "The Fed should cut and the Fed should stimulate."
Stocks in New York were sharply lower at the London equities close as fears over the coronavirus took the gloss off a positive US jobs report for February.
The Dow Jones Industrial Average was 2.0% lower, the S&P 500 index lost 2.5% and the Nasdaq Composite shed 2.7%.
Demand remained elevated for secure assets such as bonds, with the yield on the 10-year US Treasury note falling to a fresh all-time low.
The Labor Department reported that the US economy added 273,000 jobs in February, beating expectations for 175,000 jobs. In addition, the unemployment dipped to 3.5% in February, from 3.6% in January - near a 50-year low.
"The February jobs report showed remarkably healthy labor market fundamentals prior to the coronavirus outbreak," said Oxford Economics. "But, while strong employment and steady wage gains have boosted consumers' immune system, the virus is all but certain to infect their willingness to spend. Cautious businesses, weary workers and the absence of a coordinated policy responses will weigh on job growth in first half of 2020."
Gold was quoted at USD1,665.00 an ounce at the London equities close against USD1,658.87 late Thursday, retreating from an intraday high of USD1,689.86 in morning trade.
The economic events calendar on Monday has Germany industrial production data at 0700 GMT.
The UK corporate calendar on Monday has annual results from life and pensions consolidator Phoenix Group and from shipping services provider Clarkson.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
