(Alliance News) - Stock prices in London were mostly lower on Friday morning, as worries about the spread of the coronavirus and its economic consequences have intensified.
The FTSE 100 index was down 34.39 points, or 0.5%, at 7,402.25, hurt by poor 2019 results for education publisher Pearson. Since the week began, the blue-chip index is up 0.4%.
The mid-cap FTSE 250 index was down 27.10 points, or 0.1%, at 21,839.59, but the AIM All-Share index was up 0.2% at 976.82.
The Cboe UK 100 index was 0.6% lower at 12,533.13. The Cboe 250 was down 0.2% at 19,699.33, and the Cboe Small Companies up 0.1% at 12,498.87.
In mainland Europe, the CAC 40 in Paris was down 0.8% while the DAX 30 in Frankfurt was off 0.6%.
The pound was quoted at USD1.2888 early Friday, firm from USD1.2882 at the London equities close Thursday. The euro was at USD1.0793 early Friday, flat from USD1.0794 late Thursday.
"The sudden shoot up in the number of coronavirus outside of China has seen sentiment sour again across markets," said London Capital Group analyst Jasper Lawler.
An eruption of new virus cases in South Korea, Iran and Chinese hospitals and prisons rekindled concerns Friday about the spread of a deadly disease that has killed more than 2,200 people.
The World Health Organization warned nations they could face a serious problem if they fail to "hit hard now" against the new coronavirus, which has infected more than 75,000 in China and over 1,100 abroad.
China pointed to official numbers showing a drop in new cases this week as evidence that its drastic containment measures are working, but fresh cases emerged at two Beijing hospitals and more than 200 other cases in two prisons.
South Korea confirmed 52 more cases, taking the country's overall figure to 156, as the number of infections linked to a religious sect spiked, making it the worst-infected country outside China.
Iran confirmed three new cases after two elderly men died from the virus in the city of Qom, prompting Iraq to ban travel to and from its neighbour.
In Australia, two people who had been evacuated from a virus-wracked cruise ship off Japan tested positive for mild cases of the COVID-19 illness.
The Nikkei 225 index closed down 0.4% in Tokyo. The Hang Seng index in Hong Kong closed down 1.1%, but the Shanghai Composite closed up 0.3%.
Against the yen, the dollar was trading at JPY111.55 early Friday in London, down from JPY112.10 late Thursday.
Gold was quoted at USD1,631.56 an ounce early Friday, higher than USD1,621.15 late Thursday. Brent oil was at USD58.68 a barrel, down from USD59.75.
"There is a sense that the coronavirus means central bank policy stays ultra-accommodative even longer, and that's good for a non-interest-bearing asset like gold," said Lawler.
On the London Stock Exchange, education publisher Pearson was down 1.1% early Friday. Sales decreased by 6% in headline terms in 2019 to GBP3.87 billion from GBP4.13 billion a year earlier, halving pretax profit to GBP232 million from GBP498 million.
Pearson noted that profit was further hurt by the reduced gains on disposals and higher restructuring charges. The FTSE 100 company said it believes that "the future of learning will be increasingly digital" and therefore, the company is restructuring to keep pace.
Looking ahead, Pearson said it expects to deliver 2020 adjusted operating profit of between GBP410 million to GBP490 million, excluding the recently sold 25% stake in Penguin Random House. The disposal generated USD675 million net proceeds.
In 2019, adjusted operating profit totalled GBP581 million, up from GBP546 million in 2018, reflecting a GBP130 million year-on-year benefit from restructuring, and other benefits, including operational factors, FX and the adoption of IFRS 16 accounting standard.
"As we benefit from further efficiencies from the investments we have made and deploy our strong balance sheet, Pearson is now well placed, in time, to grow in a profitable and sustainable way," said Chief Executive John Fallon.
Among the FTSE 250 stocks, property firm Daejan surged by 55% to GBP80.15 as it has secured a final cash offer from Dock Newco and the independent non-executive director of Daejan.
Dock Newco is offering GBP80.50 in cash for each Daejan share. On Thursday, Daejan shares closed flat at GBP51.70 each.
The offer price values the entire issued share capital of Daejan at GBP1.31 billion and 21% of free float shares at GBP269.5 million.
The financial terms of the offer are final and will not be increased, Dock Newco noted.
Hammerson started the day 2.8% higher, after selling a portfolio of seven retail parks in the UK for GBP400 million.
The sale of the portfolio, to Orion European Real Estate Fund V, is expected to generate net proceeds for Hammerson of GBP395 million. It includes retail parks such as the Forge Shopping Park in Telford and Cleveland Retail Park in Middlesbrough.
The total sale price of the portfolio represents a net initial yield of 8.9% and is 23% below the last reported book value as at June 30.
Separately, Hammerson said it sold Parc Tawe in Swansea and Abbey Retail Park in Belfast individually, generating proceeds of GBP55 million.
TBC Bank slipped by 1.9% after Nikoloz Kurdiani, deputy chief executive Of JSC TBC Bank sold GBP212,373 in shares in a transaction on Thursday.
Kurdiani disposed of 15,338 shares at a price of GBP13.85 each. It has not been disclosed how many shares, if any, he has left after the sale.
The economic events calendar on Friday has PMI readings from the eurozone at 0900 GMT, the UK at 0930 GMT and US at 1445 GMT.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
