London midday: Stocks extend losses ahead of payrolls; NMC slumps again
London stocks had fallen further into the red by midday on Friday as investors eyed the release of the latest non-farm payrolls report and continued to consider the impact of the coronavirus.
The FTSE 100 was down 0.7% at 7,451.13.
The coronavirus was still firmly in focus after the People’s Bank of China said the outbreak could disrupt the country’s economy in the first quarter, but a recovery is expected once the virus is brought under control.
Neil Wilson, chief market analyst at Markets.com, said: "Tariff cuts by China and a good dose of central bank stimulus is seen as the cure for risk assets, but this placebo can only mask symptoms for so long - real economic damage and supply chain havoc is coming. On the ground it’s still rather grim. Shenzhen is now in lock down. Cases have risen to more than 31k - but the number of newly confirmed coronavirus cases decreased for the second straight day, China’s National Health Commission said.
"So we see an increasing divergence between how the market views the spread of the virus and how we it views the economic damage thereof."
On the data front, the non-farm payrolls report, unemployment rate and average earnings are all due at 1330 GMT.
CMC Markets analyst David Madden said: "The update is expected to show that 160,000 jobs were added last month, which would be an improvement on the 145,000 that were posted in December. The unemployment rate is tipped to hold steady at 3.5% - which is a fifty year low. Yearly average earnings are tipped to come in at 3%, and that would be a slight increase on the 2.9% reading of December.
"The US labour market is clearly in great shape so it might be difficult to keep adding jobs at a sizeable rate. Traders are paying more attention to the wages component these days as workers who earn more tend to spend more. It is worth remembering that yesterday the jobless claims rate fell to 202,000, while on Wednesday the ADP report was 291,000."
In corporate news, NMC Health was sharply lower again. Earlier in the week, the Financial Times reported that the UAE private healthcare operator’s founder was looking to buy out his Emirati partners and return to an "active leadership position" at the company. Shares of NMC have taken a tumble since US research firm and short seller Muddy Waters accused the company in December of manipulating its balance sheet to understate debt.
Hargreaves Lansdown was under pressure as co-founder Peter Hargreaves sold just under 34.4m shares in the company. Hargreaves sold the shares to institutional investors via an accelerated bookbuild at £16 each, raising gross proceeds of £550m.
He said: "The sale of some of my shares in Hargreaves Lansdown is part of a process of long-term financial planning to diversify my assets. I remain, and will continue to be, a substantial shareholder in Hargreaves Lansdown. I am very proud of the business that I co-founded and helped build."
Burberry was down after it said the coronavirus was affecting its sales in China and Hong Kong and that more than a third of its stores in mainland China were closed. The luxury goods company said 24 of its 64 mainland China stores were closed. Its other outlets are operating with reduced hours and customer footfall is down significantly.
Miners retreated, with Glencore, Antofagasta and BHP all on the back foot, while airlines easyJet and British Airways parent IAG flew lower.
On the upside, Vodafone was the standout gainer after an upgrade to ‘buy’ at Jefferies, while insurer Hastings was boosted by an upgrade to ‘overweight’ from ‘equalweight’ at Morgan Stanley.
TUI gained as it agreed to sell its Hapag-Lloyd Cruises business to TUI Cruises, the company's 50:50 joint venture with Royal Caribbean Cruises, for an enterprise value of €1.2bn (£1bn).
Beazley was in the green for the second day running after it reported a better-than-expected surge in full-year profit on Thursday.
Market Movers
FTSE 100 (UKX) 7,451.13 -0.72%
FTSE 250 (MCX) 21,438.18 -0.62%
techMARK (TASX) 4,142.80 -0.13%
FTSE 100 - Risers
Vodafone Group (VOD) 154.34p 2.05%
Polymetal International (POLY) 1,274.50p 1.27%
TUI AG Reg Shs (DI) (TUI) 859.40p 0.80%
National Grid (NG.) 1,034.60p 0.78%
Centrica (CNA) 85.36p 0.66%
Ferguson (FERG) 7,350.00p 0.60%
SSE (SSE) 1,602.50p 0.60%
London Stock Exchange Group (LSE) 8,208.00p 0.51%
Standard Life Aberdeen (SLA) 312.90p 0.51%
SEGRO (SGRO) 911.80p 0.44%
FTSE 100 - Fallers
NMC Health (NMC) 793.40p -12.60%
Hargreaves Lansdown (HL.) 1,620.00p -5.18%
Glencore (GLEN) 232.10p -3.05%
Evraz (EVR) 393.70p -2.89%
BHP Group (BHP) 1,673.60p -2.86%
Antofagasta (ANTO) 856.40p -2.84%
easyJet (EZJ) 1,494.00p -2.80%
International Consolidated Airlines Group SA (CDI) (IAG) 606.20p -2.54%
InterContinental Hotels Group (IHG) 4,806.50p -2.53%
Anglo American (AAL) 2,037.50p -2.47%
FTSE 250 - Risers
Beazley (BEZ) 600.00p 3.71%
Hastings Group Holdings (HSTG) 188.60p 2.39%
Mitchells & Butlers (MAB) 413.00p 2.23%
PureTech Health (PRTC) 310.00p 1.97%
Future (FUTR) 1,184.00p 1.72%
Network International Holdings (NETW) 620.00p 1.31%
PPHE Hotel Group Ltd (PPH) 2,080.00p 0.97%
Coats Group (COA) 71.70p 0.91%
Man Group (EMG) 156.85p 0.84%
Brewin Dolphin Holdings (BRW) 360.20p 0.78%
FTSE 250 - Fallers
Hunting (HTG) 307.40p -3.88%
Helios Towers (HTWS) 139.60p -3.62%
Wood Group (John) (WG.) 367.20p -3.47%
Cairn Energy (CNE) 167.40p -3.46%
Vivo Energy (VVO) 110.60p -3.36%
Oxford Instruments (OXIG) 1,610.00p -3.14%
TI Fluid Systems (TIFS) 233.00p -3.12%
Vesuvius (VSVS) 435.40p -3.02%
Synthomer (SYNT) 329.00p -2.96%
Kaz Minerals (KAZ) 482.70p -2.91%