After opening higher on Tuesday, the FTSE 100 retreated into negative territory by midday as investors continued to question how severely the worsening coronavirus outbreak will hurt the global economy.

In the US, yesterday was one for the history books, with the Dow Jones Industrial index losing 12.9% or nearly 3,000 points to 20,188, its biggest points loss since the crash of 1929.

At the same time the S&P 500 index crashed 12% or 325 points to 2,386, its biggest loss since the crash of 1987.

While the storm clouds appeared to have lifted this morning with US futures indicated higher and the FTSE gaining 1.5% in early trading, by 12pm the UK's benchmark index had dropped 2.1% to 5,043.98.

Among the biggest gainers initially on the blue-chip benchmark were BHP (BHP) up 7.5% to £11.20, Evraz (EVR) up 6.6% to 259p, Hikma Pharmaceuticals (HIK) up 4.2% to £18.08 and AstraZeneca (AZN) also up 4.2% to £64.81.

TRADING UPDATES

In company news, insurance giant Aviva (AV.) pushed out an update to reassure investors that it was well-capitalised and had plenty of liquidity after its shares hit seven-year lows yesterday.

At the end of February its ‘centre cash position’ was £2.4bn and as of last Friday its solvency cover ratio was roughly 175% meaning the final dividend is more than covered. In response the shares rose just 0.7% to 253p.

IT infrastructure products and services firm SoftCat (SCT) published its half-year results for the period to 31 January, showing a 20.8% increase in revenues and a similar increase in earnings per share and dividends. The market gave it the thumbs up, with the shares rallying 6.6% to £10.03.

Electricals and mobile handset seller Dixons Carphone (DC.) announced the next step in the turnaround of its UK mobile business including the closure of all standalone Carphone Warehouse sites and a new mobile offering to be rolled out later this year. Investors cheered the news, sending the shares up 12% to 70p.

Sofa and flooring seller ScS Group (SCS) revealed that it had delayed its full interim results due to changes in UK government policy towards the coronavirus, but it published preliminary figures for the first half showing sales remaining flat but net losses narrowing. Shares gained 9.6% to 168p.

Energy and engineering group Stobart (STOB) confirmed recent press speculation that it was in discussions with a ‘potential strategic airport development partner’ to sell a minority stake in Southend airport.

Discussions have been put on hold due to the coronavirus outbreak but the talks have put a ballpark valuation on the airport of between £700m and £800m. Stobart shares gained 7% to 41.2p.

On the losing side was high-street retailer Shoe Zone (SHOE) which decided to skip its 8p final dividend in order to conserve cash due to the sharp drop in footfall across its UK estate. Shares stumbled 27% lower to 73.5p.

TRADING PLACES

It was a busy day for directorate changes, starting with the news that Centrica (CNA) chairman Charles Berry was stepping down immediately following advice from doctors to reduce his workload. Non-executive director Scott Wheway is to take his place with immediate effect.

Payments and share registrar specialist Equiniti (EQN) announced that chairman Philip Yea was jumping ship to chair packaging firm Mondi (MNDI) in May, but there was no news on his potential successor.

Consumer credit firm Morses Club (MCL) announced that chief finance officer Andrew Hayward had left with immediate effect and would be replaced on an interim basis by previous finance chief and current non-executive Andy Thomson.

Property investment firm Harworth (HWG) said that chief executive Owen Michaelson would retire at the end of the year. The board has begun the process of looking for his successor.

 

FOR A LIST OF FTSE GAINERS AND LOSERS SEE HERE

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Issue Date: 17 Mar 2020