(Alliance News) - The FTSE 100 on Thursday quickly reversed the minor gains achieved on Wednesday, sinking as the coronavirus outbreak continued to spread outside of China.
Travel stocks continued to weigh on London's blue-chip index, while WPP was the biggest faller in the index following the release of its annual results.
The FTSE 100 was down 175.21 points, or 2.5%, at 6,867.26 early Thursday, bringing the week's losses so far for the index to more than 7%. The index closed up 0.4% on Wednesday, a brief respite from the week's otherwise bruising losses.
The mid-cap FTSE 250 index was down 404.82 points, or 2.0%, at 20,218.13 in early trade, and the AIM All-Share index was down 1.6% at 896.97.
The Cboe UK 100 index was down 2.5% at 11631.82. The Cboe 250 was down 1.9% at 18209.87, while the Cboe Small Companies was flat at 12067.21.
In mainland Europe, the CAC 40 in Paris was down 2.2% and Frankfurt's DAX 30 tumbled 2.1%.
"Investors are highly concerned about the impact of coronavirus on global growth. Obviously, without any vaccine on the market, traders aren't going to feel comfortable and the equity markets are likely to remain rattled," said Naeem Aslam at AvaTrade.
"Yesterday's session was intriguing because the US equity markets did start the day on a positive note however, the optimism started to fade away on the back of more cases of coronavirus cases. Clearly, the market is highly sensitive and everything is pretty much headline-driven," said Aslam.
Sentiment turned as the US Centre for Disease Control reported a coronavirus case in California in someone who "did not have relevant travel history or exposure to another known patient" – meaning it could represent the first instance of "community spread" in the US, though this was not yet confirmed.
Meanwhile, Germany's health minister warned that the country is "at the beginning of a coronavirus epidemic".
This came as Romania, Greece and neighbouring North Macedonia registered their first confirmed virus cases on Wednesday, involving people who recently travelled to Italy's afflicted north. The first cases reported in Austria, Croatia and Switzerland on Tuesday also had travel ties to northern Italy.
In Asia on Thursday, the Nikkei 225 index slumped 2.1% in Tokyo. In China, the Shanghai Composite ended up 0.1%, while the Hang Seng index in Hong Kong rose 0.3%.
Gold was quoted at USD1,648.61 an ounce early Thursday, up from USD1,637.00 on Wednesday.
The Japanese yen, another safe haven, also was higher. Against the yen, the dollar was quoted at JPY110.05, down from JPY110.52.
Oil, meanwhile, was trading around its lowest levels since December 2018. Brent oil was trading at USD52.69 a barrel early Thursday, lower than USD54.45 late Wednesday in London.
Sterling was quoted at USD1.2919 early Thursday, flat on USD1.2920 at the London equities close on Wednesday. The euro traded at USD1.0932 early Thursday, higher than USD1.0866 late Wednesday.
London-listed travel stocks continued to be hammered on demand worries amid the virus outbreak, with easyJet down 8.9% - though also ex-dividend on Thursday - while TUI sank 5.2% and Ryanair by 4.9%.
The FTSE 250 travel & leisure sector has been the worst performing one this week, down 12% so far.
At the bottom of the FTSE 100 was WPP, down 17% after it reported a slump in profit for 2019.
Revenue for 2019 was up 1.4% to GBP13.23 billion, but pretax profit slumped 22% to GBP982 million. Like-for-like billings fell 1.0%.
Headline profit before interest and tax was down 5.8% to GBP1.62 billion.
"We said that we would make progress in the journey to return WPP to growth, simplifying our business and reducing our debt, and we have delivered against each of these goals - having met our guidance for 2019, achieved our restructuring targets and completed the sale of a majority stake in Kantar. The second half of 2019 was stronger than the first, with performance improving globally and in the United States, our largest market," said Chief Executive Mark Read.
At the top of the FTSE 100 was British American Tobacco, up 1.3%
The cigarette maker's revenue for 2019 was up 5.7% to GBP25.88 billion, but pretax profit fell to GBP7.91 billion from GBP8.35 billion.
Total cigarette and tobacco heating products volumes declined 4.4% to 677 billion sticks, with cigarette volumes down 4.7% and THP volumes up 32%.
For 2020, BAT said it expects global industry cigarette and THP volumes to be down 4%, with adjusted revenue growth in the 3% to 5% guidance range. Adjusted revenue grew 5.6% at constant currency in 2019.
Reckitt Benckiser was down 3.8% as it swung to a loss on a hefty impairment of recent US acquistion Mead Johnson Nutrition.
Net revenue was up 2.0% for 2019 to GBP12.85 billion, with like-for-like growth of 0.8%. The group swung to a pretax loss of GBP2.11 billion versus a profit of GBP2.72 billion the year, however, hit by a GBP5.04 billion impairment of goodwill in respect of the Mead Johnson Nutrition acquisition.
Reckitt bought US baby food maker Mead Johnson Nutrition for GBP13.2 billion in 2017.
Adjusted operating profit was down 0.1% at GBP3.37 billion. The adjusted operating margin fell 50 basis points to 26.2%.
Despite swinging to a loss, Reckitt upped its dividend for the year by 2.3% to 174.6p from 170.7p.
Looking to 2020, Reckitt said it expects a better pace of like-for-like growth with the year off to a "strong start", though the environment is uncertain given the coronavirus outbreak.
Persimmon fell 3.8% amid a dip in profit and the planned departure of its chief executive.
Revenue in 2019 was down 2.4% to GBP3.65 billion. Pretax profit dipped to GBP1.04 billion from GBP1.09 billion in 2018. The firm sold 15,855 new homes, down 4%, though at a higher average selling price of GBP215,709 versus GBP215,563.
The level of customer activity through the initial weeks of 2020 has been "encouraging", said Persimmon, with sales rates tracking above prior years.
Separately, Persimmon said David Jenkinson intends to step down as CEO "in due course". He has signalled his intention early to give the board ample time to find a successor.
Jenkinson has only been in the role for a little over a year. He was made interim CEO in November 2018, promoted from managing director, and confirmed as permanent CEO in February 2019. Jenkinson replaced Jeff Fairburn, who had stepped down amid "distraction" over his hefty pay packet.
NMC Health shares were suspended from trading after the beleaguered UAE-focused healthcare firm said late Wednesday it had removed Prasanth Manghat as chief executive officer.
In January, NMC asked Freeh Group International Solutions, founded by former US federal judge and FBI director Louis Freeh, and law firm Glaser Weil to provide a independent report addressing allegations raised by short-selling firm Muddy Waters Capital.
Muddy Waters in 2019 raised doubts over NMC's financial statements, including reported profit and levels of debt.
The Abu Dhabi-based company on Wednesday said the independent review found discrepancies and inconsistencies in ledger entries and bank statements, and it has suspended a member of the treasury team until the review has been completed.
The economic events calendar on Thursday has US personal consumption expenditures data and a gross domestic product estimate at 1330 GMT.
By Lucy Heming; lucyheming@alliancenews.com
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