ADVFN Morning London Market Report: Thursday 13 February 2020

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London open: Stocks fall amid renewed concerns about coronavirus

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London stocks fell in early trade on Thursday amid renewed concerns about the coronavirus.

At 0830 GMT, the FTSE 100 was down 0.9% at 7,465.81.

Spreadex analyst Connor Campbell said: “Just as the markets seemed to break free of their coronavirus fears, an alarming spike in the number of deaths and new cases sent Europe lower.

“Arguably the main driver of Wednesday’s growth was the hopes that the outbreak in China was being contained. Well, changes to the way in which authorities calculate figures surrounding the illness revealed a worse situation than first thought, with a 242 person jump in the number of deaths and a 15,000 surge in total cases. Understandably this spooked investors.”

On home shores, the latest survey form the Royal Institution of Chartered Surveyors showed that house prices rose in January at the fastest pace in nearly three years as December’s election boosted sentiment.

The net balance of surveyors reporting that house prices had risen over the last three months increased to +17 in January from -2 in December, coming well above consensus expectations of +3.

RICS chief economist Simon Rubinsohn said: “The latest survey results point to a continued improvement in market sentiment over the month, building on a noticeable pick-up in the immediate aftermath of the General Election.

“The rise in new sales instructions coming onto the market is a noteworthy and much needed development, given the lack of fresh listings over the past few years had pushed stock levels to record lows.

“It remains to be seen how long this newfound market momentum is sustained for, and political uncertainty may resurface towards the end of the year. But, at this point in time, contributors are optimistic regarding the outlook for activity over the next twelve months.”

In equity markets, shares of British Gas owner Centrica tumbled as it blamed the UK government’s price cap, nuclear power station outages and lower gas prices for a 35% slump in annual profits.

Barclays was under the cosh on news that the Financial Conduct Authority and the Bank of England are investigating past links between the bank’s chief executive Jes Staley and the dead American paedophile Jeffrey Epstein.

In a statement about effectiveness tests for directors, Barclays said it had taken into account press reports linking Staley and Epstein, a convicted paedophile who was arrested for sex trafficking in 2019. Barclays said Staley had no conduct with Epstein since becoming CEO in 2015 and that after an internal review he has the full confidence of the board.

Posting a 25% increase in reported pre-tax profit, the bank said the FCA enquired about Staley’s relationship with Epstein, who died in jail in August. The FCA and the BoE’s Prudential Regulatory Authority then started an investigation into Staley’s account of his relationship with Epstein and Barclays’ description of the relationship to the FCA.

Going the other way, Lancashire Holdings was on the rise as it posted a jump in full-year profit and an improvement in its combined ratio.

Food delivery service Just Eat Takeaway.com ticked higher after saying it swung to a full- year profit as increased scale offset higher investment in its Scoober business.

 

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