(Alliance News) - London stock prices slipped into the red as Tuesday's session progressed, having started higher, but the losses being posted at midday were still mild compared to recent pain.
Leading the blue-chip losers was Compass as the caterer warned of a hit to earnings from Covid-19, while Dixons Carphone outperformed the wider FTSE 250 on drastic plans to shutter standalone Carphone Warehouse stores in the UK.
The FTSE 100 was down 90.08 points, or 1.5%, at 5,061.00 at midday. The index of large-caps had traded as high as 5,308.95 earlier in the morning. On Monday, it ended down 4.0%, dipping briefly below 5,000 for the first time since 2011.
The mid-cap FTSE 250 index was down 563.94 points, or 3.9%, at 13,785.81 on Tuesday. The AIM All-Share index was down 5.1% at 629.30.
The Cboe UK 100 index was down 1.0% at 8,573.48. The Cboe 250 was down 4.8% at 11,889.34, and the Cboe Small Companies was down 3.9% at 8,371.33.
On the continent, the CAC 40 in Paris was down 1.1%, while the DAX 30 in Frankfurt was off 1.2%.
"Markets are in the red again this morning, although compared to yesterday the declines are modest. US futures went 'limit up' early on today, but have started to drop once more, raising the prospect of yet more 'limit down' moments after yesterday's stomach-churning volatility," said Chris Beauchamp, chief market analyst at IG.
US stocks still are pointed to start higher Tuesday after Monday's sharp losses. The Dow Jones is called up 1.3%, the S&P 500 up 1.4% and the Nasdaq up 1.9%. The Dow on Monday slumped a hefty 13%.
"The government response from around the globe appears to be ramping up once again, as the chancellor prepares to unveil more measures to help support businesses," said Beauchamp. "Whatever is announced, the measures will be expensive, but if they can form a credible package, and one co-ordinated with other governments, then markets may try to find a positive, although it may take time."
UK Chancellor of the Exchequer Rishi Sunak will set out a new package of support for businesses hit by the outbreak less than a week after announcing GBP12 billion of emergency funding in the Budget.
This comes after UK Prime Minister Boris Johnson on Monday unveiled unprecedented peacetime measures to try to control the spread of Covid-19.
They were announced as the death toll of people with coronavirus in the UK reached 55.
In the first of his daily No 10 press conferences, the UK prime minister called on people to stay away from pubs, clubs and theatres and to avoid all non-essential contacts and travel.
Shares in pub operators such as Martson's, JD Wetherspoon and Mitchells & Butlers down 32%, 15% and 14% respectively.
Wetherspoon Chair Tim Martin called on the UK government to "show Dutch courage" and keep pubs open. "Lockdown delays the inevitable and destroys the tax base at the same time, which will cripple the NHS and the economy," Martin said.
The pound was quoted at USD1.2085 Tuesday morning, lower than USD1.2271 at the London close Monday.
In UK data on Tuesday, the unemployment rate unexpectedly increased in the three months to January from historic lows.
In the three months to January, the UK unemployment rate rose to 3.9% from 3.8% in the three months to December. Market consensus, cited by FXStreet, predicted the reading to remain at the 1975 historic low of 3.8%.
However, the ONS said total employment in the UK rose to a record high of 32.99 million during the three-month period.
"The strong rate of employment growth at the start of the year is a rare bit of good news for the economy at the minute. But this growth will give way to a plunge in employment in the coming months," said Capital Economics.
"The widespread shutdown of many businesses over the next few months will almost certainly lead to a sharp rise in unemployment and an even larger drop in the number in the number of hours worked," Capital Economics said. "And even if the economy bounces back quickly in Q3, the lag between the economy and the labour market means that the unemployment rate may stay elevated until the end of the year."
The data came just hours after Dixons Carphone said it will close all of its UK standalone Carphone Warehouse stores - 531 shops representing 8% of its total UK selling space.
The company said mobile phones are to be sold through Carphone Warehouse sections of Currys PCWorld electrical shops.
Dixons Carphone expects 2,900 redundancies as the businesses are combined. It said the 70 Carphone Warehouse stores in the Republic of Ireland aren't affected, nor are international operations.
Shares in the FTSE 250-listed electronics retailer were up 12%, among the top performers in the mid-cap measure.
Elsewhere in London, Compass shares sank 20% as it anticipated governmental containment measures arising from the Covid-19 crisis to dent interim earnings.
The contract caterer said majority of its Sports & Leisure and Education business in Europe and North America have been closed due to government restrictions, with its Business & Industry volumes being "severely" hurt.
Compass said revenue growth in its half year to March 31 is now expected to be between zero and 2%, with operating profit expected to be between GBP125 million to GBP225 million lower than previously expected.
Ferguson shares fell 12% as the company struck a cautious tone over Covid-19.
The plumbing and heating products distributor said it saw strong operational delivery in the first half of financial 2020, but stopped short of confirming its annual trading profit outlook due to the "dynamic situation unfolding with Covid-19".
For the half year ended January 31, Ferguson's revenue rose 1.1% to USD10.97 from USD10.85 billion a year before. Pretax profit fell 5.7% to USD640 million from USD679 million on a USD19 million exceptional charge and USD22 million impairment charge relating to an associate.
Ferguson Chief Executive Kevin Murphy said: "Given the strength of our first half results, we had intended to confirm our full-year trading profit outlook for 2020. However, due to the dynamic situation unfolding with Covid-19 it is too early to understand its impact on current trading."
One winner in the FTSE 100 was miner Antofagasta, up 6.4%.
In 2019, Antofagasta's revenue climbed 4.9% to USD4.97 billion from USD4.73 billion. Pretax profit rose 7.7% to USD1.35 billion from USD1.25 billion.
Boosting earnings was a 7.6% rise in copper sales volumes to 772,200 tonnes from 717,600 tonnes. Average realised copper price fell 2.1% to USD2.75 per pound from USD2.81.
In forex, the euro stood at USD1.1006, up from USD1.1149. Against the yen, the dollar was trading at JPY106.99, higher compared to JPY105.85.
Brent oil recovered slightly to be quoted at USD30.34 a barrel Tuesday morning, up from USD29.99 late Monday. Gold was quoted at USD1,471.20 an ounce, down from USD1,508.34.
By Lucy Heming; lucyheming@alliancenews.com
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