London open: Stocks sharply lower amid growing coronavirus fears
London equity markets were sharply lower in early trade on Monday following heavy losses in Asia, with travel stocks pacing the declines amid growing concerns about the spread and impact of the coronavirus.
At 0830 GMT, the FTSE 100 was down 2.1% at 7,249.55.
Stocks in Asia took a battering, 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 and 763 were infected. Meanwhile, at least 150 people in Italy have been infected in what is the biggest outbreak outside of Asia, with three people dying from the virus over the last 48 hours.
Stocks in Italy saw the heaviest losses, with the FTSE Mib down 4.2%.
Oanda analyst Craig Erlam said: "Italy now looks very vulnerable as the country is seeing the sharpest rise of new cases in Europe, which will make investors very nervous.
"We've gone from deceleration in China to acceleration elsewhere. It seems investors may have been a little premature in declaring victory which is the risk of the FOMO dip buying trend that we've become all-too familiar with.
"With the number of cases now picking up outside of China and companies providing intermittent updates about the impact on business, we may see a more dramatic re-evaluation of the economic consequences of the virus.
"The IMF warned of a modest hit to growth in front of the G20 over the weekend but that could become more dire as the number of infections outside of China accelerates. Interestingly, they referenced the support of monetary policy and easing trade tensions to the economy. No major change to fiscal attitudes then, it would appear."
In equity markets, travel stocks were the worst performers. Airlines easyJet, British Airways parent IAG and Wizz Air were all down sharply amid worries about the impact of the coronavirus, while travel company TUI slumped more than 9%. Miners such as Glencore, Rio Tinto and Anglo American were also weaker, while luxury brand Burberry and cruise operator Carnival also slid.
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. The company said sales at Primark are expected to be 4.2% ahead of last year in the first half at constant currency and 2.5% ahead at actual exchange rates, driven by increased retail selling space and level like-for-like sales.
Restaurant Group was on the back foot following a report over the weekend that the Frankie & Benny’s owner is set to announce site closures this week. According to the Mail on Sunday, many of the sites are in out-of-town retail parks struggling to attract visitors.
On the upside, precious metals miners shone as gold prices rose amid a flight to safety, with Polymetal, Fresnillo, Hochschild and Centamin all up.
Outsourcer Bunzl bucked the trend as it posted a rise in annual profit and revenue and announced two acquisitions, while Ascential gained on the back of well-received full-year results.
FTSE 100 - Risers
Polymetal International (POLY) 1,388.50p 3.31%
Rentokil Initial (RTO) 508.40p 0.00%
Bunzl (BNZL) 1,947.50p -0.05%
Ocado Group (OCDO) 1,131.50p -0.35%
Smith & Nephew (SN.) 1,915.00p -0.47%
Pearson (PSON) 557.80p -0.64%
HSBC Holdings (HSBA) 557.80p -0.78%
GlaxoSmithKline (GSK) 1,641.20p -1.03%
National Grid (NG.) 1,052.80p -1.03%
British Land Company (BLND) 550.40p -1.04%
FTSE 100 - Fallers
easyJet (EZJ) 1,324.00p -12.23%
TUI AG Reg Shs (DI) (TUI) 772.60p -9.21%
International Consolidated Airlines Group SA (CDI) (IAG) 571.00p -8.35%
NMC Health (NMC) 804.20p -5.96%
Burberry Group (BRBY) 1,776.50p -5.03%
Melrose Industries (MRO) 233.10p -4.70%
Carnival (CCL) 2,876.00p -4.45%
Glencore (GLEN) 215.15p -4.10%
Johnson Matthey (JMAT) 2,598.00p -4.10%
Anglo American (AAL) 2,038.00p -4.09%
FTSE 250 - Risers
Ascential (ASCL) 377.80p 6.72%
Fresnillo (FRES) 751.00p 5.45%
Centamin (DI) (CEY) 159.90p 4.41%
Hochschild Mining (HOC) 208.80p 3.88%
Watches of Switzerland Group (WOSG) 386.80p 3.37%
Fisher (James) & Sons (FSJ) 1,994.00p 1.01%
Vivo Energy (VVO) 110.00p 0.92%
LXI Reit (LXI) 137.80p 0.73%
Syncona Limited NPV (SYNC) 265.00p 0.38%
St. Modwen Properties (SMP) 517.00p 0.19%
FTSE 250 - Fallers
Wizz Air Holdings (WIZZ) 4,051.00p -8.08%
Kaz Minerals (KAZ) 462.50p -6.26%
Tullow Oil (TLW) 38.21p -5.82%
Ferrexpo (FXPO) 148.30p -5.12%
Virgin Money UK (VMUK) 173.70p -4.43%
Hunting (HTG) 291.40p -4.40%
Premier Oil (PMO) 98.20p -4.34%
Restaurant Group (RTN) 123.00p -4.28%
Elementis (ELM) 117.30p -4.01%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 300.00p -3.85%