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UPDATE 1-UK shares inch higher after previous sell-off on coronavirus fears

Reuters | London | Updated: 28-01-2020 15:02 IST | Created: 28-01-2020 14:50 IST
UPDATE 1-UK shares inch higher after previous sell-off on coronavirus fears
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Britain's benchmark stock indexes rebounded modestly after shedding more than 2% in the previous session, as dealers still assess the potential fallout from the fast-spreading coronavirus.

After suffering its worst day since early October 2019, the FTSE 100 edged up 0.1% on Tuesday. The FTSE 250 rebounded from its biggest one-day fall in more than a year to add 0.1% by 0900 GMT. Midcap Irn-Bru maker A.G. Barr soared 14%, on course for its best day since October 2005, after it forecast annual profit to be at the top end of the current market view.

Housebuilder Crest Nicholson rose 2.3% after it said British Prime Minister Boris Johnson's sweeping victory in the general election last month would support the sector in the near term. Shares of fellow housebuilders, which were subdued last year in the face of Brexit-related uncertainty, also advanced. Barratt and Taylor Wimpey rose roughly 1%.

An index of leisure and airline stocks clawed back some losses from its worst day in more than three-and-a-half years, and rose 0.6%. InterContinental Hotels gained 1.8%. However, luxury brand Burberry gave up 1.3%, a clear sign that traders remain uncertain about further potential headwinds as a result of the virus outbreak.

BUYING THE DIPS Financial markets have been battered in recent sessions as the death toll from the virus mounts and China scrambles to impose a string of measures to contain its spread.

Britain's blue-chip index has lost more than 1% this month, while the midcaps have shed over 2%. Markets.com analyst Neil Wilson suggested the recent slide in stock markets made for a more attractive entry point into equities for some investors.

"Buying the dips is alive and well - I would anticipate dips to be buying opportunities for many in the market," he said. However, Wilson remained sceptical of the market's ability to sustain the gains due to limited visibility of the situation in China and its potential impact.

Among smaller stocks, tourism and insurance firm Saga added 3.5% after saying it was on track to meet its annual profit outlook, despite a one-off charge related to the collapse of Thomas Cook last year. By contrast, Nostrum Oil & Gas slumped 8% after it forecast lower revenue for 2019 and said its production would drop next year.


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