LONDON, Feb 25 — London-listed stocks fell further today after dropping to a four-month low the day before, as an increase in Covid-19 cases outside China heightened fears of greater damage to the world economy.
The blue-chip FTSE 100 lost 0.2 per cent, a day after logging its worst session since 2015 on a surge in virus cases in South Korea, Iran and Italy.
The domestically focussed mid-cap index was flat. Sectors most exposed to China, including airlines, mining companies and oil companies, were little changed.
“I don’t think by any means the tensions that caused the sell-off yesterday have passed in the space of 24 hours,” said Jeffrey Halley, senior market analyst at OANDA.
Fears of a pandemic had wiped US$1.5 trillion (RM6.4 trillion) off the value of world equity markets yesterday and put London’s main stock index on course to decline for a second straight month.
Wall Street also suffered its worst day in two years, prompting the White House to seek about US$2.5 billion from Congress to fight the virus. More than US$1 billion is earmarked for developing a vaccine.
As chances grow of a bigger jolt to global supply chains from the health crisis, traders are counting on central banks around to world to step in and inject more cash to maintain economic growth.
Bets the Federal Reserve will cut interest rates in March stand at over 14 per cent, compared with just 3.8 per cent a month ago. China’s central bank has already taken several such measures and indicated that it stood ready do to more.
Gains on the FTSE 100 were led by insurer Prudential Plc after hedge fund Third Point amassed a stake of over US$2 billion and called on the company to split into two.
Credit investor Pollen Street Secured Lending soared 7.5 per cent to its highest since July 2017 after saying it was in talks with Waterfall Asset Management about a sale.
British engineer Meggit fell 3.7 per cent to a seven-month low after warning of the effect from the suspended production of Boeing’s 737 MAX aircraft and disruptions from the coronavirus outbreak.
Building materials supplier SIG Plc slid 12.3 per cent to the bottom of the mid-cap index after saying it was replacing Chief Executive Meinie Oldersma as it seeks to stem a slide in its business caused by a weak European construction market. — Reuters
