UPDATE 1-FTSE tracks worst day in seven weeks after China virus scare

London's FTSE 100 was on course for its worst day since early December on Tuesday, with global markets rattled by the spread of a new coronavirus in China, while traders anticipated jobs data that could dictate the Bank of England's policy.

China reported the fourth death from the virus, which is being likened to the deadly 2002/2003 spread of Severe Acute Respiratory Syndrome (SARS), just ahead of the Chinese Lunar New Year holiday. The FTSE 100 shed 1%, as luxury and travel stocks led losses. Asia-exposed Burberry slid 3.3%, British Airways-owner IAG fell 2.3% and InterContinental Hotels slipped 1.7%. The FTSE 250 gave up 0.6%.

"We don't know how bad this will be, but with authorities confirming the disease can spread between humans, it's wise to be on guard for this outbreak to get worse before it gets better," Markets.com analyst Neil Wilson said. However, low-cost airline EasyJet outshone the blue-chip bourse with a 4.4% rise after it forecast improvement in its first-half winter performance.

With the likelihood of the BoE cutting interest rates surging in recent weeks, data scheduled on Tuesday could go a long way in cementing the central bank's stance on whether or not to pull the trigger on an expected 25 basis point cut. "Data has turned notably softer and the BoE doesn't want to risk allowing weakness to become entrenched ... There is a sense the bank doesn't want to get behind the curve of market expectations," Wilson said.

"It would be following the (U.S.) Fed's playbook in cutting early in order to prevent a downturn." A combination of subdued broader sentiment, bets of lower rates and Swiss bank UBS cutting its mid-term targets led a sub-index of financial stocks to its lowest since mid-December.

But CMC Markets analyst Michael Hewson said he was doubtful if a 25 bps cut would have the effect policymakers desired, given that interest rates were already close to record low levels. "With wages growth still fairly robust and unemployment still low there doesn't seem to be any risk in the Bank of England exercising a little patience," he said.

Among midcaps, electrical products retailer Dixons Carphone starred with a 4.7% gain, after flat underlying revenue over the Christmas period kept it on track to meet its annual targets.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)