London close: Stocks hit as virus cases rise in Italy and South Korea
London stocks took a beating on Monday, with the top-flight index down more than 3% as global markets were roiled by growing concerns that the COVID-19 coronavirus might be set to spread into Europe.
The FTSE 100 was 3.34% lower at 7,156.83, while UK government bond yields fell, with the yield on the 10-year Gilt five basis points lower at 0.52%.
Stateside meanwhile, the Dow Jones Industrials was falling by almost 1,000 points, even after World Health Organisation chief, Tedros Adhanom Ghebreyesus, said that the current coronavirus was not yet a "pandemic", although he conceded that it had the potential to become one.
Nonetheless, in remarks to CNBC, Warren Buffett said investors should not let the coronavirus scare influence whether they buy or sell stocks, even as he reiterated his upbeat view on the long-term outlook for shares if interest rates and taxes remained low.
"It is scary stuff. I don’t think it should affect what you do with stocks, but in terms of the human race it’s scary stuff when you have a pandemic," he said.
Stocks in Asia also fell sharply in overnight trading, with South Korea’s Kospi down nearly 4% as the country lifted its coronavirus alert to "highest level" after seven people died from the virus, with 833 infected.
Around a dozen towns in Italy were on lockdown, with 219 people infected in what was the biggest outbreak outside of Asia, and eight people dead.
Most worrisome of all, Italian authorities were struggling to identify the origin of the first case in the country, so that at its session lows Italy's benchmark FTSE Mib had retreated by almost 6%w.
Analysts at Rabobank weren't forecasting a recession in Italy, but told clients that possibility existed.
And in China, officials had begun to roll-back some quarantine measures in a bid to relieve pressure on the economy, amid some 'market chatter' that GDP in the Asian giant might be set to shrink in the first quarter.
In equity markets, travel stocks took a hammering. Airlines easyJet, British Airways parent IAG and Wizz Air were all sharply lower amid worries about the impact of the coronavirus and as a Saharan sandstorm disrupted flights in and out of the Canary Islands. Travel company TUI was also weaker, along with InterContinental Hotels Group.
Miners such as Glencore, Rio Tinto and Anglo American lost a lot of ground as well, alongside luxury brand Burberry and cruise operator Carnival.
Primark owner Associated British Foods was in the red after saying it was looking at stepping up production from Asian suppliers to mitigate any longer-term impact from the coronavirus in China where it sources a broad assortment of products.
On the upside, some precious metals miners shone as gold prices rose to a seven-year high amid a flight to safety, with Polymetal and Fresnillo both higher. Fresnillo was also buoyed by news that its $395m Juanicipio silver/gold joint venture in Mexico will start ahead of schedule.
Education publisher Pearson was among the few bright spots, having fallen on Friday after it warned that profit would decline in 2020.
Outsourcer Bunzl also bucked the trend as it posted a rise in annual profit and revenue and announced two acquisitions.
FTSE 100 - Risers
Pearson (PSON) 579.60p 3.24%
Bunzl (BNZL) 2,001.00p 2.69%
Polymetal International (POLY) 1,345.00p 0.07%
Admiral Group (ADM) 2,262.00p -0.57%
NMC Health (NMC) 848.20p -0.82%
British Land Company (BLND) 551.20p -0.90%
Rentokil Initial (RTO) 502.00p -1.26%
BAE Systems (BA.) 659.60p -1.41%
Severn Trent (SVT) 2,645.00p -1.41%
London Stock Exchange Group (LSE) 8,300.00p -1.45%
FTSE 100 - Fallers
easyJet (EZJ) 1,257.00p -16.67%
TUI AG Reg Shs (DI) (TUI) 767.60p -9.80%
International Consolidated Airlines Group SA (CDI) (IAG) 566.00p -9.15%
Anglo American (AAL) 1,952.60p -8.57%
Melrose Industries (MRO) 226.20p -7.52%
Carnival (CCL) 2,805.00p -6.81%
Whitbread (WTB) 4,451.00p -6.67%
JD Sports Fashion (JD.) 824.20p -6.21%
Glencore (GLEN) 211.55p -5.71%
Rio Tinto (RIO) 3,965.50p -5.64%
FTSE 250 - Risers
Finablr (FIN) 74.90p 5.49%
Ascential (ASCL) 367.60p 3.84%
Fresnillo (FRES) 735.00p 3.20%
PureTech Health (PRTC) 336.00p 3.07%
NextEnergy Solar Fund Limited Red (NESF) 117.50p 0.86%
TBC Bank Group (TBCG) 1,350.00p 0.75%
LXI Reit (LXI) 137.20p 0.44%
Sirius Real Estate Ltd. (SRE) 93.00p 0.43%
Pollen Street Secured Lending (PSSL) 828.00p 0.24%
Sophos Group (SOPH) 571.00p 0.14%
FTSE 250 - Fallers
Wizz Air Holdings (WIZZ) 3,908.00p -11.32%
PPHE Hotel Group Ltd (PPH) 1,850.00p -11.32%
Tullow Oil (TLW) 36.00p -11.26%
Kaz Minerals (KAZ) 452.60p -8.27%
SSP Group (SSPG) 616.00p -7.51%
Premier Oil (PMO) 95.00p -7.45%
Vesuvius (VSVS) 410.40p -7.23%
Vietnam Enterprise Investments (DI) (VEIL) 416.50p -6.61%
Network International Holdings (NETW) 599.00p -6.41%
Future (FUTR) 1,314.00p -6.28%