(Alliance News) - London stocks opened lower on Thursday as China placed the city of Wuhan, the centre of a coronavirus outbreak, on lock-down ahead of Chinese New Year.
The FTSE 100 index was off 33.42 points, or 0.4%, at 7,538.50 early Thursday. The mid-cap FTSE 250 index was down 70.97 points, or 0.3%, at 21,692.01. The AIM All-Share index was up 0.2% at 969.61.
The Cboe UK 100 index was down 0.3% at 12,773.89. The Cboe 250 was down 0.3% at 19,568.61, and the Cboe Small Companies up 0.2% at 12,474.06.
In mainland Europe, the CAC 40 in Paris was down 0.4% while the DAX 30 in Frankfurt was 0.5% lower early Thursday.
In Asia, the Japanese Nikkei 225 index closed down 1.0%. In China, the Shanghai Composite ended down 2.8%, while the Hang Seng index in Hong Kong closed down 1.5%.
China banned trains and planes from leaving a major city at the centre of a virus outbreak on Thursday, seeking to seal off its 11 million people to contain the contagious disease that has claimed 17 lives, infected hundreds and spread to other countries.
Authorities in Wuhan, a major transport hub, also suspended public buses and subways, and said residents should not leave "without a special reason".
More than 570 people have been infected with the virus across China – with most cases found in Wuhan, where a seafood market that illegally sold wild animals has been identified as the epicentre of the outbreak.
The coronavirus has caused alarm because of its similarity to Severe Acute Respiratory Syndrome, or SARS, which killed nearly 650 people across mainland China and Hong Kong in 2002 and 2003. Like SARS, this new virus can be passed among people through the respiratory tract.
The World Health Organization on Wednesday delayed a decision on whether to declare a global health emergency – a rare instrument used only for the worst outbreaks. The emergency committee will meet again on Thursday, after its chair, Didier Houssin, said the experts were split over declaring a public health emergency.
"This is certainly a tough decision, especially as tomorrow is the Chinese New Year Eve. However, in order to control the spread of the new virus, the government needs to make this call. Certainly, all the headlines will continue to concern the market," said Commerzbank.
"From economics' perspective, the domestic demand is likely to be hit hard if the virus can't be effectively controlled," the bank added.
Among companies n the London Stock Exchange, Anglo American held all production guidance for 2020 after meeting targets for 2019.
Anglo American's copper equivalent production for 2019 was 4% higher than the year before, boosted by the Minas Rio iron ore operation in Brazil, which ramped up after being shut down in 2018 due to pipeline leaks. Copper production in the fourth quarter of 2019 was 159,000 tonnes, 13% lower than the year prior, with the annual figure down 5% at 638,000 tonnes.
Diamond production from Anglo's De Beers was 15% lower at 7.8 million carats, with the annual figure falling by 13% on 2018 to 30.8 million carats.
Minas Rio in Brazil produced 6.2 million tonnes of iron ore in the fourth quarter, having produced a minimal amount the year before, with production only restarting at the end of 2018.
"We have delivered our full-year production targets across the business. Production is up 4% for the quarter led by the continued successful ramp-up at Minas Rio in Brazil," said Chief Executive Mark Cutifani.
Shares in the miner were down 1.4% in early trade, along with peers such as Antofagasta, down 2.3% and Glencore, down 2.0%, over concerns that a further spread of coronavirus in China will hit the industry-heavy country's economy.
Elsewhere in London, retailer ASOS said it delivered an "encouraging" start to the financial year with sales up 20%.
The AIM stock was up 12% in early trade.
For the four months to December 31, retail sales grew 20% to GBP1.07 billion, with revenue up 20% as well to GBP1.11 billion.
UK retail sales grew 18% to GBP408.9 million, while international sales were up 22% to GBP666.0 million. Total orders were up 20% to 27.7 million.
ASOS's gross margin, though, was down 170 basis points, reflecting US duty and its investment in customer acquisition.
"After a woeful 2019 which included profit warnings and warehouse outages, investors were hoping that October's full-year numbers marked a line in the sand. Based on this update, the early indications are that this might be the case," said Richard Hunter, head of markets at Interactive Investor.
"While one quarter in isolation does not necessarily herald a new dawn, ASOS has clearly enjoyed some respite with retail sales growing by 20%, ahead of expectations and marking something of a return to form," he added.
In the economic calendar on Thursday, the European Central Bank's latest interest rate decision is at 1245 GMT which will be followed by a press conference with President Christine Lagarde at 1330 GMT.
"Little risk here of any rate change given Lagarde's recent appointment. Instead, markets will be looking to soundbites around the start of the ECB's strategic review and what's entailed," said Bethel Loh, macro strategist at ThinkMarkets.
"As Lagarde rebuilds consensus among members and identifies the efficacy of negative rates, the dovish risks around ECB policy should start to become more muted," said Loh. "Especially when you mix in improved sentiment seen over the past few PMI prints."
Eurozone consumer confidence is at 1500 GMT.
Ahead of the ECB, the euro was trading at USD1.1083, firm versus USD1.1073 late Wednesday. Against the yen, the dollar was quoted at JPY109.58, down from JPY109.90.
Sterling was quoted at USD1.3140 early Thursday, soft on USD1.3137 at the London equities close on Wednesday.
Gold was at USD1,554.67 an ounce early Thursday, soft on USD1,557.45 on Wednesday. Brent was quoted at USD62.56 a barrel Thursday, lower than USD63.14 late Wednesday.
By Lucy Heming; lucyheming@alliancenews.com
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Anglo American (AAL)
Antofagasta (ANTO)
Glencore (GLEN)
ASOS (ASC)
