(Alliance News) - The FTSE 100 ended lower on Tuesday as investors remained nervous over the coronavirus outbreak.
London's blue-chip index did, though, manage to outperform European peers, which recorded far steeper losses, thanks to a weaker pound ahead of Wednesday's UK budget.
The FTSE 100 closed down 5.54 points, or 0.1%, at 5,960.23, having traded as high as 6,231.06 in the morning. On Monday, the index plummeted 7.7%.
The FTSE 250 ended broadly flat at 17,547.05, and the AIM All-Share closed up 5.25 points, or 0.7%, at 806.15.
The Cboe UK 100 ended down 0.2% at 10,130.28, the Cboe UK 250 closed down 0.1% at 15,607.97, and the Cboe Small Companies ended down 0.2% at 10,816.94.
In European equities on Tuesday, the CAC 40 in Paris ended down 1.5%, while the DAX 30 in Frankfurt finished 1.4% lower.
"Markets, particularly in Europe, have been unable to hold on to gains, with wild intraday swings continuing to dominate the trading day," said IG's Chris Beauchamp.
"Ultimately, governments and central banks still look like they are playing catch-up to a fast-moving situation, and there is a weary sense that Thursday's ECB meeting could go the same way," Beauchamp added.
"Italy's plight looks to be the template for the rest of Europe, while IAG's move to suspend flights to Italy will have others following suit, and a broader European shutdown of flights is probably only a matter of time."
Travel has been restricted across Italy and public gatherings forbidden throughout the country as the government signed off on strict quarantine measures to fight the spread of the new coronavirus.
The unprecedented measures, in place until April 3, were extended from several large areas of the north to Italy's entire population of more than 60 million in a decree signed Monday night.
Since Covid-19 first emerged in China late last year, Italy has become Europe's hardest-hit country and has seen a rapid rise in cases to more than 9,000, with 463 deaths so far.
And in the UK, the start of a domestic coronavirus peak is expected within the next fortnight, England's deputy chief medical officer has said, as cases rose to 373 and a sixth death was announced.
Oil majors had been leading the FTSE 100 higher earlier on Tuesday, with Royal Dutch Shell shares trading up more than 10%, but closed with more modest gains.
Shell 'A' shares closed up 4.1% and 'B' shares up 3.9%. BP closed up 3.4%.
The energy stocks were rebounding after a plummet on Monday in the wake of a Saudi oil price war.
Russia refused to agree to a proposal by OPEC ministers led by Saudi Arabia for a drastic cut of 1.5 million barrels per day, with Russian oil companies fearing loss of market share and of competitiveness against US shale production.
Heavyweight producer Saudi Arabia responded on Sunday with the biggest cut in its prices of the past 20 years in a bid to win market share.
Brent oil was quoted at USD36.63 a barrel at the London equities close Tuesday, firm from USD36.22 late Monday and off its worst recent level of USD31.26, reached at the start of the week following the Saudi decision.
Amid the shaky mood, safe haven asset gold failed to gain traction. Gold was quoted at USD1,655.61 an ounce against USD1,668.05.
Another safe haven, the Japanese yen, also slipped back. Against the yen, the dollar was trading at JPY103.94 compared to JPY102.10 late Monday.
Elsewhere in forex, the pound was quoted at USD1.2942, down compared to USD1.3119. The euro stood at USD1.1342 against USD1.1462.
"A big loser from today's session has been sterling, retreating against the US dollar and the euro too. Tomorrow's Budget also risks disappointing investors expecting a blockbuster response to the crisis, even if the Bank of England makes a surprise move on rates at the same time," said IG's Beauchamp.
Stocks in New York were higher at the London equities close, with the Dow Jones up 0.7%, the S&P 500 index up 0.9%, and the Nasdaq Composite up 1.2%.
In London, Informa shares closed up 6.0% as the business events and publishing company reported a strong 2019 but refrained from giving guidance for 2020 due to Covid-19 uncertainty.
For the recent year, Informa reported a 13% rise in pretax profit to GBP318.7 million. On an adjusted basis, pretax profit rose by 26% year-on-year to GBP821.4 million, above consensus of GBP809.5 million.
The higher profit figure was driven by strong revenue growth of 22% to GBP2.89 billion, also ahead of market forecasts of GBP2.86 billion.
Looking ahead, Informa has implemented its Covid-19 action plan, which includes a programme to reschedule or cancel events. So far, the group is looking to reschedule 45 large events, which together account for budgeted revenue of GBP350 million.
easyJet closed up 2.6% after receiving upgrades from both Bank of America and Bernstein. BofA raised the budget airline to Buy from Neutral, while Bernstein raised the stock to Outperform from Market Perform.
Among the losers was Meggitt, ending down 3.8% after Berenberg cut the stock to Hold from Buy.
In the FTSE 250, Ultra Electronics closed up 8.4% as it said Covid-19 is not currently hampering trading.
The defence & aerospace, security, transport and energy reported 2019 pretax profit of GBP91.0 million, more than doubled from GBP42.6 million. This was on revenue which climbed 7.7% to GBP825.4 million.
Ultra Electronics ended the year with a "healthy" order book which stood at GBP1.02 billion, a 4.0% year-on-year rise. The company added although the duration and full impact of the Covid-19 spread is uncertain, the contagion is not currently hindering trading.
French Connection shares slumped 24% after the struggling fashion brand reported a narrowed full-year loss, but sales fell.
In the year ended January 31, French Connection's revenue from continuing operations fell 11% to GBP119.9 million. Its pretax loss was trimmed to GBP7.3 million from GBP8.6 million. Operating expenses were 20% lower at GBP57.2 million.
Like-for-like sales in UK & Europe were down 2.5% year-on-year, a reflection of tough "trading conditions on the High Street generally in the second half of the year".
In the UK corporate calendar on Wednesday, there are full-year results due from valves and pumps manufacturer Spirax-Sarco Engineering, life insurance and financial services firm Prudential, security firm G4S, Old Mutual spin-off Quilter, and construction firm Balfour Beatty.
In the economic calendar on Wednesday, there is a UK GDP reading at 0930 GMT followed by US inflation at 1230 GMT.
In focus will be the UK budget at 1230 GMT.
"The Chancellor looks set to unveil measures to help firms affected by the coronavirus outbreak in Wednesday's budget, but markets will be more interested in any coordinated Bank of England action. That may not take the form of a rate cut this week (although it's only a matter of time), but some targeted schemes to help reach affected firms are possible," said ING.
By Lucy Heming; lucyheming@alliancenews.com
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