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FTSE 100 closes lower as coronavirus fears and corporate updates hit equities

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  • FTSE 100 index closes nearly 43 points down
  • FTSE 250 up 116 points
  • GVC Holdings dips after Peel Hunt cuts target price

5.10pm: FTSE 100 closes in red

FTSE 100 index closed on Friday in the red, as it did yesterday, as coronovirus fears are still hitting equity markets.

Britain's blue-chip index closed down nearly 43 points at 7,409.

The FTSE 250, conversely, went higher, gaining over 116 points at 21,790.

"The FTSE 100 is lower this afternoon as health care, energy and banking stocks are in the red," said David Madden, market analyst at CMC Markets.

"Corporate updates triggered the declines in the pharma sector as well as the banking industry. Dealers are still worried about the health emergency in China as the situation isnt showing any signs of improving."

Over on Wall Street, the picture is also mixed. The Dow Jones Industrial Average lost over 28 points at 29,395. The broader-based S&P 500 is ahead by nearly five points, while the Nasdaq added around 19 points. Against the US dollar, the pound is down 0.05% to US$1.3035.

On the company front, the top loser on Footsie was Royal Bank of Scotland (LON:RBS), which plunged 6.8% to stand at 213.10p on outlook news.

The bank is to cut back the NatWest Markets division – its investment banking arm, so lending is likely to become a more important part of the business, noted analyst Madden.

"In light of the depressed interest rate environment, the income from lending is likely to remain under pressure. In a historic move, RBS Group will change its name to NatWest Group later this year, presumably the decision was motivated by the desire to cast off the image of the firms historic bailout in 2008 – the largest bailout in Europe," he added.

3.00pm: Novacyt continues to be in demand as COVID-19 fears linger

US blue-chips have opened higher, albeit not as impressively as expected after some underwhelming industrial production numbers.

The 30-share Dow Jones Average was down 17 points (0.1%) at 29,407 but the broader-based S&P 500 was up 3 points (0.1%) at 3,376.

US industrial production in January was down 0.3%, which was a slightly heavier fall than 0.2% decline economists had been expecting. Manufacturing outputs 0.1% fall was in line with the consensus forecast.

“Total production was depressed by a second straight plunge in utility output, thanks to the very mild winter weather. Output in the sector fell by 3.9% m/m, after Decembers 6.2% drop,” reported Pantheon Macroeconomics Ian Shepherdson.

“Utility output is now well below trend and a huge rebound will come when temperatures revert to seasonal norms, but note for now that the Jan decline likely constrained real consumers' spending last month. People dont realize in real-time that they have saved money when winter temperatures are warmer than usual, so the drop in real spending on utility energy will not immediately be offset by gains elsewhere,” he added.

US retail sales rose 0.3% in January, in line with the consensus.

On the home front, the FTSE 100 has topped loitering around last nights closing level like a thief casing a joint he plans to rob and has ebbed to 7,428, down 24 points (0.3%).

The COVID-19 virus remains on the markets mind but its an ill wind that blows nobody any good and Novacyt SA (LON:NCYT), which has developed a “research use only” diagnostic test for the virus continues to be in demand, with the shares up 26% today to 98p; a month ago you couldve bought them for less than one-sixth of that amount.

2.20pm: US indices to edge higher

The Footsie has fallen into the red but not to an extent that would have fund managers venturing out on to the window life to contemplate life's ups and downs.

The index of leading shares is down 4 points (0.1%) at 7,448, despite sterling drifting a fifth of a cent lower against the US.

Talking of the US, the Dow Jones is tipped to open around 21 points higher at 29,444 while the broader-based S&P 500 is seen opening its account at 3,379, up 5 points on last night's close.

1.30pm: Blue-chips mixed

If you imagine the FTSE 100 as a see-saw it is one that could definitely do with a drop of oil today.

The index is practically unchanged and since 9.30am has been trading between 7,450 and 7,470.

The mid-cap FTSE 250 is making a better fist of things, up 74 points (0.3%) at 21,748, despite bookmaker GVC Holdings PLC (LON:GVC) sliding 32.6p to 833.8p after Peel Hunt PLC trimmed its price target by 20p to 1,030p.

The same broker nudged up its price target for GVCs sector peer 888 Holdings PLC (LON:888) to 215p from 200p while also bumping up William Hill PLCs (LON:WHM) price target to 260p from 250p.

888 is up a halfpenny to 135.4p but William Hill is down 2.35p at 178.65p.

12.40pm: Equities in a holding pattern

The FTSE 100 is clinging on to meagre gains despite banks being in the doghouse.

