(Alliance News) - Stocks in London were mixed at midday on Monday, with investors continuing to gauge the effects of the deadly coronavirus as the epidemic reached a bleak milestone.
The head of the World Health Organisation has warned that confirmed cases of coronavirus being transmitted by people who have never travelled to China could be the "tip of the iceberg".
Tedros Adhanom Ghebreyesus's remarks come as members of a WHO-led "international expert mission" flew to China on Monday to help coordinate a response to the outbreak that has so far infected more than 40,000 people and killed 908 in the country.
The death toll from the coronavirus has now surpassed that of severe acute respiratory syndrome which killed 774 people between its outbreak November 2002 and containment in July 2003.
"There've been some concerning instances of onward #2019nCoV spread from people with no travel history to (China)," Tedros tweeted Sunday, using the virus's provisional scientific name.
Outside of China, the virus has spread to 24 countries.
In the UK, four more patients in England have tested positive for the coronavirus, bringing the total number of cases in the to eight.
The Department of Health said the four people newly diagnosed contracted the virus in France. It comes as the UK government declared coronavirus a "serious and imminent threat to public health" as it introduced new powers to deal with the spread of the virus.
Meanwhile, millions of people in China returned to work on Monday after an extended holiday aimed at slowing the spread of the disease. In an attempt to contain the virus, cities in Hubei province at the epicentre of the outbreak have been locked down and many transport links countrywide have been cut to stop the movement of hundreds of millions of people who usually visit family during the annual Lunar New Year break.
BK Asset Management's Boris Schlossberg said: "Even if the global infection rate remains low, the damage to China has been immense, with global supply chains deeply disrupted, yet here too investors are taking a Panglossian view that Chinese authorities will be able to contain the virus and send half the country's population that is now under quarantine back to work by the start of March. If that's the case, the bullish case may win out as markets will assume that Chinese Communist Party authorities will flood the market with a massive stimulus to restart the economy and make up for lost production.
"For now, however, those two factors - global infection rates and resumption of Chinese economic activity are unknown and trade in both equities and FX is likely to be cautious as traders watch the coronavirus story with focus. Despite the flood of risk-off news equities remain virtually at all-time highs, but if the news does not improve soon investors may lose patience and the buy the dip mentality could finally give way."
The FTSE 100 index was down 16.54 points, or 0.2%, at 7,450.16 at midday. The FTSE 250 was up just 1.74 points at 21,500.60, and the AIM All-Share was flat at 961.29.
The Cboe UK 100 index was down 0.7% at 12,612.58. The Cboe 250 was down 0.1% at 19,361.41, and the Cboe Small Companies up 0.4% at 12,441.31
In Paris the CAC 40 and the DAX 30 in Frankfurt were both down 0.2%.
On the London Stock Exchange, NMC Health was the standout performer, up 12%. The UAE-focused private healthcare confirmed it has received "highly preliminary approaches" from private equity firms Kohlberg Kravis Roberts & Co and GK Investment Holding Group, regarding possible offers.
The Mail on Sunday had reported that US-based KKR had held talks with NMC Health senior executives in the past few weeks. GK Investment, which has made a separate approach to NMC Health, is a Switzerland-based investment company.
NMC on Monday said no proposal has been made by either KKR or GK, and there have been no discussions as to the terms of any possible offer. Further, "there can be no certainty that any offer will be made," NMC added.
Back in December, US short selling firm Muddy Waters Capital accused NMC of manipulating its balance sheet to understate debt, which the company firmly denied.
"Taking the business private might be the best thing to happen to NMC as it has lost credibility with the market, and it will take a lot to rebuild trust with investors," said AJ Bell's Russ Mould.
At the other end of the large-cap index, Whitbread was down 1.2% after Goldman Sachs downgraded the Premier Inn chain owner to Sell from Neutral.
Elsewhere, intu Properties was up 22% after the shopping mall operator confirmed plans to raise equity at the end of February when its 2019 financial results are released. intu made the statement after the Sunday Times reported Asian property firm Link Real Estate Investment Trust was to "ride to the rescue" of intu.
The Lakeside shopping centre owner confirmed Link Real Estate, which is listed in Hong Kong, was part of the negotiations, which would see it become a new shareholder in intu.
The company said talks with existing shareholders including Peel Group are "constructive". Peel Group, which owns 27% of intu, is owned by businessman John Whittaker.
The pound was quoted at USD1.2920 at midday, firm from USD1.2907 at the London equities close Friday. The euro stood at USD1.0945, flat from USD1.0948 at the European equities close Friday.
Against the yen, the dollar was trading at JPY109.75 at midday, unchanged from late Friday.
Stocks in New York were set for a flat to slightly higher open amid the coronavirus concerns. The DJIA and the S&P 500 index were both called flat and the Nasdaq Composite was called up 0.1%.
Meanwhile, US President Donald Trump will propose cutting billions of dollars in foreign aid in his fiscal 2021 budget, to be released on Monday.
The budget plan is expected to request USD2 billion in homeland security spending for the US-Mexico border wall, with the summary reportedly saying 400 miles of wall would be completed by the end of 2020. The proposed budget will go before Congress, which is not required to agree to the White House's requests.
According to Bloomberg News, the USD4.8 trillion plan includes USD740.5 billion for military and a 5% cut in non-defense spending.
Brent oil was quoted at USD54.24 a barrel at midday, down from USD54.86 at the London equities close Friday.
Gold was quoted at USD1,572.88 an ounce at midday, up from USD1,567.40 late Friday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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