London open: Miners pace the decline as stocks slump on coronavirus fears
London stocks fell sharply in early trade on Monday, with miners pacing the decline amid growing concerns about the spread of the coronavirus, while oil prices also slumped.
At 0830 GMT, the FTSE 100 was down 1.5% at 7,471.20.
Sentiment took a hit as Chinese authorities warned that the virus was becoming increasingly contagious and its spread was set to accelerate. This came as the number of people infected with the virus rose to more than 2,700 and the death toll grew to 80.
Neil Wilson, chief market analyst at Markets.com, said: "The authorities have extended the new year holiday by three days through to Sunday in a bid to control the spread.
"This has the potential to really rattle markets. And with stock markets having been at or very near all-time highs before all this broke, this is a perfect selling opportunity. The problem is for most investors this is just not a risk event they are prepared for - a true black swan in the making. If politics is hard to grasp for most buysiders then virology is impossible - that is enough reason to see de-risking to happen; although I would still anticipate dips to be bought.
"However, the conviction may be lacking amid what will be a persistent worsening of the situation in terms of the number of the cases and the geography displayed by the headlines. As warned last week, this is going to get a whole lot worse before it turns. As with SARS though, I would expect a significant rebound once the - or indeed before - the worst is over."
While safe havens such as gold gained on worries about the virus, oil prices slid. West Texas Intermediate fell 2.4% to $52.92 a barrel and Brent crude was down 2.2% at $59.37. Wilson said oil was being dented by fears of slower Chinese GDP growth and a hit to the global tourism industry - "two of the key drivers of crude demand".
In equity markets, travel and mining stocks suffered the worst losses, with easyJet, IAG, Carnival, Rio Tinto, Antofagasta and Anglo American all sharply lower.
Luxury fashion brand Burberry, which has big exposure to China, was also under the cosh, dented further by a rating downgrade at MainFirst.
Elsewhere, shares of Amigo Holdings tumbled as the guarantor loans provider said it had launched a strategic review after its largest shareholder, the Richmond Group, said it wants to sell its 60.66% holding in the company. Amigo has also launched a formal sale process which may result in a sale of the company or some of its business.
FTSE 100 - Risers
Unilever (ULVR) 4,476.00p 0.04%
Polymetal International (POLY) 1,265.50p -0.04%
Just Eat (JE.) 865.00p -0.07%
National Grid (NG.) 1,010.60p -0.37%
Centrica (CNA) 90.82p -0.48%
Reckitt Benckiser Group (RB.) 6,119.00p -0.50%
Halma (HLMA) 2,151.00p -0.51%
Diageo (DGE) 3,219.50p -0.63%
Coca-Cola HBC AG (CDI) (CCH) 2,770.00p -0.65%
SSE (SSE) 1,519.50p -0.65%
FTSE 100 - Fallers
easyJet (EZJ) 1,406.50p -5.13%
Burberry Group (BRBY) 1,996.00p -4.91%
International Consolidated Airlines Group SA (CDI) (IAG) 594.20p -4.32%
Rio Tinto (RIO) 4,258.50p -4.06%
Glencore (GLEN) 222.00p -3.71%
Anglo American (AAL) 2,054.00p -3.66%
Johnson Matthey (JMAT) 2,690.00p -3.65%
Carnival (CCL) 3,304.00p -3.62%
Prudential (PRU) 1,370.00p -3.35%
BHP Group (BHP) 1,722.20p -3.19%
FTSE 250 - Risers
Hyve Group (HYVE) 107.00p 4.70%
PureTech Health (PRTC) 314.00p 3.63%
Finablr (FIN) 97.05p 2.16%
McCarthy & Stone (MCS) 159.20p 1.86%
PZ Cussons (PZC) 205.00p 1.74%
888 Holdings (888) 140.50p 1.44%
BMO Commercial Property Trust Limited (BCPT) 113.00p 1.07%
Cranswick (CWK) 3,546.00p 0.68%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 328.00p 0.61%
Pagegroup (PAGE) 473.80p 0.51%
FTSE 250 - Fallers
Tullow Oil (TLW) 48.88p -5.89%
Fidelity China Special Situations (FCSS) 229.00p -4.38%
Ferrexpo (FXPO) 143.00p -3.48%
Kaz Minerals (KAZ) 460.00p -3.42%
IP Group (IPO) 71.00p -3.27%
Spirent Communications (SPT) 234.00p -3.11%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 784.00p -3.09%
Petrofac Ltd. (PFC) 346.90p -2.99%
Wood Group (John) (WG.) 379.60p -2.92%
Ashmore Group (ASHM) 551.50p -2.82%