(Alliance News) - London stocks staged a rebound early Wednesday on the prospect of stimulus from China to offset disruption from the spread of coronavirus.
Helping to push the blue-chip FTSE 100 index higher were housebuilder Berkeley Group and British Airways parent International Consolidated Airlines.
The FTSE 100 was up 45.59 points, or 0.6%, at 7,427.60 early Wednesday. The large-cap index had closed down 0.7% on Tuesday.
The mid-cap FTSE 250 index was up 69.07 points, or 0.3%, at 21,747.53. The AIM All-Share index was up 0.3% at 966.92.
The Cboe UK 100 index was up 0.8% at 12,578.43. The Cboe 250 was up 0.2% at 19,590.47, and the Cboe Small Companies flat at 12,447.61.
In mainland Europe, the CAC 40 in Paris was up 0.3% while the DAX 30 in Frankfurt was also 0.3% higher early Wednesday.
"There was a rebound in risk sentiment during the Asian trading session on reports that China may bail out its airline industry badly hit by the coronavirus outbreak, and a broader sense that authorities will provide support for the economy," said Lloyds Bank.
Lloyds also noted: "The number of deaths in China exceeded 2,000, although the rate of increase in new cases in Hubei province, where the pandemic began, may be slowing."
New figures showed the coronavirus death toll in China has surged beyond 2,000 with more than 74,000 infected. Hundreds more cases have been reported in two dozen countries.
South Korea reported 15 new confirmed cases – increasing its total by nearly 50% – including a cluster of at least 11 centred on the southern city of Daegu. Hong Kong reported a second death.
While China announced Wednesday there were 1,749 new infections, this was the lowest number of new cases this month. All but 56 new cases were in the epicentre of Hubei province.
In Asia on Wednesday, the Japanese Nikkei 225 index ended up 0.9%. In China, the Shanghai Composite closed down 0.3%, while the Hang Seng index in Hong Kong finished up 0.5%.
At the top of the FTSE 100 was Berkeley Group, up 3.3% after HSBC raised the housebuilder to Buy from Hold.
IAG was up 1.3% after Qatar Airways said it has increased its stake in the British Airways parent to 25.1%.
This was from the 21.4% stake held by the Qatari government-owned airline previously.
"Our investment to date has been highly successful, and the announced increase in our shareholding is evidence of our continued support of IAG and its strategy," said Qatar Airways Chief Executive Akbar Al Baker.
Moneysupermarket.com was down 1.3% after saying CEO Mark Lewis has indicated he intends to step down from the role and pursue his career in a "new direction".
No date for his departure has been set, but Lewis has said he wishes to ensure a "smooth" transition to his successor. The company has started a formal search process for his replacement, looking at both internal and external candidates.
He, along with Chief Financial Officer Scilla Grimble, will present the price comparison site's results for 2019 as scheduled on Thursday, and the group will announce that these met market expectations.
Meanwhile, Metro Bank slipped 1.9% after confirming Dan Frumkin as CEO with immediate effect.
Frumkin has been working as Metro's interim CEO since the start of the year, having joined in September 2019 as chief transformation officer. Prior to this, he spent eight years at Bermuda-based Bank of NT Butterfield & Son and has held roles at RBS and Northern Rock.
"The combination of three decades of experience across retail banking and the positive impact he has made since joining Metro Bank last year mean we have identified an impressive CEO to take Metro Bank into its second decade. I look forward to working with Dan as we deliver the next chapter," said Chair Michael Snyder.
Sky News on Tuesday had reported the UK challenger bank was under pressure from the City to make Frumkin's role permanent.
RPS shares traded 15% lower in early dealings. The consulting services firm reported a sharp fall in profit for 2019 as it also reported the departure of its finance director.
Revenue for the year was slightly lower at GBP612.60 million from GBP637.4 million, but pretax profit slumped to GBP4.8 million from GBP41.0 million.
The main driver of this was GBP23.4 million taken in exceptional items, of which GBP19.8 million related to a goodwill impairment in its Australia Asia Pacific segment.
In line with a previous rebasing announcement, RPS said proposed a final dividend of 2.0p, down from 5.08p a year ago, to take the full-year payout to 4.42p versus 9.88p.
"In FY2019 we had to contend with several headwinds which significantly impacted on the results. We responded to difficult trading conditions, particularly in our Australia Asia Pacific segment. Pleasingly, we saw some stabilisation of market conditions in the UK and elsewhere towards the end of the year," said CEO John Douglas.
Douglas continued: "As we enter 2020, trading conditions in our markets are generally satisfactory and we anticipate more stable results from our segments...The board remains confident in the medium term outlook for the group and anticipates that the year ahead will be broadly in line with 2019 with growth accelerating in 2021."
Separately, RPS said that Gary Young has decided to retire from the group after serving as finance director for 20 years. He will step down on April 30, the company's annual general meeting, and be succeeded by RPS's strategy director Judith Cottrell.
In Wednesday's economic calendar there is UK inflation at 0930 GMT and US producer prices at 1330 GMT, followed by minutes from the last Federal Reserve meeting at 1900 GMT.
FXStreet consensus sees the annual UK inflation rate at 1.6% in January, accelerating from 1.3% the month before. Month-on-month, prices are expected to fall 0.4% after a flat reading for December.
"Today's CPI number is likely to tick higher due to the rise in train fares, but heavy discounts offered by the retailer due to deprived December sales period may offset some of that effect," said Naeem Aslam at AvaTrade.
Ahead of the UK inflation data, sterling was quoted at USD1.3006 early Wednesday, lower than USD1.3021 at the London equities close on Tuesday.
Elsewhere in forex, the euro traded at USD1.0803 early Wednesday, down from than USD1.0817 late Tuesday. Against the yen, the dollar was quoted at JPY110.09, up from JPY109.81.
In commodities, gold was quoted at USD1,606.83 an ounce early Wednesday, up versus USD1,602.83 on Tuesday. Brent oil was trading at USD58.22 a barrel early Wednesday, up from USD57.08 late Tuesday.
By Lucy Heming; lucyheming@alliancenews.com
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