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Markets slide as US coronavirus cases rise
The FTSE 100 opened sharply lower on Friday, following three days of gains during a turbulent week. The index (^FTSE) was down 3.6% to 5,603.82 shortly after the start of trading in London.
It follows several days of gains for the index, although trading within sessions has been hugely turbulent.
“A weaker open after three days of gains is not altogether surprising against such an uncertain backdrop, as cases in the US rise above those in China, while the infection rate in Italy appears to be rising again,” said Michael Hewson, chief market analyst at trading platform CMC Markets.
European markets were also lower. The DAX (^GDAXI) in Germany opened down 2.1% and the CAC 40 (^FCHI) in France was 2.2% lower.
Futures were pointing to similar caution among US investors, after a strong performance for stocks on Thursday. S&P 500 futures (ES=F) were down 1.6%, Dow futures (YM=F) were down 1.4%, and Nasdaq futures (NQ=F) were off 1.5%.
InterContinental Hotel Group (IHG.L) was the biggest faller on the FTSE 100, shedding 8.5% in early trade. Last week the company scrapped its dividend and announced a cost cutting plan, as IHG warned its hotels were facing their lowest levels of demand in history.
Elsewhere, retailer Next (NXT.L) fell 3.9% after taking the “difficult decision” to shut its online operations.
Shares nosedived in previously state-owned Royal Mail (RMG.L) after it scrapped its dividend, suspended forecasts and shelved its major transformation plan over the coronavirus.
It expects to make a loss in the 2020-21 financial year, and said hitting targets in its ‘Journey 2024’ turnaround plan would take longer than anticipated.
The pandemic has hit business-to-business and advertising mail volumes, it said in an update on Friday, though parcel volumes have risen with more UK customers at home. It added that it could not rule out having to scale back its services.
Mike Ashley, the billionaire founder of Sports Direct, has written an open letter apologising for his company’s handling of the coronavirus shutdown.
“Given what has taken place over the last few days, I thought it was necessary to address and apologise for much of what has been reported across various media outlets regarding my personal actions and those of the Frasers Group business,” Ashley wrote in a letter sent to media on Friday.
The apology follows criticism of Sports Direct’s handling of the shutdown, which was ordered by the government on Monday.
Sports Direct initially told staff to report to work on Tuesday, arguing the business was in “essential” category as it helps keep the nation fit. Sports Direct backtracked on that plans following criticism but instead hiked the price of some sports equipment on its online shops.
The UK government has urged anyone buying or selling property to delay moving, as the housing market rapidly thaws over the coronavirus.
Even buyers and sellers who have exchanged contracts are encouraged to move only once official stay-at-home rules have been lifted, unless they cannot legally or practically reach an agreement to delay completion.
Property site Zoopla has predicted a 60% slump in transactions in the months ahead. Rightmove scrapped its dividend and stopped offering its investors financial guidance on Friday, and has already offered estate agents 75% relief on fees as their revenue slides.
Leading banks have agreed to extend mortgage offers by up to three months for buyers who have already exchanged. But some banks have also begun to cut back on new mortgage lending.
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