London close: Bargain hunters bring indices off lows, but AIM stocks left out
Stocks finished on a mixed note on Wednesday, with bargain hunters stepping in even as health officials around the globe sounded the alarm over the near-pandemic status of the ongoing outbreak of the new China coronavirus.
London's top-flight index was up 0.35% at 7,042.47, while the second tier index pared earlier losses to finish down by a modest -0.45% t0 20,622.95.
The FTSE AIM-All Share on the other hand crumbled 2.01% to end the day at 911.16, alongside a drop of 0.64% to 1.291570 in the pound's value against the US dollar while versus the euro it lost 0.73% to 1.1865.
"The sharp declines seen on the AIM market signals a heightened risk of a UK-wide Wuhan-style coronavirus episode which could see partial shut-downs hit small and underfunded firms," said IG's Josh Mahony.
For his part, UBS strategist Keith Parker said the combination of coronavirus cases outside of China, economic data, US election primaries, past spikes in volatility and companies' guidance on earnings all pointed to "continued volatility for equities over coming weeks."
"Valuation is supportive and growth in Q2 is expected to rebound, but risks remain. - Coronavirus cases. The spike in new cases outside China broadens and lengthens the potential impact. New cases in China peaked about 2 weeks after starting to rise," he said.
"Thus, 10 more days of rising [rest of the world] cases could see markets remain volatile, with a continuing spike after next week a worrying sign and a decline in cases a positive."
Meanwhile, thousands of Britons were set to be tested by GPs for the virus, as the spread of cases in Europe led to the belief that there could be more cases in the UK than were currently known.
Mass surveillance was set to be introduced, with health officials also said to be mulling school closures and restrictions on transport.
Overnight, the World Health Organisation warned that governments were "simply not ready" to tackle their own coronavirus outbreaks, as the illness spread further through Europe and UK officials announced plans for more widespread testing.
In equities, travel plays continued to be hit hard amid the virus outbreak, with TUI, easyJet, Carnival, InterContinental Hotels Group all lower, although British Airways-owner IAG bucked the trend.
Asia-focused HSBC and StanChart were higher alongside, with Shell also finding attracting a slight bid.
Taylor Wimpey was down after reporting 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 the other hand recovered following an early bout of selling, after it 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 31 December rose to $10.37bn from $8.81bn a year earlier.
Out on the FTSE 250, bargain hunting also helped the likes of Fidelity China Special Situations, JP Morgan Emerging Markets IT, and Schroder Asia Pacific to reverse early losses, and relieved part of the immediate selling pressure on the oil patch.
In the case of Weir Group, the reason behind the bounce in its shares was its decision to exit the oil and gas business.
After booking a £546.0m impairment on the value of the unit, Weir said it would offload it.
Analysts at Peel Hunt concurred with the company, saying: "We entirely agree with the proposed exit, but the debate is going to focus on how to realise value in a very difficult end market" - and so did markets.
FTSE 100 - Risers
NMC Health (NMC) 938.40p 6.61%
Evraz (EVR) 376.60p 4.70%
Smurfit Kappa Group (SKG) 2,742.00p 3.55%
HSBC Holdings (HSBA) 555.00p 2.83%
Ocado Group (OCDO) 1,121.50p 2.42%
Smith (DS) (SMDS) 346.90p 2.21%
GlaxoSmithKline (GSK) 1,632.60p 1.90%
Melrose Industries (MRO) 226.00p 1.76%
Spirax-Sarco Engineering (SPX) 9,045.00p 1.63%
Antofagasta (ANTO) 810.00p 1.61%
FTSE 100 - Fallers
Taylor Wimpey (TW.) 212.40p -3.01%
Whitbread (WTB) 4,225.00p -3.01%
Informa (INF) 722.00p -2.96%
JD Sports Fashion (JD.) 783.80p -2.66%
Carnival (CCL) 2,570.00p -2.61%
Barratt Developments (BDEV) 786.20p -2.46%
TUI AG Reg Shs (DI) (TUI) 714.00p -2.22%
Bunzl (BNZL) 2,007.00p -2.10%
Morrison (Wm) Supermarkets (MRW) 173.25p -2.04%
Compass Group (CPG) 1,835.50p -1.87%
FTSE 250 - Risers
Weir Group (WEIR) 1,391.00p 11.24%
Aston Martin Lagonda Global Holdings (AML) 391.00p 5.96%
Serco Group (SRP) 157.80p 4.71%
Vivo Energy (VVO) 107.80p 4.46%
Micro Focus International (MCRO) 772.00p 4.39%
G4S (GFS) 193.80p 3.36%
Hiscox Limited (DI) (HSX) 1,300.00p 2.93%
Vesuvius (VSVS) 411.20p 2.90%
Morgan Advanced Materials (MGAM) 303.60p 2.78%
Royal Mail (RMG) 170.90p 2.77%
FTSE 250 - Fallers
Restaurant Group (RTN) 109.00p -7.23%
Hochschild Mining (HOC) 186.60p -6.09%
Playtech (PTEC) 307.00p -5.77%
Mitchells & Butlers (MAB) 366.50p -5.66%
SIG (SHI) 65.10p -4.96%
Watches of Switzerland Group (WOSG) 349.00p -4.90%
PPHE Hotel Group Ltd (PPH) 1,750.00p -4.89%
SSP Group (SSPG) 568.00p -4.86%
Helios Towers (HTWS) 129.60p -4.85%
Finablr (FIN) 69.75p -4.71%