FTSE lost steam on Wednesday as mounting global deaths from coronavirus took its toll on sentiment with new cases reported in China. The FTSE 100 index lost 1.3% to 5,362.16 points.
Overnight trading across Asia was mixed with China’s SSE index down 0.2% while Japan’s Nikkei 225 index closed up 2%,
Brent Oil crude prices were 1% firmer at $24.8 and Gold prices nudged up 0.2% to $1,651 while the pound was trading slightly lower against the US dollar at $1.23.
Shares in UK retailer Tesco (TSCO) dipped 3.6% after it reported a 12.6% rise in adjusted operating profits to £2.9bn and hiked its dividend 59% to 9.15p at a time when most companies were cutting.
Looking forward, Tesco estimated that the coronavirus crisis could put a dent in its performance of between £650m and £925m, due to additional payroll, distribution and store expenses.
One of the biggest gainers was fashion group ASOS (ASC:AIM), up 32% to £20.5 after successfully raising £247m of new shares at £15.6, a slight premium to the prior day’s close, and representing 18.8% of the share capital.
The company is also in discussions with banks to secure a £60-to-£80m 12 month extension to the existing credit facility of £350m to ensure additional operating flexibility through the crisis.
The financing news overshadowed the interim results which showed revenues up 21% to £1.6bn and gross profit up 17% to £750m.
Going in the other direction were shares in insurer Aviva (AV.) which dropped a tenth to 241p after it scrapped its final dividend following a request from regulators amid ‘unprecedented challenges’ caused by the Covid-19 pandemic.
Fellow insurer RSA (RSA) suspended its final dividend of 15.6p a share and said it plans to publish its first-quarter Trading Update on or about 7 May 2020. It is not able not able to ‘accurately predict the various impacts of the COVID-19 epidemic on RSA for the current financial year.’ The shares gave up 4% to 386p.
Also scrapping its dividend today was packaging company DS Smith (DMDS), amid other cost saving measures, citing uncertainty created by the coronavirus crisis.
DS Smith noted that supplies into the grocery sector had been very busy particularly in ambient food, drinks, hygiene, frozen food and dry packaged grocery categories.
E-commerce had also been strong in most categories but increasingly in everyday essential products. The shares nudged up 0.9% to 295p.
Scientific, medical and business analytics provider RELX (REL) said it had decided not to proceed with the next stage of a planned share buyback due to uncertainty caused by the coronavirus crisis.
The company said the current tranche of its share buyback programme would be completed on 22 April, with £150m of the planned full year total of £400m having been deployed.
The three largest divisions, accounting for 87% of profits saw slightly higher underlying revenues growth in the first-quarter, with limited impact from the virus. The shares gained 0.5% to £17.3.
Shares in Online travel firm On The Beach (OTB:AIM) surged 26% to 251p after the company said it had extended the term of its credit facility of £50m to December 2023.
The company also cancelled the dividend and cut its marketing spend to zero.
