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UPDATE 1-London stocks buoyed by pullback in new virus cases

Reuters | London | Updated: 12-02-2020 14:49 IST | Created: 12-02-2020 14:38 IST
UPDATE 1-London stocks buoyed by pullback in new virus cases
Representative image Image Credit: Flickr

UK shares advanced on Wednesday, helped by gains in heavyweight oil firms and on relief that the number of new cases of coronavirus infections out of China was falling.

China reported its lowest number of new cases since late January, leading some to suggest the outbreak may plateau soon. That helped the FTSE 100 climb 0.4% by 0841 GMT. Oil majors Shell and BP were the biggest boosts to the blue-chip index, as they tracked a surge in crude prices.

The FTSE 250 added 0.6%, led by home furnishings retailer Dunelm which jumped 5.4% to a record high after upbeat profit forecast. Online trading platform Plus500 also supported the mid-cap index with a 4.6% rise as its second-half core earnings nearly doubled from the first.

Fears over the coronavirus epidemic eased as new cases dropped and China's senior medical adviser said on Tuesday that it may be over by April. However, some experts called for caution as the death toll in China crossed 1,100. "While there continues to be high uncertainty about the rate of spread and timing of the peak of the coronavirus, modeling by epidemiological experts indicates a likely range for the peak between late February and June," analysts at S&P Global said.

Dealers also took note of comments overnight from U.S. Federal Reserve Chair Jerome Powell, who remained fairly upbeat about the U.S. economy, but warned that the virus-led disruptions in China could spill over globally. "One can, in fact, make a bullish case for equities based on any scenario regarding COVID-19," OANDA analyst Jeffrey Halley said.

"An escalation in its spread causes a pronounced global slowdown, which prompts central banks to cut interest rates aggressively. Buy equities for the V-shaped recovery." Among stocks, bullish brokerage actions lifted shares in Irish food company Greencore 4% and asset and corporate services firm Sanne Group by 4.5% on the FTSE 250.

Arbuthnot Banking soared 11% and was set for its best day since July 2015, after guiding to annual profit at the upper end of market expectations.

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

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