(Alliance News) - Stocks in London were mixed at midday on Friday, with coronavirus fears mounting after two members of the same family tested positive in England.
The first cases of the virus to be diagnosed in the UK were announced as more than 80 Britons on an evacuation flight from the Chinese city at the centre of the outbreak were due to land in the UK.
The Department of Health declined to say where in England the patients are from but it is understood they are not in the Wirral area, where a special facility has been set up to quarantine those returning from Wuhan. They are being treated at a hospital in Newcastle, according to the PA news agency.
On Wednesday night, an apartment-hotel in Yorkshire was put on lockdown when a man, who is understood to be a Chinese national, was taken to hospital after falling ill.
The FTSE 100 index was down 58.91 points, or 0.8%, at 7,323.05. The flagship index is down 3.6% so far this week.
The FTSE 250 was up 4.58 points, at 21,295.78, and the AIM All-Share was flat at 952.16.
The Cboe UK 100 was down 0.8% at 12,402.85, the Cboe UK 250 was down 0.1% at 19,233.30, and the Cboe Small Companies down 0.1% at 12,444.03.
In Paris the CAC 40 was down 0.6%, while the DAX 30 in Frankfurt was down 0.5%.
"After a bright open for European equities, sentiment soured through the morning and the major bourses are now all deep in the red. As we've said all week, investors are conditioned into buying dips but there is just no conviction in any rally right now. Coronavirus fears are the likely culprit for today's malaise, with two cases now confirmed in the UK highlighting the risk of the disease spreading further outside of China," commented Markets.com analyst Neil Wilson.
"I don't think it's an exaggeration to say that traders get spooked when it's closer to home. Given the recent lockdown to prevent its spread, and the roughly 2-week incubation period, one senses the key window for new cases in Europe is the coming week. Some de-risking going into the week- and month-end is also perhaps in play," Wilson added.
On the London Stock exchange, Polymetal International was the best blue chip performer, up 1.5% after the gold miner said its board approved a special dividend of USD0.20 per share.
"Significant free cash flow generated by Polymetal in 2019 underpins the payment of a special dividend, while ensuring that our leverage ratio remains at our target 1.5 times Net Debt/EBITDA level. This decision supports our commitment to deliver meaningful and sustainable cash returns to our shareholders," said Chief Executive Officer Vitaly Nesis.
At the other end of the large cap index, Hargreaves Lansdown was the worst performer, down 6.8% after the fund supermarket reported a rise in assets under administration over the first half of financial 2020, but saw a decline in new business.
At December 31, the fund supermarket had GBP105.2 billion in total assets under administration, up 5.9% from the GBP99.3 billion recorded at the end of June and 22% higher than at the same point last year.
Hargreaves recorded GBP2.31 billion in net new business in the six-month period, down sharply from the GBP7.3 billion seen in the most previous six-month period, ending June 30, and down 8.7% compared to the final six months of 2018.
New business in the period, particularly in the second quarter, was hurt by weak investor sentiment, the company said.
In the FTSE 250, Aston Martin Lagonda was the star performer, up 17% after the Valkyrie hypercar maker agreed to sell a GBP182 million stake to a consortium led by Canadian billionaire Lawrence Stroll.
Stroll is father of Formula One race car driver Lance Stroll and owner of F1 team Racing Point. In December, Autocar magazine reported that billionaire Stroll was preparing a bid to buy a major stake in the British luxury carmaker.
The company, known for making fictional spy James Bond's preferred mode of transport, said it will raise a total of GBP500 million through the group's investment as well as a GBP318 million rights issue supported by major shareholders.
Aston Martin said a consortium led by Stroll, owner of Formula One team Racing Point, has purchased a 20% stake in the business. Aston Martin will place 45.6 million new ordinary shares at a price of 400 pence per share to raise the GBP182 million, which will be acquired by the consortium.
This will then be followed by an underwritten rights issue to raise GBP318 million, which will take place after the release of the company's annual results in February. The consortium is expected to participate in the rights issue taking its total investment to GBP235 million.
Stroll is set to join the company's board as executive chair, replacing Penny Hughes, as part of the deal.
"The company itself acknowledges it will not be fully compliant with the UK Corporate Governance Code due to the composition of its board in the wake of today's developments and it may come under increasing pressure on this issue over time," AJ Bell's Russ Mould said.
The pound was quoted at USD1.3117 at midday, firm against USD1.3102 at the London equities close Thursday, as the UK gets set to depart from the European Union.
UK Prime Minister Boris Johnson will hail the "dawn of a new era" as the UK leaves the EU following a tumultuous period since the 2016 EU referendum, which saw heightened economic uncertainty and claimed the premiership of Johnson's predecessor Theresa May.
At 2300 GMT on Friday, bonds dating back to 1973 when the UK joined the European Economic Community will be broken, but Johnson insisted Brexit marks "not an end but a beginning". The UK will immediately enter a transition period scheduled to end on December 31. However, the UK faces further uncertainty as both sides seek to strike a trade deal by the end of the year.
In a symbolic move, Johnson will chair a meeting of his Cabinet in Sunderland, the city which was the first to back Brexit when results were announced after the June 2016 referendum.
The euro stood at USD1.1030 at midday, flat from USD1.1028 at the European equities close Thursday.
In economic news from the continent, eurozone growth expanded in both final quarter and entire 2019, data from Eurostat showed.
Seasonally adjusted GDP rose by 0.1% in both the euro area and the EU28 during the fourth quarter of 2019 compared with the previous quarter, when it had grown by 0.3% in both zones.
Compared with the same quarter of 2018, seasonally adjusted GDP rose by 1.0% in the euro area and by 1.1% in the EU28.
According to a first estimation of annual growth for 2019, based on quarterly data, GDP grew by 1.2% in the euro area and 1.4% in the EU28.
Turning to inflation estimates, Euro area annual inflation is expected to be 1.4% in January, up from 1.3% in December, according to Eurostat. The European Central bank targets inflation of "below, but close to, 2.0% over the medium term".
Analysts at Capital Economics said: "We think that the economy will expand by just 0.7% this year, less than the consensus forecast. Headline inflation will keep rising if we are right that oil prices will rise and the euro will weaken.
"But with the economy growing at a meagre pace and wage growth coming off the boil, we expect core inflation to remain around 1% this year. As a result, we have pencilled in a 20 basis points cut to the ECB's deposit rate, and for the Bank to increase its corporate bond buying, in September this year."
Against the yen, the dollar was trading at JPY108.85, firm against JPY108.75 late Thursday.
Stocks in New York were set for a lower open as earnings season continues. The DJIA, the S&P 500 index and the Nasdaq Composite are all called down 0.6%.
Amazon.com on Thursday released earnings figures for the holiday quarter that trounced market expectations. Profit in the final three months of 2019 rose 8% from a year ago to USD3.3 billion as net sales grew 21% to USD87.4 billion, according to the Seattle-based firm.
The stock was up 2.9% in pre-market trade in New York.
Ahead in the US earnings calendar on Friday, oil majors Chevron and Exxon Mobil will report earnings before the market open in New York.
Brent oil was quoted at USD57.62 a barrel at midday, sharply lower than USD58.60 at the London equities close on Thursday, amid coronavirus fears.
Gold was quoted at USD1,578.80 an ounce at the London equities close, lower than USD1,582.85 late Thursday.
Financial markets in China are set to reopen on Monday after being closed over the past week for the Lunar New Year holiday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Hargreaves Lansdown (HL.)
Aston Martin Lagonda (AML)
