Coronavirus: FTSE 100 falls lower amid investor concerns about global growth
The FTSE 100 tumbled after the open as investor sentiment was dampened by concerns over global economic growth being hampered by the coronavirus epidemic.
Britain’s blue-chip index opened slightly up, but soon reversed gains and fell as much as 1.31 per cent in morning trading. The FTSE 250 slipped as much as 1.10 per cent.
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European equities failed to mirror the gains made by US and Asian markets overnight, after the IMF warned that the outbreak would severely impact global economic growth.
The FTSE’s European peers also slipped into the red, with Germany’s Dax and France’s CAC 40 falling as much as 0.89 and 0.94 per cent respectively.
Last night, the International Monetary Fund pledged $50bn of aid for middle and low-income countries hit by the coronavirus outbreak, warning that the epidemic has already pushed 2020’s global growth below last year’s level.
IMF managing director Kristalina Georgieva said it was difficult to predict how far growth would fall, or how long the impact of the outbreak would last.
The falls booked by European indices come despite the significant recovery booked by US equities yesterday in the wake of Joe Biden’s strong Super Tuesday performance, which helped boost healthcare stocks, and growing indications of a coordinated response to the Covid-19 outbreak.
The benchmark S&P 500 closed 4.22 per cent up on Wednesday, with the Dow added 4.53 per cent.
Asian markets also made gains overnight, with Hong Kong booking its strongest day of trading in one month on hopes that global central banks would ramp up policy efforts to limit the economic impact of the coronavirus.
The territory’s Hang Seng index climbed 2.08 per cent, while the Shanghai Composite Index added just shy of two per cent. Japan’s Nikkei 225 gained 1.09 per cent.
ITV was among the FTSE 100’s biggest fallers in morning trading, after the broadcaster warned that coronavirus was hitting advertising demand.
Shares fell as much as 9.23 per cent this morning, despite ITV reporting higher than expected earnings for 2019.
The index was also hit by a series of falls in companies trading ex-dividend — stocks trading without the value of their dividend.
These included Asia-focused bank Standard Chartered, housebuilder Persimmon, and miners BHP and Rio Tinto.
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Aviva rose as much as 4.40 per cent after the insurer reported a jump in profit for 2019, but later lost some of these gains to sit at 1.89 per cent up.
Aviva also warned that the coronavirus outbreak had exacerbated “significant uncertainty” at the start of 2020.