London close: Stocks bounce after roller coaster session of trading

(Sharecast News) - Investors endured a roller coaster-like trading session on Monday, although London's top-flight index did manage to start the month of March with a small bounce, as hopes of central bank stimulus helped to offset ongoing concerns about the impact of the coronavirus.
The FTSE 100 finished ahead by 1.13% at 6,654.89 even as the Organization for Economic Co-operation and Development said the global economy is facing its biggest threat since the financial crisis and cuts its 2020 growth forecasts in the wake of the coronavirus outbreak.

In a best-case scenario, with only limited outbreaks outside of China, the OECD is still predicting what it called a "sharp" slowdown in world growth in the first half. Prompted by supply chain disruption, a fall in tourism and weakened confidence, economic growth is now expected to be 2.4% in 2020, compared to 2.9% in 2019.

In November, the OECD pencilled in growth of 3% for 2020. Global growth below 2.5% is traditionally regarded as recession.

However, a broader contagion spreading across Asia-Pacific and advanced economies could see global growth fall even further, the OECD warned, to just 1.5%, as some regions - including Japan and the eurozone - slip into recession.

The report came as the Bank of England said it was working with the Treasury and international partners "to ensure all necessary steps are taken to protect financial and monetary stability" in the face of the virus outbreak.

Both the Bank of Japan and the US Federal Reserve have also pledged to act to support the economy if necessary, while Italy said it will inject €3.6bn into its economy to help cope with the impact of the coronavirus.

Following an early slump in stock markets on Monday, the Bank of Japan said in a statement that it will "monitor developments carefully, and strive to stabilise markets and offer sufficient liquidity via market operations and asset purchases".

This followed an emergency statement from the Fed on Friday, which helped to ensure a positive finish for US stocks. Chairman Jerome Powell said the central bank was "closely monitoring" the coronavirus outbreak and its potential impact on economic growth.

Powell said economic fundamentals were still strong but risks from the outbreak were evolving. "We will use our tools and act as appropriate to support the economy," he said.

Investors were also mulling dismal data out of China. The Caixin/Markit purchasing managers' index declined to 40.3 in February from 51.1 in January, missing consensus expectations for a reading of 45.7 and hitting the lowest level since records began in April 2004.

Over the weekend, official data showed that China's manufacturing PMI slumped to 35.7 in February from 50.0 in January, marking its worst level on record. Meanwhile, the non-manufacturing PMI printed at 29.6, down from 54.1.

"The shocking reports hammer home the view the global economy could undergo a sizeable economic cooling. China is the workshop of the world so when they undergo a huge shock, the ripple out effect will be big," said CMC Markets analyst David Madden.

On the UK macro front, figures released earlier showed the manufacturing sector grew at its fastest rate in ten months in February but that the coronavirus has started to cause some disruption.

The IHS Markit/CIPS manufacturing purchasing managers' index rose to 51.7 in February from 50.0 the month before, but was below expectations for a reading of 51.9.

In corporate news, British Airways and Iberia parent IAG was under the cosh again following heavy losses a week earlier, as investors continued to fret about the impact of the coronavirus on airlines and the travel sector more generally. A note by Berenberg added to the downside as the bank slashed its price target on the stock to 620p from 700p and downgraded its revenue forecasts but kept its 'buy' rating.

Cruise operator Carnival was also in the red, along with budget airline easyJet and Premier Inn owner Whitbread.

Market Movers

FTSE 100 (UKX) 6,654.89 1.13%
FTSE 250 (MCX) 19,301.70 -0.15%
techMARK (TASX) 3,794.18 0.78%

FTSE 100 - Risers

Hikma Pharmaceuticals (HIK) 1,899.00p 6.21%
Rentokil Initial (RTO) 513.20p 6.03%
Ocado Group (OCDO) 1,119.50p 5.22%
Morrison (Wm) Supermarkets (MRW) 180.10p 5.17%
Experian (EXPN) 2,707.00p 4.48%
Sainsbury (J) (SBRY) 204.30p 4.37%
GlaxoSmithKline (GSK) 1,630.00p 4.34%
London Stock Exchange Group (LSE) 7,888.00p 4.12%
Scottish Mortgage Inv Trust (SMT) 583.00p 3.92%
BP (BP.) 411.25p 3.81%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 433.10p -8.24%
Carnival (CCL) 2,333.00p -4.19%
Barclays (BARC) 143.30p -3.66%
Whitbread (WTB) 3,759.00p -3.47%
easyJet (EZJ) 1,062.50p -3.45%
Royal Bank of Scotland Group (RBS) 172.50p -3.44%
Informa (INF) 659.60p -3.34%
Melrose Industries (MRO) 203.40p -2.87%
Evraz (EVR) 317.60p -2.67%
M&G (MNG) 193.60p -2.62%

FTSE 250 - Risers

Smithson Investment Trust (SSON) 1,210.00p 6.14%
Centamin (DI) (CEY) 134.85p 4.58%
Senior (SNR) 147.10p 4.18%
Hiscox Limited (DI) (HSX) 1,276.00p 4.08%
JPMorgan American Inv Trust (JAM) 462.00p 3.94%
Jupiter Fund Management (JUP) 311.80p 3.93%
Polar Capital Technology Trust (PCT) 1,536.00p 3.92%
European Opportunities Trust (JEO) 804.00p 3.88%
Primary Health Properties (PHP) 150.20p 3.73%
Worldwide Healthcare Trust (WWH) 3,010.00p 3.61%

FTSE 250 - Fallers

Finablr (FIN) 52.50p -14.08%
Aston Martin Lagonda Global Holdings (AML) 291.00p -13.91%
Cineworld Group (CINE) 138.45p -10.76%
SSP Group (SSPG) 475.50p -6.61%
PPHE Hotel Group Ltd (PPH) 1,630.00p -6.32%
G4S (GFS) 160.50p -6.22%
Hammerson (HMSO) 196.00p -6.04%
Helios Towers (HTWS) 115.00p -5.97%
Hyve Group (HYVE) 72.80p -5.82%
Pagegroup (PAGE) 383.00p -5.76%