LONDON, April 9 ― Britain's FTSE 100 pulled back yesterday, as a rising global death toll crushed hopes that the coronavirus crisis was subsiding, while insurers took a hit over halts in dividend payments and Tesco warned of a surge in costs.
The blue-chip FTSE 100 index ended 0.5 per cent lower after closing at a near two-week high on Tuesday. It is still up 4.8 per cent for the week.
Shares of Aviva Plc and Direct Line, RSA and Lloyds of London-member Hiscox fell between 3.8 per cent and 7.9 per cent after saying they were cancelling 2019 investor payouts.
Both EU and British regulators had urged restraint on dividend payments and payment of bonuses as a buffer against potential losses from the pandemic. Legal & General, which said last week it remained committed to distributing its own dividend, was down 3.8 per cent.
Tesco, Britain's biggest retailer, fell 0.6 per cent as it forecast costs from the pandemic of up to £925 million (RM4.97 billion) and warned it was unable to give a profit forecast for the current year.
However, it defended its decision to pay dividend. Fellow retailers Sainsbury and Morrison fell 4 per cent and 0.8 per cent, respectively.
Stock markets globally had rallied in the past two days on signs that new coronavirus cases were plateauing in the hotspots including New York, Italy and France.
However, the number of deaths across the United States rose by a record of more than 1,800 on Tuesday even as the number of hospitalisations seemed to be levelling off in New York state.
“Markets have come to a realisation that it's not easy to have a V-shaped recovery. Even if we are looking at prospect of easing restrictions, there is still lots of uncertainty,” said Ulas Akincilar, head of trading at online platform INFINOX.
“Going forward we will see more negative forecasts for dividends, stock buybacks and revenue.”
Companies listed on the pan-European STOXX 600 are expected to post a 30.2 per cent slump in second-quarter earnings, according to Refinitiv data, versus a 21.9 per cent decline forecast just a week ago.
With the UK death toll rising to 7,097, London Mayor Sadiq Khan said Britain is nowhere near lifting the lockdown measures as the peak is still more than a week away.
Meanwhile, British Prime Minister Boris Johnson was “clinically stable” in intensive care and responding to treatment for Covid-19 complications after testing positive nearly two weeks ago.
Midcap shares, up 1.9 per cent, extended gains for a third straight session.
Online fashion retailer ASOS Plc soared 28 per cent after saying it had raised £247 million via a placing, to help it shore up its finances against any prolonged business downturn.
Recruiter PageGroup rose 5.7 per cent after it said it would shed another 250 staff in April and cut directors' pay by 20 per cent in efforts to ride out the health crisis. ― Reuters
