Stocks show some resilience in face of coronavirus

Dublin market mirrors European peers by finishing flat

Coronavirus seemed to be everywhere on the main markets again on Wednesday, but stocks managed to distract themselves as the day progressed, with European shares ending flat and US stocks on the rise.

Dublin

The Iseq mirrored its European peers, finishing more or less flat. The banks had a better day, especially Permanent TSB, which rose 2.4 per cent to 89 cent despite posting a drop in underlying profits. AIB and Bank of Ireland were broadly unchanged.

Tourism and transport stocks were weaker, with Dalata shedding 1.55 per cent to finish at €4.75 after gaining in the previous session, and Ryanair dropping 1.75 per cent to €12.635.

Origin was a poor performer, losing 8.09 per cent to close at €2.955 after issuing a weather-related profit warning. Hibernia Reit also fell, dropping 1.82 per cent to €1.294.

Glanbia outperformed after issuing results, again despite reporting a decline in underlying earnings. Shares closed 4.48 per cent stronger at €10.95.

London

London’s mid-cap index slid to its lowest in more than three months on Wednesday amid worries that Britain’s upcoming budget may disappoint investors, while the FTSE 100 snapped a four-day losing run after a rally on Wall Street.

The FTSE 250 shed 0.5 per cent. The export-laden FTSE 100 , which fell to a one-year low earlier, ended 0.4 per cent higher as investors in the US bought into stocks after a recent sell-off triggered by concerns over the coronavirus.

Companies more exposed to the British economy underperformed and sterling climbed lower, mainly due to concerns that new chancellor Rishi Sunak’s budget in March may not deliver the level of fiscal spending expected by markets.

Meanwhile among blue-chips, miner Rio Tinto and Diageo became the latest multinational firms hit by the coronavirus outbreak, with the latter shedding nearly 1 per cent.

Another casualty of the coronavirus was travel-food firm SSP, which skidded 5 per cent to a more than two-year low after it warned of a 50 per cent fall in February sales across the Asia Pacific region. Peer WH Smith gave up 3.6 per cent.

Europe

European shares ended flat on Wednesday, recouping all of the day's losses as strong utility and automobile earnings helped somewhat distract markets from the coronavirus outbreak. Spanish electricity provider Iberdrola led gains in utilities after posting robust annual profit growth, while French carmaker Peugeot topped the auto sector after a strong 2019.

The main European equity benchmark Stoxx 600 closed largely unchanged after dropping as much as 2.9 per cent to a four-month low earlier in the session.

Analysts suggested that investors were exercising some restraint after an extended sell-off over the prior sessions.

Utilities and automobiles were the best performing sectors for the day. Gains in Peugeot spilled over to Italy's Fiat Chrysler, which is set to merge with the French carmaker.

On the other hand, travel stocks were the worst hit sector.

Wall Street

US stocks rose on Wednesday after a rocky start to the week that shaved off more than 6 per cent from each of the main indexes on growth fears as the coronavirus spread in several countries. However, the indexes had briefly hit session lows in early afternoon trading and the Dow Jones Industrials turned negative after several health officials expressed concerns about the outbreak.

Gains in shares of marquee companies such as Apple, Microsoft and Netflix boosted the benchmark S&P 500.

Ten of the 11 major S&P sectors were trading higher, with technology leading the charge with a 1.1 per cent gain. The energy sector dropped 1.3 per cent.

Among stocks, TJX Cos jumped 7.1 per cent as the offprice retailer beat quarterly same-store sales estimates.

Walt Disney slipped 2.9 per cent on news that Robert Iger will step down as chief executive officer, handing the reins to Disney Parks head Bob Chapek.

Beyond Meat rose 3.4 per cent as Starbucks said its Canadian stores would start selling its plant-based breakfast sandwich next week. – Additional reporting: Reuters, Bloomberg