Growth worries on coronavirus send stocks lower
Markets report: Fear of virus curbing global growth offsets positive US labour data
Burberry fell as much as 4.7% after it said the coronavirus outbreak was hurting luxury demand in key markets in the Chinese mainland and Hong Kong. Photograph: Simon Dawson/Bloomberg
Global equity markets and government debt yields slumped on Friday as growing concerns about the impact of the coronavirus on global growth overshadowed a strong US jobs report that indicated an economy on pace to grow moderately.
Stocks on Wall Street slid from record highs and the safe-haven Japanese yen rose as investors weighed how much the virus is likely to disrupt supply chains, as China accounts for one-third of global growth. The better-than-expected US labour report failed to move the market, with the fast-moving virus, which has affected 31,211 people and left 637 dead, dictating investor sentiment.
Non-farm payrolls increased by 225,000 jobs in January, with employment at construction sites increasing by the most in a year amid milder-than-normal temperatures, the US Labor Department said.
Dublin’s Iseq index of shares dipped marginally to 7,151 in line with other European bourses. Shares in packaging giant Smurfit Kappa closed 3.5 per cent up at €34.68, capping off a strong week for the group, which reported higher profits and revenues for 2019 on Wednesday.
Shares in FBD fell back after a strong session previously on the back of a statement that profit for last year was expected to be “at least €100 million”, significantly ahead of what the market expected. By the close of trading, the insurer’s shares were down 1.6 per cent at €9.18.
Insulation specialist Kingspan slipped 0.5 per cent to €57.85 after the UK’s Competition and Markets Authority announced this week it would investigate the Irish group’s planned €37 million purchase of British company Building Solutions. Ryanair, meanwhile, was 1.7 per cent down at €15.70 while the State’s two main banks Bank of Ireland and AIB fell 0.65 per cent and 0.8 per cent respectively on a weak day for financials across Europe.
British stocks fell on Friday after four straight sessions of gains, as dealers locked in profits amid nagging worries over the coronavirus, and investment platform Hargreaves Lansdown slid following a discounted share sale by its largest investor.
The FTSE 100 declined 0.5 per cent, with losses inflicted by heavyweight oil stocks and miners as well as Hargreaves Lansdown, which fell 6.1 per cent to a near two-year low. Still, the index enjoyed its best week in seven, while the midcaps recorded their biggest gain in six weeks.
Burberry fell as much as 4.7 per cent after it said the coronavirus outbreak was hurting luxury demand in key markets in the Chinese mainland and Hong Kong. UAE-based NMC Health, whose shares have more than halved in value since the company came under criticism from short-seller Muddy Waters late last year, slumped another 22 per cent to its lowest level since April 2015.
European markets lost steam on a cautious trading day, having seen the Dax leap towards a record high on Thursday. The German Dax decreased by 0.45 per cent while the French Cac moved 0.14 per cent lower.
Shares in Credit Suisse fell 5 per cent in early trade following the resignation of chief executive Tidjane Thiam, who quit as a result of a spying scandal that has hit the reputation of one of Europe’s largest banks. His departure ends a conflict with chairman Urs Rohner after revelations that the bank had snooped on former executives raised questions over its culture. By the close of trade, shares in the Swiss bank had recovered and were marginally ahead on the session.
Shares in Nokia rose 4 per cent and Ericsson shares were up nearly 5 per cent after an unusual suggestion from US attorney general William Barr that the United States consider taking control of two major foreign rivals of China-based Huawei Technologies, namely Nokia and Ericsson.
Wall Street pulled back from record levels on Friday, as investors assessed the US employment report that showed jobs growth accelerated in January but included a downward revision to some previous numbers.
Technology stocks, which outperformed broader markets this week, slipped 0.7 per cent, weighing the most on the S&P 500. A strong four-day rally this week has put the benchmark index on pace for its best week in eight months as investors took comfort from China’s efforts to limit the economic damage from the coronavirus outbreak. Take-Two Interactive Software slumped 10.6 per cent after the videogame publisher missed estimates for quarterly adjusted revenue.
AbbVie gained 4.3 per cent after the drugmaker forecast 2020 earnings above analysts’ expectations. Uber Technologies shares gained about 5.7 per cent after the ride-hailing company moved forward by a year its target to achieve a measure of profitability to the fourth quarter of 2020. – Additional reporting by Reuters