London close: Stocks finish slightly weaker amid coronavirus fears
London’s benchmark finished just below the waterline after a choppy session on Thursday, as worries about the coronavirus crept in, although there was some good news in the form of stronger-than-expected retail sales figures.
The FTSE 100 closed down 0.27% at 7,436.64, while the FTSE 250 was 0.07% higher at 21,866.69.
At the same time, sterling was weaker against both of its major trading pairs, last losing 0.32% against the dollar to $1.2879, and 0.16% on the euro at €1.1939.
Sentiment was boosted earlier, after the People’s Bank of China cut the one-year loan prime rate to 4.05% from 4.15% and the five-year rate to 4.75% from 4.80% overnight.
However, the potential impact of the coronavirus was never far from investors’ minds as Japan reported two deaths and cases in South Korea more than doubled.
On home turf, figures from the Office for National Statistics showed that retail sales rose more than expected in January as shoppers loosened their purse strings after the general election result reduced near-term uncertainty.
Retail volumes rose 0.9% from December, boosted mainly by food sales, and beating the average economist's forecast for a 0.7% increase.
In the three months to January retail purchases fell 0.8% from the previous period with declines across all sectors.
The three-month figures include the whole of the Christmas and post-Christmas trading period but the January result appears to reflect a short-term boost caused by the Conservatives' emphatic election victory in December, which allowed Brexit to pass.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the January figure showed retail snapping back after politics-related weakness in the fourth quarter of 2019.
Food store sales rose 1.7%, non-food store sales were up 1.3% and non-store sales rose 2.5%, while petrol sales fell 5.7%.
"January’s official retail sales figures confirm that the decisive general election has released the handbrake of political uncertainty on consumers’ spending," Tombs said.
Despite the upbeat data, sterling was still losing ground against the dollar and euro, with Spreadex analyst Connor Campbell pointing out that tensions between the UK and the EU were showing no signs of abating.
“Brussels has accused Boris Johnson of ‘below the belt’ trade tactics - not great given that negotiations start in March," he said.
Manufacturing activity, meanwhile, continued to decline in the three months to February, although the sector was showing tentative signs of revival, according to the Confederation of British Industry.
Factory output fell at a slightly slower pace than in January, the CBI's industrial trends survey showed, with the decline led by food, drink and tobacco and mechanical engineering.
Manufacturers were expecting output to recover slightly in the next three months - the second consecutive monthly survey to show predicted growth.
Stock adequacy was roughly in line with the long-run average after falling back from highs over the past year.
“It is encouraging to see manufacturers reporting some early signs of a turnaround in activity, but it’s probably still too early to say whether we’ve seen the end of the slowdown,” said Alpesh Paleja, the CBI’s lead economist.
“The sector is still grappling with longer-term uncertainty over the UK’s future relationship with the EU.”
In equity markets, Smith & Nephew rocketed 7.26% as the artificial hip and knee maker said full-year revenue grew 4.4%, at the top end of the guidance range, but that its outlook would depend on the coronavirus outbreak.
NMC Health was ahead 9.5% following heavy losses in the previous session, when Czech shareholder and activist investor Krupa Global Investments said it would not take a strategic stake in the UAE healthcare operator.
Lloyds Banking Group gained 1.38%, even after it said underlying profit fell 7% last year as revenue declined in challenging conditions.
BAE Systems was in the green by 2.19% after it reported full-year earnings growth of 7%, in line with its own guidance, and forecast a rise in earnings in 2021 by mid-single digit, excluding the impact of recent US acquisitions.
DS Smith rose 3.36% after it said that the US Department of Justice had entered a consent decree to clear the completion of the sale of its plastics division to Liqui-Box.
Anglo American was 1.65% higher after the miner said strong precious metals and iron prices offset weakness in diamonds and coal as it reported an increase in full-year profits.
Over on the FTSE 250, shareholders in Moneysupermarket.com were 'in the money' on Thursday after the price comparison website said that its full-year pre-tax profit rose to £116m from £106.9m in 2018.
