London stock markets chalked-up the worst weekly performance since the 2008 financial crisis despite clawing back a fraction of lost territory in Friday trading as earlier strength flagged.
The benchmark FTSE 100 index closed 2.5% up at 5,366.11 on Friday, cementing a near 18% weekly loss, the biggest since a 21% drop in October 2008. That slump made it the third week running of heavy declines as fears took grip that governments were not doing enough to stop the coronavirus epidemic could wreck global economies.
Governments in countries which have been hardest-hit by coronavirus, such as Italy and South Korea, have implemented bans on the short-selling of stocks in order to try to restore order to their respective markets.
Having lost 10.9%, or £160bn, in value yesterday, its biggest ever one-day points fall and the worst day since the 1987 crash after the Trump administration banned Europeans from traveling to the US, the FTSE managed a modest recovery driven by the mining sector.
Yet mid caps were slipped over by investors, with the FTSE 250 again succumbing to selling pressure to lose 1% to 15,562.
Brent crude oil prices staged their own recovery, up 2% to around the $34 per barrel while gold, which actually fell yesterday, continued to come off recent highs, the spot price losing 4.2% at $1,516.05 per ounce.
Leading the gainers were miners Evraz (EVR) and BHP (BHP), both up 12% or so at 228.8p and £10.54 respectively, closely followed by Rio Tinto’s (RIO) 10% gain to £32.74.
Cruise ships operator Carnival (CCL) was the biggest FTSE loser of the day, falling 10% to £11.61.
PRECIOUS LITTLE COMPANY NEWS
With investors still shell-shocked from the sell-off it was a typically slow news Friday for UK stocks.
Holidays and insurance group Saga (SAGA) announced that, following the government's advice that people aged 70 and over shouldn't go on cruises, it would suspend cruise operations until 1 May.
The move was likely to cost Saga between £10m and £15m in lost profits over the next six weeks but the firm has £33m of net cash and a £100m credit facility it can fall back on to ease any working capital strains.
That apparent balance sheet flexibility saw shares in the company actually rise, ending the day roughly 1% up at £15.16p.
Oil explorer Premier Oil (PMO) moved to reassure investors that despite the collapse in oil prices it was on a firm footing, having hedged around 30% of this year’s production at an average price of $60 per barrel and that it had plenty of liquidity to ride out a phase of lower prices.
The firm had also reviewed its capital spending and based on a $100m reduction and no change in the oil price from current levels it would end the year roughly cash-flow neutral.
The news sent the shares soaring, up 27% to 16p.
HOSPITALS HELPING HAND
Hospital owner Spire Healthcare (SPI) rallied 4% to 87.75p on announcing that it had offered support to Britain’s National Health Service to assist with its response to the coronavirus outbreak.
The exact nature, extent and timing of the support had yet to be determined, Spire said.
In another example of the unexpected knock-on effects of coronavirus, games maker Codemasters (CDM:AIM)announced that due to the decision by Universal Pictures to delay the cinema release of ‘Fast & Furious Crossroads’ from May 2020 until April 2021, timing for the launch of its tie-in game was now ‘uncertain’.
Shares in games designer fell 4% to 227.5p.
On a more positive note, drug discovery firm Redx (REDX:AIM) revealed that it had received a takeover approach from Yesod Biosciences at 15p per share and was in discussions with its major shareholders on what to do next.
Redx stock rocketed 190% higher to 14.5p.
SMALL CAP WRAP
Graphene-based products maker Directa Plus (DCTA:AIM) firmed 6% to 65p, having forecast revenues to treble in the first quarter.
Cold storage and logistics company Norish (NSH:AIM) stayed flat at 84p as it posted a 20% rise in annual profit after bolstering its margins.
In a sign of how the coronavirus could affect the corporate calendar, video advertising technology company Tremor International (TRMR:AIM) said it had cancelled a capital markets event due to be held on 2 April as a precaution.
Tremor shares fell a little more than 3% to 121p.
Smaller oil companies also moved to calm shareholders, though with mixed results.
Tower Resources (TRP:AIM) fell 3% to 0.33p even as it insisted its Thali prospect offshore Cameroon remained an ‘attractive’ asset despite the recent rout in oil prices.
And oil and gas project investor Reabold Resources (RBD:AIM) lost earlier gains to stay flat at 0.34p after stating that it and its portfolio companies were ‘financially robust’ and could take advantage of acquisition opportunities.
