(Alliance News) - London stocks advanced on Monday, despite further coronavirus cases being reported, on hopes of stimulus from China to ease pressure from the spread of the disease.
The FTSE 100 index closed up 24.12 points, or up 0.3%, at 7,433.25. The FTSE 250 ended up 36.26 points, or 0.2%, at 21,826.34, and the AIM All-Share closed up 3.25 points, or 0.3%, at 968.96.
The Cboe UK 100 ended up 0.4% at 12,592.13, the Cboe UK 250 closed up 0.2% at 19,690.00, and the Cboe Small Companies ended down 0.3% at 12,452.48.
In European equities on Monday, the CAC 40 in Paris ended up 0.3%, while the DAX 30 in Frankfurt also ended 0.3% higher.
Though Germany's DAX posted just modest gains for the session, the index did hit an all-time high of 13,795.24 in early trade on Monday.
This came amid China mulling the postponement of its annual parliament session as the country battles to control the outbreak of the new coronavirus.
More than 70,000 people have been infected by the epidemic in mainland China, which started in central Hubei province and has spread across China and to other countries. It has claimed 1,770 lives and prompted the closure of many schools, entertainment venues and large-scale events across China.
There were 115 fresh cases outside the central province, according to the commission on Monday – sharply down from nearly 450 a week ago. Most cases are still in Hubei, where nearly 2,000 were reported Monday.
"The numbers we're seeing are already pretty dreadful - to say the least - and they're continuing to rise, with the death toll above 1,700. That's more than double SARS and it's still rising at a fairly rapid rate. When you consider that only a few weeks ago people were fearing it could be as bad, the reality is really quite shocking," said Craig Erlam at Oanda.
Despite this, stocks in Europe rose on Monday.
"Investors have been buoyed by a rate cut and liquidity injection from the PBOC, while the government is poised to announce tax cuts and spending to offset the economic damage," explained Erlam.
On Monday, the People's Bank of China offered CHY200 billion, or USD29 billion, of one-year medium-term loans at a 3.15% interest rate, 10 basis points lower than previously. It also added CHY100 billion to money markets through reverse repurchase agreements.
The news saw stocks in China surge overnight, with the Shanghai Composite ending up 2.3%, but trade was more subdued in Europe given markets in the US are closed for Presidents' Day on Monday.
Also being monitored in the wake of the coronavirus outbreak is Japan's economy.
The nation's gross domestic product in the three months to December shrank 1.6% from the previous quarter, even before the novel coronavirus outbreak in China hit Japan, according to official data published on Monday.
The quarter was marked by a rise in consumption tax from eight percent to 10%, as well as Typhoon Hagibis, which killed more than 100 people and caused widespread flooding.
Economists are now carefully watching to see what impact coronavirus will have on the world's third-largest economy, as it hits Japanese companies' manufacturing activities and tourism.
"Investors are looking past the fourth quarter of 2019, and there is concern that the coronavirus may spur another quarterly contraction, with tourism and trade being hit," said Marc Chandler, managing director at Bannockburn Global Forex.
The Japanese yen weakened on the data. Against the yen, the dollar was trading at JPY109.91 compared to JPY109.77 late Friday.
Elsewhere in forex, sterling was quoted at USD1.3013 at the London equities close Monday, compared to USD1.3028 at the close on Friday. The euro stood at USD1.0836 at the European equities close Monday, against USD1.0842 at the same time on Friday.
In commodities, Brent oil was quoted at USD57.34 a barrel at the London equities close Monday from USD57.15 late Friday. Gold was quoted at USD1,582.14 an ounce at the London equities close Monday against USD1,581.60 at the close on Friday.
In London, NMC Health closed up 3.0% after the FTSE 100 constituent reported a slate of board departures including the resignation of founder and joint Non-Executive Chair Bavaguthu Raghuram Shetty.
The departures comes as NMC tries to unravel the shareholdings of some of its major investors.
The Abu Dhabi-based hospital operator said Shetty, who had been banned from attending board meetings for inaccurately reporting shareholdings in the company, has resigned with immediate effect. Mark Tompkins will continue as the sole non-executive chair, NMC said.
The FTSE 100-listed company also separately announced the departures of Chief Investment Officer Hani Buttikhi and Director Abdulrahman Basaddiq. Their resignations are with immediate effect.
At the bottom of the FTSE 100 was SEGRO, closing down 3.2% after Deutsche Bank cut the real estate investor to Hold from Buy.
In the FTSE 250, Jupiter Fund Management ended up 3.5% after confirming a potential GBP370 million all-share deal for Merian Global Investors.
Jupiter will be issuing Merian shareholders 95.4 million shares, giving Merian shareholders an approximate 17% stake in the combined company. There is also an additional deferred payment of up to GBP20 million depending on performance targets being met.
Merian had assets under management of GBP22.4 billion as of the end of 2019, and the merger will create a company with assets of GBP65 billion.
Tullow Oil slipped 2.9% as it reported disappointing drilling results at the Marina-1 exploration well off the coast of Peru.
The well did not find any "significant" hydrocarbons, Tullow said. It was testing the La Cruz and Mal Pelo formations, with some minor gas shows found but no discoveries in the main targets.
Tullow said the well was drilled to a total depth of 3,022 metres, in water 362 metres deep. Marina-1 will now be plugged and abandoned. Tullow has a 35% interest in the well, which is operated by Karoon Energy with a 40% stake. Pitkin Petroleum holds the remaining 25%.
In the corporate calendar on Tuesday, lender HSBC reports full-year results at 0400 GMT. Later in the morning are earnings from miner Glencore, Holiday Inn owner InterContinental Hotels Group and Richmond sausage maker Kerry.
In Tuesday's economic calendar, there are UK average earnings and the unemployment rate due at 0930 GMT, and the ZEW economic sentiment survey for Germany is at 1000 GMT.
By Lucy Heming; lucyheming@alliancenews.com
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Tullow Oil (TLW)
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