It put that down to strong showings from both its home services and insurance units, and with basic earnings per share ahead by 9% to 17.7p, the dividend was lifted 6% to 11.71p a share.
Stock in Moneysupermarket ended the day up 18.69%.
Hochschild Mining was glistening, rising 4.08% by the close as April gold futures notched up a fresh seven-year high on COMEX of $1,621.90 per ounce.
TBC Bank shares jumped 5.19% following news that solid economic conditions across Georgia had fed a rise in the lender's full-year underlying return on equity to 22.6%, alongside a 3.3% return on assets.
Spectris was also on the up, rising 7.05% after the precision measurement and control equipment specialist unveiled a 2.5% increase in full-year operating profits and unveiled a £175.0m special dividend.
That helped investors get over management's warning that "challenging" markets lay ahead in the first half of 2020, and news of lessened activity in China in the wake of the recent coronavirus outbreak.
On the downside, Imperial Brands was down 3.55%, Carnival lost 1.73%, and GlaxoSmithKline was 0.3% weaker, as the three stocks went ex-dividend.
Meggitt was off 3.95%, after Credit Suisse cut its price target on the stock to 520p from 550p.
Suisse cited the 737 MAX grounding as it lowered its 2020 margin expectations by 50 basis points.
FTSE 100 - Risers
NMC Health (NMC) 857.40p 9.50%
Smith & Nephew (SN.) 1,979.00p 7.26%
Centrica (CNA) 78.00p 4.11%
Smith (DS) (SMDS) 362.70p 3.36%
Barclays (BARC) 181.32p 2.59%
BAE Systems (BA.) 656.40p 2.56%
Johnson Matthey (JMAT) 2,778.00p 2.43%
Anglo American (AAL) 2,122.00p 1.63%
Mondi (MNDI) 1,696.50p 1.56%
Lloyds Banking Group (LLOY) 56.63p 1.52%
FTSE 100 - Fallers
Imperial Brands (IMB) 1,709.00p -7.32%
Aveva Group (AVV) 4,982.00p -5.82%
Burberry Group (BRBY) 1,920.00p -4.62%
Meggitt (MGGT) 612.00p -3.95%
Taylor Wimpey (TW.) 230.70p -2.33%
Berkeley Group Holdings (The) (BKG) 5,352.00p -2.23%
Coca-Cola HBC AG (CDI) (CCH) 2,806.00p -1.92%
Ocado Group (OCDO) 1,145.00p -1.89%
Sage Group (SGE) 780.00p -1.84%
Barratt Developments (BDEV) 863.40p -1.71%
FTSE 250 - Risers
Moneysupermarket.com Group (MONY) 367.70p 18.69%
Cineworld Group (CINE) 189.50p 7.27%
Spectris (SXS) 2,908.00p 6.29%
TBC Bank Group (TBCG) 1,376.00p 5.04%
Royal Mail (RMG) 182.50p 4.76%
Centamin (DI) (CEY) 148.85p 4.64%
Hochschild Mining (HOC) 188.60p 4.08%
Wood Group (John) (WG.) 422.30p 3.81%
Elementis (ELM) 126.50p 3.43%
Vesuvius (VSVS) 454.80p 3.36%
FTSE 250 - Fallers
NextEnergy Solar Fund Limited Red (NESF) 115.50p -3.35%
Restaurant Group (RTN) 128.90p -3.23%
Renishaw (RSW) 3,946.00p -3.14%
Workspace Group (WKP) 1,266.00p -3.14%
Baillie Gifford Japan Trust (BGFD) 759.00p -2.82%
BBGI SICAV S.A. (DI) (BBGI) 163.00p -2.69%
AJ Bell (AJB) 391.00p -2.49%
Dunelm Group (DNLM) 1,304.00p -2.40%
Direct Line Insurance Group (DLG) 336.00p -2.38%
Oxford Instruments (OXIG) 1,612.00p -2.18%