(Alliance News) - Stock prices in London are set for lower open on Friday, after Wall Street and Asian stocks closed in the negative territory overnight, amid renewed investor concerns that coronavirus is hurting the global economy.
IG futures indicate the FTSE 100 index is to open 14.24 points lower at 7,422.40. The FTSE 100 index closed down 20.38 points, or 0.3%, at 7,436.64 on Thursday.
The pound was quoted at USD1.2892 early Friday, firm from USD1.2882 at the London equities close Thursday. The euro was at USD1.0792 early Friday, flat from USD1.0794 late Thursday.
"It's about time we start seeing bad data creeping in and giving us a better perception of the true impact of the coronavirus on the global economy," said Ipek Ozkardeskaya at Swissquote.
"In this respect, recent releases point that new car sales plunged 92% in China in February and the airline traffic is expected to post the first drop since 2011 amid heavy virus containment measures in China and elsewhere took a heavy toll on travel globally."
Countries have banned travellers from China and airlines have suspended flights to and from the country.
But clusters and outbreaks continue to emerge, and 11 people have now died outside mainland China.
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.
China reported 118 more deaths on Friday, raising the toll to 2,236, most of the them in Hubei.
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.
The Nikkei 225 index closed down 0.4% in Tokyo. The Hang Seng index in Hong Kong is down 1.0%. The Shanghai Composite closed up 0.3%.
Japan's private sector output in February saw its worst rate of decline since early 2014, Jibun Bank flash PMI estimates showed Friday, as the country desperately looks to avoid a technical recession.
The Jibun Bank flash composite purchasing managers' index for Japan fell to 47.0 points in February from a final reading of 50.1 in January. A reading above 50 indicates expansion in the sector and one below contraction.
IHS Markit Economist Hoe Hayes said: "Latest PMI data dash any hopes of a first quarter recovery in Japan and significantly raise the prospect of a technical recession in the world's third largest economy."
The flash services PMI sank to 46.7 in February from 51.0 in January. Jibun Bank said the sector had seen a "solid fall" in February, with output seeing its sharpest decline since April 2014.
The outbreak of the coronavirus in neighbouring China hit tourism in Japan, which drove down footfall and new business.
Meanwhile, Japan's consumer prices rose 0.7% year-on-year in January, the same level as the previous month on a seasonally adjusted basis, the government said on Friday.
The figure, however, was still far off the 2% inflation target set by the Bank of Japan in April 2013 when it introduced aggressive monetary easing measures to combat deflation and reboot the economy.
Against the yen, the dollar was trading at JPY111.94 early Friday in London, down from JPY112.10 late Thursday.
In the US on Thursday, Wall Street closed lower, with the Dow Jones Industrial Average and the S&P 500 both down 0.4% and Nasdaq Composite down 0.7%.
On the London Stock Exchange, education publisher Pearson said early Friday its 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 its profit was further hurt by the reduced gains on disposals and higher restructuring charges. The FTSE 100-listed company 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, down from GBP581 million reported in 2019, with the 2020 figures excluding the recently sold 25% stake in Penguin Random House.
"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.
Halma said it bought Utah-based Maxtec, which distributes oxygen analysis and delivery products for use in medical and non-medical applications.
Maxtec will be managed as part of Halma's Perma Pure business in the US, it said, medical dehydration products of which are also used in acute care units.
The cash consideration for Maxtec is USD20 million, on a cash and debt free basis, which will be funded from Halma's existing facilities, it said.
"Maxtec is highly aligned with our purpose, and further extends our presence in diagnostic products and acute healthcare," said Halms Chief Executive Andrew Williams.
Among FTSE 250 stocks, energy services provider Hunting said it acquired Enpro Subsea for USD33.0 million, plus a potential maximum earn out of USD3.0 million based on earnings performance in 2020.
Enpro has developed subsea production technology that has been adopted by offshore operators within the global oil and gas industry, Hunting said.
"The acquisition of Enpro further strengthens Hunting's subsea offering and adds a high technology product group to our portfolio," said Hunting Chief Executive Jim Johnson.
Property firm Daejan 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.
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.
The economic events calendar on Friday has PMI readings from France at 0815 GMT, Germany at 0830 GMT, 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.
