Taylor Wimpey profits slip, Rio Tinto posts bump in earnings
London open
The FTSE 100 is expected to open 58 points lower on Wednesday, having closed down 1.94% at 7,017.88 on Tuesday.
Stocks to watch
Taylor Wimpey reported results for 2019 in line with expectations on Wednesday, with “clear progress” against its strategic priorities. The FTSE 100 housebuilder said it saw a 5% increase in group completions to 16,042 for the year ended 31 December, including joint ventures. Its revenue increased 6.4% to £4.34bn, while operating profit slipped to £850.5m from £880.2m, which the board said reflected its volume growth, offset by rising build costs and flat house prices.
Rio Tinto on Wednesday reported an 18% rise in full year underlying earnings on the back of soaring iron ore prices, offsetting lower shipments in 2019. The company said it was prepared for the short-term impact to supply chains from the coronavirus outbreak. Underlying earnings for the year to December 31 rose to $10.37bn from $8.81bn a year earlier.
HICL Infrastructure announced the acquisition of transmission assets associated with the Galloper Windfarm, located off the coast of Suffolk, by Diamond Transmission Partners - a consortium comprising it and Mitsubishi subsidiary Diamond Transmission Corporation - on Wednesday. The FTSE 250 company said the transaction was part of Tender Round 5 of Ofgem's Offshore Transmission Owner (OFTO) programme. HICL previously announced its status as preferred bidder for the OFTO, alongside Diamond Transmission Corporation, in November 2018, with its investment totalling £13.6m, funded from its own cash resources.
Newspaper round-up
Mounting fears over the spread of the coronavirus led to another global market sell-off on Tuesday, with investor panic wiping nearly £100bn off the value of Britain’s biggest companies in the past two days. The FTSE 100 index closed at its lowest level in a year, down 1.9% at 7,018, lowering the value of Britain’s blue-chip companies by about £35bn. It followed a major sell-off on Monday, when £62bn was wiped off the value of the index. - Guardian
Preparations for a severe outbreak of coronavirus in Britain, including the closure of schools and restricting movement around the country, were being stepped up last night as the virus swept across Europe. Ministers are finalising contingency plans, which also include quarantining families, as Switzerland, Austria, Croatia and mainland Spain all recorded their first cases. - The Times
Leading Brexiteer Arron Banks is among hundreds of people whose private records were wrongly published by the City watchdog in a major data breach. Mr Banks was one of 1,600 members of the public whose details were mistakenly released on the website of the Financial Conduct Authority (FCA) after they made a complaint to the regulator. In some cases the FCA even included addresses and telephone numbers. - Telegraph
An activist investor has increased the pressure on Barclays over the links between its chief executive and Jeffrey Epstein. Edward Bramson, whose Sherborne Investors holds a 5.5 per cent stake in Barclays worth £1.8 billion, described an investigation into Jes Staley’s connections with Epstein, the convicted sex offender, as “another example of governance weakness”. - The Times
The New York hedge fund that called for Prudential to break up its business and ditch its UK headquarters has conceded the company could remain listed on the London stock market under its plans. Third Point would be prepared to accept the FTSE 100 insurer’s Asian arm being dual-listed in Hong Kong and London, most likely with a secondary listing in London, sources close to the hedge fund said. - Telegraph
US close
US stocks recorded another day of heavy losses on Tuesday, as market participants' hopes for some positive headlines after the previous session saw both the Dow Jones and Nasdaq Composite record their worst trading sessions in two years were dashed.
The Dow Jones Industrial Average was down 3.15% at 27,081.36, the S&P 500 lost 3.03% to 3,128.21, and the Nasdaq Composite was off 2.77% at 8,965.61.
At the open, the Dow was 140.43 points lower on Tuesday after another increase in the number of Wuhan coronavirus cases outside of China fuelled concerns about a potential prolonged global economic slowdown.
With European and Asian markets continuing to head south on Tuesday, AvaTrade's Naeem Aslam said the heavy selloff was an "overreaction".
“Risk off is the name of the trade today,” Aslam quipped.
“Investors are tense due to the fear of a prolonged economic slowdown due to the outbreak of Coronavirus.
“In reality, it was nothing more than the market participants overreacting to news of the virus spreading.”
Aslam pointed out that “nothing significant” occurred yesterday, which caused both of the indices to surge the way that they did.
Elsewhere, the US 10-year sovereign yield dived below 1.40% - its lowest mark since the 2016 dip.