Londons index of blue-chip shares was up 4 points (0.1%) at 7,456, no thanks to taxpayer-owned lender Royal Bank of Scotland Group PLC (LON:RBS), which is down 8.4% at 209.5p after it pushed back the target date for hitting its long-term profit goals.

The bank has also decided the RBS brand is so toxic – this side of the Scottish border, at least – it will change its name to Natwest Group.

“The results today have been clouded by the structural overhaul of the now Natwest Group. This moves the focus away from the core philosophy of driving shareholder returns to promote a more sustainable core business and alongside the cautious outlook surrounding future growth, explains the trepidation in the share price this morning,” said Joe Healey, an investment research analyst at The Share Centre.

“It appears not only RBS but others are entering a period of change in the industry pushed by an evolving market environment and stakeholder interests. The group has a history of restructuring; however, time will tell whether this is the right move for the historic bank,” Healey said.

Sector peer, Lloyds Banking Group PLC (LON:LLOY) was down 1.4% in sympathy while Barclays PLC (LON:BARC), whose chief executive officer Jes Staley is being investigated for his past connection with convicted sex offender Jeffrey Epstein, was off 1.1%.

Shares in Middle East hospitals operator NMC Health PLC (LON:NMC) have been on their sick-bed ever since the hedge fund Muddy Waters launched a devastating attack on its accounting policies.

The shares fell a further 4.1% today after it made a statement about the cloudy status of the shareholdings of some its major stakeholders.

The company has received a notification from the advisers to Khalifa Bin Butti and Saeed Bin Butti ostensibly explaining who owns what, while founder B R Shetty has also informed the company of some recent share dealings.

Judging by NMCs stock market announcement, it is not convinced the notifications have made things clearer.

Meanwhile, Khalifa Butti Omeir Bin Yousef has resigned as a director of the company.

UAE's NMC Health target slashed by 85% at SocGen https://t.co/cHA5k2qSo0

— Sue Hutton (@suehutton) February 14, 2020

10.55am: Footsie turns positive

The FTSE 100 index had pushed into positive territory by late morning, rallying on expectations for a recovery by US stocks today following overnight falls on Coronavirus fears.

Around 10.55am, the UK blue-chip index was 6 points higher at 7,458.

Joshua Mahony, senior market analyst at IG – which is currently looking for the Dow Jones Industrial Average to open 47 points higher – said: “A bullish Asian session hints at the potential for European and US markets to look beyond the coronavirus fears that remain at the back of the collective market mindset.”

But, he added: “That underlying coronavirus risk is showing its face in the havens, with gold, in particular, gaining ground throughout the week despite stock market gains.”

Mahoney also noted that European markets had been underperforming due to the release of German growth figures which exhibited a lost quarter of 0% growth in the final three-months of 2019.

He said: “The German economy has gone from being the bastion of eurozone growth to perhaps the greatest hindrance, with the industrial powerhouse continuing to suffer under the wrath of Donald Trumps combative approach to global trade.

“Recent factory orders and industrial production figures out of Germany had highlighted a tough end to 2019, and those expectations go some way to explain the lack of sharp euro declines this morning. The weakness in Germany can be felt in the wider eurozone growth figures, with the Q4 reading of 0.9% representing the lowest growth since Q1 2015.

“The worrying part for eurozone growth is that the weakness seen throughout both Germany and wider region came prior to the coronavirus crisis, with any knock-on impact likely to push Germany into negative growth.”

9.45am: The Footsie spins its wheels

Its a bit of no-score draw for Londons blue-chips this morning with a slight softening of sterling offsetting negative reaction to corporate news flow.

The FTSE 100 was down just under a point at 7,451.

Sterling was down a tenth of a cent against the US dollar, providing some incentive to invest in the big dollar earners among Footsie constituents but that has been scant consolation for AstraZeneca PLC (LON:AZN) shareholders, where the share price is down 2.1% after the drugs giants trading update.

“Last year was a good one for AstraZeneca, having twice raised sales guidance. This positive earnings momentum has led to a fairly decent set of full year results which highlight its progress including regulatory approval for several new medicines.

“Unfortunately the coronavirus threatens to disrupt earnings in China, one of its key markets. It is being cautious and assuming there will be an impact to earnings, which is the right thing to do,” said Russ Mould, the investment director.

LATEST: @AstraZeneca $AZN sees "unfavourable" #coronavirus impact as Tagrisso sales slip, @etain_lavelle reports https://t.co/wJphFTSmog pic.twitter.com/EVgUbR9OnJ

— Market Intelligence: Healthcare (@SPGMIHealthcare) February 14, 2020

On the macroeconomic front, the German economy stagnated in the fourth quarter of last year, showing no change from the previous quarter.

