LONDON MARKET CLOSE: FTSE 100 Trades At Six-Week Lows Over Virus Fears

(Alliance News) - London stocks slumped on Monday, in line with counterparts in mainland Europe, as fears over the spread of coronavirus in China rattled markets.

Travel, luxury and energy stocks were all among the worst performers on Monday as worries grew over the hit the virus could cause to the world's second largest economy.

The FTSE 100 index closed down 173.93 points, or 2.3% at 7,412.05 on Monday, having hit a six-week low of 7,392.83 during the session.

The FTSE 250 ended down 460.27 points, or 2.1%, at 21,303.67, and the AIM All-Share closed down 12.88 points, or 1.3%, at 953.03.

The Cboe UK 100 ended down 2.4% at 12,558.99, the Cboe UK 250 closed down 1.9% at 19,261.23, and the Cboe Small Companies ended down 0.5% at 12,398.69.

"The rebounding confidence seen last Friday was long gone this Monday, the markets seriously struggling as fears surrounding the coronavirus outbreak intensified," said Connor Campbell at Spreadex.

"From a bad start the European indices only got worse as the session went on, dealt an extra blow by a lower than forecast German Ifo business climate reading, one that served to undermine hopes of an economic turnaround in the country," he added.

Beijing authorities on Monday reported the Chinese capital's first death from a new deadly virus that has rapidly spread across the country, killing more than 80 people and causing global alarm.

The victim was a 50-year-old man who had visited the central city of Wuhan, the epicentre of the outbreak, on January 8 and developed a fever after returning to Beijing seven days later, the city's health commission said.

The authorities have enacted sweeping travel restrictions across the country in a desperate bid to stop the virus from spreading further. Transport bans have been enacted in Wuhan and other cities in central Hubei province, effectively corralling some 56 million people.

President Donald Trump on Monday said the US was offering to help China in combatting the spread of a virus that has sparked fears of global contagion.

In European equities on Monday, the CAC 40 in Paris ended down 2.7%, while the DAX 30 in Frankfurt also ended 2.7% lower.

In Germany, the Ifo Institute reported that business conditions weakened in January.

The Ifo business climate index reading for January was 95.9, down from 96.3 in December. The December score had been a six-month high, rising from 95.1 in November.

The current conditions index score was 99.1 in January, up from 98.8 in December, which had climbed from 98.0 the month prior.

The euro stood at USD1.1020 at the European equities close Monday, soft against USD1.1025 at the same time on Friday.

The pound was quoted at USD1.3056 at the London equities close Monday, also down compared to USD1.3068 at the close on Friday.

Safe haven currency the Japanese yen strengthened, however. Against the yen, the dollar was trading at JPY108.93, down compared to JPY109.36 late Friday.

Stocks in New York were in the red at the London equities close, with the Dow Jones down 1.5%, the S&P 500 index also 1.5% lower, and the Nasdaq Composite down 1.9%.

Brent oil was hit by worries over demand on Monday. Brent was quoted at USD58.90 a barrel at the London equities close Monday from USD60.72 late Friday.

"The energy market is closely linked to the perceived economic health of China – the largest importer of oil in the world. Dealers are exiting the energy market on fears that China's demand for oil will wane on account on health situation," said David Madden at CMC Markets.

This knocked shares in in Royal Dutch Shell, the largest London-listed company by market capitalisation. Shell 'A' shares shed 2.1% and 'B' shares 2.5%. Fellow oil major BP closed down 1.9%.

Gold, however, rose amid Monday's risk-off mood. The safe haven was quoted at USD1,582.00 an ounce at the London equities close Monday against USD1,571.18 at the close on Friday.

Elsewhere in London, travel stocks were among the worst hit on Monday on worries that the coronavirus outbreak will dent tourism, particularly to Asia.

Cruise operator Carnival ended down 4.7% while British Airways parent International Consolidated Airlines shed 5.4%. Intercontinental Hotels Group fell 5.0%.

Miners also ended lower, with Rio Tinto down 5.2%, Anglo American down 4.8% and Antofagasta down 4.3%.

Luxury retailer Burberry, highly exposed to the Chinese consumer, closed down 4.6% with French peers LVMH and Kering shedding 3.7% and 3.6% respectively.

In the FTSE 250, China-focused investment trust Fidelity China Special Situations ended down 6.5%.

Elsewhere in the mid-cap index, RHI Magnesita closed down 5.7% after the UK Competition & Markets Authority said it will look into the firm's purchase of Turkish mining company Kumas Manzeyit Sanayi.

The regulator said it is considering whether the acquisition may result in a "substantial lessening" of competition within the any market in the UK.

Amigo Holdings dived 24% after launching a strategic review and formal sale process.

The review will be looking into the lender's "strategy, ownership and operating model". Amigo said it is considering the potential sale of the company as a whole, the sale of parts of the group, the sale of the UK business, and a potential de-listing of the company's shares.

Amigo - which provides loans to consumers, payments for which are guaranteed by a borrower's friend or family member - said controlling shareholder Richmond Group is a "willing seller" of its 60% stake.

In the UK corporate calendar on Tuesday, there are full-year results from housebuilders Crest Nicholson and McCarthy & Stone.

There are interim results from consumer goods company PZ Cussons, and trading statements from soft drinks maker AG Barr and lender Virgin Money UK. There are first quarter results from fresh food maker Greencore group.

In the economic calendar on Tuesday, there are Irish retail sales at 1100 GMT and US durable goods orders at 1330 GMT, with consumer confidence due at 1500 GMT.

By Lucy Heming; lucyheming@alliancenews.com

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