Corona panic selloff settles, FTSE trades higher
The panicked corona-triggered selloff in Chinese stock markets seems to have run its course for the moment and today both the Shanghai and the Shenzhen indexes closed higher, providing a chance for European markets to catch their breath.
The FTSE gained over 1.5% after opening, lifted by NMC Health and stocks with heavy exposure to Chinese markets including miners and luxury goods firms.
Two top company news items this morning came from plumbing supplier Ferguson which announced a large share buyback programme and plans to list in the US, and BP (LON:BP), which announced a forth quarter loss. Investors welcomed Ferguson’s decision to spin off its UK business Wolseley (LON:FERG) and shares gained nearly 5.5% on the news.
BP (LON:BP) rallied 3.5% once investors did all the maths on the company’s latest earnings because although the company’s earnings were lower than in 2018 due to lower oil prices, its replacement cost profit excluding one-off items was still $2.57 billion, significantly higher than the consensus analyst forecast.
Oil firms, pound lethargic
Oil markets also showed some improvement after China’s central bank stepped in to protect the economy from the effects of the coronavirus.
Brent crude recovered from a low of $54 touched late Monday to trade up 1.2% higher this morning. WTI briefly broke below the $50 mark but at that level started to look oversold and is now trading above $51.
Sterling trade has been fairly lethargic this morning with both pound/dollar and pound/euro trading in a very narrow channel around the flat line.