(Alliance News) - Stocks in London ended sharply higher on Friday despite chaos caused by the coronavirus outbreak in China, as the World Health Organisation stopped short of declaring a global emergency.
Chinese authorities expanded a massive quarantine effort covering 13 cities on Friday to contain the deadly virus as nervous residents were checked for fevers and the death toll climbed to 26.
With more than 800 cases logged in China so far, a range of Lunar New Year festivities have been cancelled, with temporary closures of Beijing's Forbidden City, Shanghai's Disneyland and a section of the Great Wall to prevent the disease from spreading further.
The World Health Organization said China faced a national emergency but refrained from declaring a global health emergency, which would have prompted greater global cooperation.
The FTSE 100 index closed up 78.31 points, or 0.1% at 7585.98, ending the week down 1.2%.
The FTSE 250 ended up 223.38 points, or 1.0% at 21,000.94, ending the week down 0.6%, and the AIM All-Share closed up 2.58 points, or 0.3% at 965.91, ending the week down 0.1%.
The Cboe UK 100 ended up 1.1% at 12,862.46.81, the Cboe UK 250 closed up 1.0% at 19,632.50, and the Cboe Small Companies ended flat at 12,464.57.
In Paris the CAC 40 ended up 0.9%, while the DAX 30 in Frankfurt ended up 1.4%.
"Chinese steps to mitigate the possibility of a further Coronavirus outbreak has helped calm markets today, with European stocks outperforming their peers. With the Chinese Lunar New Year celebrations likely to be muted by the government measures, there is a hope that the potential widespread proliferation of the virus will be averted," said IG Group.
On the London Stock Exchange, Auto Trader ended the best blue chip performer, up 3.4% at 595.60 pence.
Morgan Stanley raised its price target on the digital car marketplace to 650p from 560p and reiterated its Overweight rating.
At the other end of the large cap index, NMC Health ended the worst performer down 11% at 1,250.00p after a shareholder in the UAE-focused private healthcare firm offloaded a 1.0% stake.
Emirates NBD Bank sold around 2.2 million shares in NMC at a price of 1,250p each, in a deal worth GBP27 million. NMC received no proceeds from the sale.
Just Eat closed down 1.7% after the UK Competition & Markets Authority waded into the online takeaway platform's merger with Dutch peer Takeaway.com.
Late on Thursday, the Dutch takeaway platform said the CMA was reconsidering its position on the merger. The CMA on Friday confirmed it will be looking into whether the combination would lessen competition in the UK takeaway platform sector. The invitation for comment closes on February 6.
Languishing at the foot of the FTSE 250, Finablr ended the worst performer, down 27%. The payments and foreign exchange services provider said 392 million shares, or a 56% stake, has been pledged by BRS Investment Holdings as a security for borrowings raised by BRS Ventures & Holdings.
Finablr said the shares were used to refinance an acquisition facility borrowed by BRS Ventures & Holdings in connection with the acquisition its Travelex business in January 2015.
Travel money provider Travelex was acquired by UAE businessman Bavaguthu Raghuram Shetty via BRS Ventures. Shetty is also founder of NMC Health.
The pound was quoted at USD1.3068 at the London equities close, down from USD1.3107 at the close Thursday.
Sterling had touched an intraday high of USD1.3174 against the dollar in the wake of positive UK purchasing managers' index data.
The seasonally adjusted IHS Markit/CIPS flash UK services purchasing managers' index posted 52.9 in January, up sharply from 50.0 in December and was the highest reading since September 2018.
Any reading below 50 indicates contraction, while one above expansion.
In addition, the flash UK manufacturing purchasing managers' index ticked up to 49.8 in January from 47.5 in December and was at its highest level since April.
The UK composite output index rose to 52.4 in January from 49.3 in December, climbing above the 50.0 no-change mark for the first time since August.
However, the pound subsequently retreated as investors look ahead to the Bank of England's monetary policy meeting next week, amid fears the central bank may cut interest rates.
Analysts at RaboBank said: "We expect the Bank of England to cut its benchmark interest rate from 0.75% to 0.50% at next week's meeting. The OIS market currently reflects a 50% probability of such a move; the consensus among analysts is for a hold in rates.
"A variety of PMI surveys show that business optimism has recovered a bit following Prime Minister Boris Johnson's decisive election victory, but we find it hard to believe that this optimism will either be sustained or translated into increased levels of activity. If the MPC feels otherwise and therefore decides to keep Bank rate on hold, it won't be long before a cut is on the table again."
The euro stood at USD1.1025 at the European equities close, down from USD1.1036 late Thursday, after data showed eurozone business activity remained subdued at the start of the year, IHS Markit said.
The preliminary composite purchasing managers' index was unchanged at 50.9 in January, with the reading just above the no-change mark of 50, indicating a marginal expansion in activity.
The services activity index slipped to a two-month low of 52.2 in January from 52.8 in December.
However, the manufacturing PMI hit a nine-month high of 47.8 from 46.3, though with a reading below 50, the sector is still contracting.
Analysts at Oxford Economics said: "This week ended on a bittersweet note for the eurozone. While the recovery in manufacturing activity in January is welcome news, weaker services activity means that the European economy continues to grow at a moderate pace at the start of 2020.
"The easing of global trade tensions and the removal of some of the Brexit-related uncertainty means that manufacturing can finally crawl out of its deep slump. However, risks are never far away, and we expect the threat of potential US tariffs on the European auto industry to continue to pose a substantial risk to the outlook."
Against the yen, the dollar was trading at JPY109.36, flat from JPY109.39 late Thursday.
Stocks in New York were mostly lower at the London equities close as markets monitored the latest news on the virus outbreak in China.
The DJIA was down 0.1%, the S&P 500 index down 0.2% and the Nasdaq Composite was flat.
In the US, a woman in Chicago in her sixties was confirmed as the second patient on US soil infected with the deadly coronavirus, health officials said on Friday, with 50 other suspected cases under investigation.
On the corporate front, American Express Co reported a "steady" fourth-quarter of 2019 on Friday, despite earnings dropping by double-digits.
The New York-based credit card giant posted net income of USD1.69 billion for the three months to December, 16% lower than the year before. Diluted earnings per share fell 13% to USD2.03, with the adjusted earnings per share figure up 17%.
The stock was up 2.8% on Wall Street.
Next week's US earnings calendar includes results from a slew of household names including: Apple, Boeing, Chevron and Exxon Mobil. There is also the Federal Reserve's interest rate decision.
Brent oil was quoted at USD60.72 a barrel at the London equities close, down from USD61.40 at the close Thursday. The North Sea benchmark has fallen 7.0% over the past week as the death toll in China rises from the coronavirus.
Gold was quoted at USD1,571.18 an ounce at the London equities close, up from USD1,563.00 late Thursday.
The UK corporate on Monday has annual results from recruiter SThree.
The economic events calendar on Monday has UK mortgage approvals figures at 0930 GMT.
Financial markets in Hong Kong and China will be closed on Monday for Chinese new year.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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