FTSE 100 leaps after WHO eases coronavirus fears

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The FTSE 100 rose as WHO declared the coronavirus an emergency in China, but not the rest of the world
The FTSE 100 rose as WHO declared the coronavirus an emergency in China, but not the rest of the world

The FTSE 100 stormed ahead today, more than clawing back the losses incurred yesterday as investors’ fears over the spread of the coronavirus mounted.

The World Health Organisation yesterday stopped short of declaring the outbreak in China an emergency for the rest of the world. 

European equities gained in response today, before posting further jumps on positive economic data.

Read more: FTSE 100 slumps on increased coronavirus fears

Having surged as much as 1.6 per cent during the day, London’s blue chip index ended the session at 7,585.98, 1.04 per cent up on yesterday’s close.

Autotrader, the second hand car seller, rose 3.75 per cent to lead the FTSE risers. 

Investment company Hargreaves Lansdown was the second highest riser with gains of 3.41 per cent, 

Just Eat shares fell 1.98 per cent as a UK competition probe cast doubt over its Takeaway.com merger. The Competition and Markets Authority is already investigating Amazon’s investment in Deliveroo on similar grounds.

The FTSE 250 also climbed 1.04 per cent during the session. 

This was despite Travelex owner Finablr weighing on the index as it plunged as much as 27 per cent following the announcement that owner B. R. Shetty had pledged more than half the company’s stock as collateral for debts incurred buying the forex firm. 

Travelex was hit by a devastating cyber attack at the start of 2020. 

FTSE 100 risers

  • Autotrader plus 3.44 per cent to 595.6p
  • Hargreaves Lansdown plus 3.1 per cent to 1,831.5p
  • Morrison’s plus 2.99 per cent to 187.65p
  • Rentokill plus 2.95 per cent to 481.4p
  • Experian plus 2.9 per cent to 2,693p

FTSE 100 fallers

  • NMC Health minus 4.06 per cent to 1,347.5p
  • Just Eat minus 1.7 per cent to 865.6p
  • Whitbread minus 1.22 per cent to 4,302p
  • ITV minus 0.81 per cent to 141p

Economic data offers relief to stock markets

Germany’s Dax added 1.40 per cent, boosted by gains made by pharmaceutical giant Bayer after reports of a possible out-of-court settlement of a US trial over allegations its Roundup weed killer causes cancer.

A rare bright spot in German economic data also pushed the stock market higher, as economists suggested that storm clouds were beginning to fade from the country’s economic horizon.

Read more: ‘Storm clouds lift’ as German economy grows again

Read more: UK PMI: Economy hits 16-month high as Bank considers rate cut

France’s CAC 40 added 0.87 per cent, despite a flash composite PMI reading for the country showing slightly slower growth than expected. 

In the UK, the composite reading put economic growth at a 16-month high. The unexpectedly strong showing has led many economists to predict that the Bank of England’s will decide against cutting interest rates when its monetary policy committee meets next week. 

“Thursday next week arguably heralds the least predictable UK MPC announcement for some time,” said,” said Investec analyst Philip Shaw.

“Over the summer, members were still emphasising that a strengthening in the economy would result in rates needing to rise gradually to meet the inflation target. Subsequently the economy has shown signs of weakening, inflation has fallen and the centre of gravity of interest rate discussions has shifted,” he added. 

Although US equities made modest gains on the open they were more subdued than their European peers, and slipped into the red following a flash PMI reading that put manufacturing at a three-month low. 

The Dow and Nasdaq were both sitting around 0.20 per cent by 4.30pm UK time, while the S&P 500 edged down 0.42 per cent. 

Overnight, Asian markets were muted on the eve of Lunar New Year celebrations, following sell-offs on Thursday over growing coronavirus concerns.

“WHO’s decision not to designate the outbreak an international emergency has clearly had a restorative effect on the markets,” said AJ Bell investment director Russ Mould. 

Read more: Just Eat shares fall as CMA probes Takeaway.com merger

Jasper Lawler, head of research at London Capital Group, agreed that the decision “has taken the fear gauge down a few notches”.

But Lawler also warned: “The travel restrictions and cutback Lunar New Year celebrations will  have some kind of dampening effect on Chinese growth. Only, based on what the WHO is saying, the same problem will not be felt globally.”

Coronavirus death toll prompts China travel lockdown

China bolstered measures to contain the coronavirus overnight as the death toll rose to 25.

A week-long holiday to celebrate the Chinese New Year started today, an annual event that encourages hundreds of millions of people to travel home or abroad.

Shanghai Disneyland has closed the theme park from tomorrow until further notice as the number of infected totalled 830.

Read more: Coronavirus: China widens travel lockdown as death toll rises

China also suspended public transport in 10 cities within the Hubei province where the coronavirus outbreak was first seen. Beijing has also closed temples for the Lunar New Year and is rushing to build a new hospital with 1,000 beds, using prefabricated buildings.

While all deaths are so far within Chinese provinces, the virus has spread to the US, Japan, Thailand, Vietnam, Singapore and South Korea. 

Meanwhile the UK has tested 14 people for the coronavirus, with five so far returning negative results.

Chinese markets were closed for the week-long holiday, but Hong Kong’s Hang Seng index added 0.15 per cent.

Japan’s Nikkei 225 closed 0.13 per cent higher.