LONDON MARKET OPEN: Miners Weigh On FTSE 100 Amid Coronavirus Fears

(Alliance News) - Stock prices in London opened sharply lower on Monday as fears over the spread of the coronavirus in China intensified, sending travel, oil and mining stocks into the red.

The toll from China's viral epidemic spiked on Monday to 80 dead with hundreds of new infections despite unprecedented quarantines and travel lockdowns, as foreign governments scrambled to help their trapped citizens.

Cases have been reported as far afield as France, the US and Canada, with various countries in Asia also detecting cases. Those infected had previously been in China.

The new additions to China's death toll came entirely from the epicentre province of Hubei, which on Monday reported 24 fresh fatalities. Most fatalities and overall cases have been in Hubei, and the government says the deaths have largely been elderly or people already weakened by pre-existing health conditions.

But China's National Health Commission said on Monday in addition to 2,744 confirmed infections nationwide - an increase of 769 - there were nearly 6,000 suspected cases and more than 30,000 people under medical observation.

The internationally exposed FTSE 100 index was down 112.37 points, or 1.5% at 7,473.61.

The more UK domestic oriented FTSE 250 was down 250.33 points, or 1.2% at 21,513.61, and the AIM All-Share was down 4.95 points, or 0.5% at 960.96.

The Cboe UK 100 index was down 1.5% 12,667.20. The Cboe UK 250 was down 0.7% at 19,493.66, and the Cboe UK Small Companies was flat at 12,464.40.

In European equities, the CAC 40 in Paris was down 1.7% and the DAX 30 in Frankfurt 1.5%.

Spreadex analyst Connor Campbell said: "Last Friday, the European markets were rebounding on the hopes that the coronavirus was being contained, that China was putting more cities on lockdown, and that the World Health Organisation had stopped short of announcing a global emergency.

"Now those fears have come back with a vengeance. A weekend full of increasingly alarming headlines about jumping death tolls and known cases rising into the thousands - one expert has claimed there could be as many as 100,000 affected by the virus, a figure that dwarfs the official number - has sent the global markets reeling. With its major miners and banks in the red the FTSE suffered a sharp 1.5% dive."

In the FTSE 100, gold miner Polymetal International was the only riser at the London open, up 0.1%, tracking spot gold prices higher.

Gold was quoted at USD1,579.42 Monday, up from USD1,571.18 late Friday, amid the risk-off investment atmosphere.

At the other end of the large-cap index, airline operators easyJet and International Consolidated Airlines were the worst performers, down 4.7% and 1.3% respectively, amid fears the coronavirus outbreak could crimp global air travel. Ryanair Holdings was down 2.7%.

Mining stocks - threatened with a hit to Chinese industrial metals demand - also were lower. Anglo American, Glencore, Rio Tinto and BHP were down 4.4%, 3.7%, 3.7% and 2.9% respectively.

Oil majors BP and Royal Dutch Shell 'A' and 'B' shares were down 1.0%, 0.8% and 0.8% respectively, tracking spot oil prices lower.

Oil was quoted at USD59.36 Monday, sharply lower than USD60.72 late Friday, amid concern the health crisis in China will curtail economic activity and therefore energy demand.

"Oil extended losses sustained last week as traders bet on slower China GDP growth and a hit to the global tourism industry - two of the key drivers of crude demand," noted Markets.com analyst Neil Wilson.

Elsewhere on the London Main Market, Amigo Holdings was down 31% after the guarantor loans provider said it has launched a strategic review and formal sale process in a bid to "maximise value for its shareholders".

This may result in a sale of the company. Amigo said controlling shareholder Richmond Group is willing to sell its 60% stake.

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.

The Japanese Nikkei 225 index closed down 2.0%. Financial markets in China and Hong Kong were closed for the Lunar New Year holiday.

The pound was quoted at USD1.3069 Monday morning, flat from USD1.3068 at the London equities close Friday.

The euro was at USD1.1029 early Monday, flat from USD1.1025 late Friday. Against the yen, the dollar was trading at JPY109.05, lower than JPY109.36 late Friday.

The economic events calendar on Monday has UK mortgage approvals figures at 0930 GMT.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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