On the year, the economy grew by 0.4%.

“Some weeks ago, we had started to investigate which form the recovery could take from the alphabet soup of options. Will it be a V for a strong rebound, a U for a longer bottom followed by a strong rebound, a J for a longer period of stagnation followed by a weak rebound, an L for a long period of stagnation or even a W for a double dip recession? Todays data shows that the alphabet soup has been taken off the menu for the time being. Stagnation, with a risk of a technical recession, currently looks like the only dish served,” said Carsten Brzeski, the chief economist at ING Germany.

8.35am: Dull end to the week

The FTSE 100 took its cue from Wall Street in early trade on Friday as it opened in the red amid continuing worries over the coronavirus outbreak.

The index of UK blue-chips opened down 30 points at 7,421.34

An early corporate victim of the flu-like illness, which has claimed more than 1,300 lives, was revealed as AstraZeneca (LON:AZN), which counts China as one of its main markets.

The drugmaker's shares fell 3.5% in early deals as its fourth-quarter earnings undershot expectations and it warned of the impact of the epidemic.

Royal Bank of Scotland (LON:RBS) wasnt far behind as the tenure of new boss, Alison Rose, started with a whimper rather than a bang. Its latest trading statement prompted a 3.5% fall in the stock.

“Every rose has its thorn; scratch beneath every RBS quarterly update and youll find a sting or two,” said Neil Wilson of Markets.com.

Staging what can best be described as a dead cat bounce, was Centrica (LON:CNA), up 1.5%, which led the risers after having the bejesus knocked out of it on Thursday after a rather depressing update on trading.

Proactive news headlines:

Verona Pharma PLC (LON:VRP) (NASDAQ:VRNA) said the results from a successful phase IIb clinical trial of its drug for chronic obstructive pulmonary disease (COPD) have been published in a peer-reviewed scientific journal. Respiratory Research carried the data from Veronas four-week, 400-patient study first released in 2018. The results showed the companys drug, ensifentrine, produced a clinically and statistically significant improvements in lung function at all doses.

SDX Energy PLC (LON:SDX) has kicked off the drilling of the Salah (SD-6X) well at the South Disouq project in Egypt. The well will be drilled down to a depth of 9,000 feet and it is expected to complete in late March or early April.

Europa Metals Ltd (LON:EUZ) said the independent geotechnical study of its Toral project in Spain has been completed. The study confirmed the cut and fill method, rather than sub-level stoping, as the best method for the mining model.

Peter Mason has retired as the chairman of the life assurance and pensions management firm Chesnara PLC (LON:CSN). He has been replaced by Luke Savage, a highly experienced company director who was the chief financial officer of Standard Life Aberdeen PLC from 2014 to 2017; before that he was the director of finance and operations at Lloyds of London.

Metal Tiger PLC (LON:MTR) is ploughing a further US$1.5mln into Kalahari Metals, giving it just over 62% of the Botswana-focused copper explorer. The natural resources investor will also receive a 2% net smelter royalty over Kalaharis seven wholly-owned licences.

Ariana Resources PLC (LON:AAU) has received results of due diligence drilling at the Salinbas gold project in Turkey carried out by its proposed partner at the site, Proccea Construction. The AIM-listed explorer said assay results from 600 metres of due diligence drilling had shown “good correlations” with its own drilling results at the site.

Bahamas Petroleum Company PLC (LON:BPC) has confirmed it has now closed the initial subscriptions into its new Bahamian mutual fund, receiving around US$914,000 (c£700,000). The fund was set up exclusively to enable investors in the Bahamas to invest in the companys exploration campaign in the islands. Subscriptions into the fund were priced at the equivalent of 2p per underlying BPC share which was the market price at the time, early January.

Ergomed PLC (LON:ERGO), a company focused on providing specialised services to the pharmaceutical industry, said that four of its directors have acquired ordinary shares in the company, all at 4.56p per share. It noted that three non-executive directors – Rolf Soderstrom, Dr Jim Esinhart, and Ian Johnson – all purchased 10,000 ordinary shares, while its chief operating officer, Lewis Cameron acquired 10,910 shares.

6.35am: Indecisive start predicted

London equities are set to make an indecisive start, with sterling stabilising after yesterdays sharp rise following the resignation of Sajid Javid as chancellor of the exchequer.

Spread betting quotes indicate that the FTSE 100 will open 3 points higher at 7,455.

“Are markets falling out of love with stocks?” wonders Edward Moya at Oanda on Valentine's Day. “Fridays in 2020 have not Read More – Source