London pre-open: Stocks seen lower after downbeat US session
London stocks were set for more losses on Thursday following a downbeat US session, amid growing concerns about the coronavirus outbreak and its impact on the global economy.
The FTSE 100 was called to open 37 points lower at 5,417.
CMC Markets analyst David Madden said: "Last week we saw a lot of money being thrown at the pandemic as central banks and governments took drastic measures to cushion the blow to their respective economies, but now dealers must contend with the growing health crisis.
"Covid-19 has claimed more lives in the US than it has in China. Europe is grappling with the health emergency too as Italy and Spain have been hit hard by Covid-19 in terms of cases. Italy will now keep its lockdown in place until 13 April, while Germany has extended its lockdown until 19 April - this points to more financial pain on the horizon."
In corporate news, British Gas owner Centrica cancelled its dividend and cut capex by £200m to mitigate the impact of the coronavirus pandemic. The company reported a significant reduction in demand from business customers who had shut their shops after the government ordered lockdown. "We also expect to see an increase in working capital outflows and customer bad debt, as certain customer segments defer payments due to the reduction of household incomes and business revenues," Centrica said.
Land Securities has cancelled its dividend to conserve cash and set up an £80m rent relief fund for customers struggling during the coronavirus crisis.
Segro said that it is "very well capitalised" with a 26% loan-to-value ratio as at 31 March, alongside high liquidity and significant headroom to its financial covenants, as it faced the impact of the Covid-19 coronavirus pandemic.
The FTSE 100 property investment and development company reported cash and undrawn facilities of £1.2bn at the end of March, with £280m of capital commitments.
It said rental income would need to fall by 80%, or asset values by 64% before any debt covenants were breached, and confirmed it would go ahead with payment of the final dividend of 14.4p per share on 1 May.