FTSE 100 returns to growth after volatile trading session
The FTSE 100 closed in the green following a volatile session which saw it initially surge, slip back into the red amid coronavirus fears and then return to modest growth in the afternoon.
The index opened bullishly amid hopes central banks could help equity markets but was dampened after the Organisation for Economic Cooperation and Development (OECD) warned the global economy could grow at its slowest rate since 2009 due to coronavirus.
London’s top flight closed 74.28 points higher at 6,654.89 at the end of trading on Monday.
David Madden, market analyst at CMC Markets UK, said: “At the open, stocks in Europe were given a boost by the chatter that the central banks of the US, Japan as well as Australia will loosen monetary policy in a bid to raise economic sentiment, but the bullish sentiment faded mid-session.
“For a good chunk of the day, all the major indices were in the red, but sentiment has switched back for the FTSE 100 as well as the Cac 40.”
However, the modest gains will help calm down investors after the index of leading UK firms reported its worst week since the financial crisis last week, amid fears over the spread of coronavirus.
The major European markets were mixed but showed improvements, with equities in France performing particularly strongly.
The German Dax decreased by 0.27% while the French Cac moved 1.82% higher.
Across the Atlantic, the Dow Jones opened slightly higher and continued to rise through the session as trading sentiment improved.
Meanwhile, sterling was weak after the Government said it would be prepared to walk away from negotiations if Brussels were not playing ball, concerning some traders, but it still made gains on a sliding dollar.
The value of the pound rose 0.14% versus the US dollar at 1.280 and was down 1.02% against the euro at 1.146.
In company news, Barclays shares fell after an activist investor told its board to withdraw support for its chief executive Jes Staley over his links with paedophile financier Jeffrey Epstein.
In a public letter on Monday, Edward Bramson said he “strongly recommends” chairman Nigel Higgins remove a proposal to re-elect Mr Staley to the bank’s board for an upcoming shareholder meeting. Barclays fell by 5.44p to 143.3p.
Travelex-owner Finablr plunged after it said it expects a multimillion-pound earnings hit from the New Year’s Eve cyber attack that left its systems down for weeks, and the outbreak of coronavirus. Shares in the firm dived 9.1p lower to 52p.
Shares in Senior moved higher after cost-cutting efforts helped the engineering business through recent turbulence, with a fall in pre-tax profits better than expected.
It closed 5.9p higher at 147.1p despite warning that the grounding of the Boeing 737 Max planes could continue to weigh on the company.
The price of oil moved up for the day because of speculation that Opec will bring in deeper cuts to try to put a floor under the market.
The price of a barrel of Brent crude oil increased 3.27% to 51.74 US dollars.
The biggest risers on the FTSE 100 were Hikma, up 111p to 1,899p, Rentokil, up 29.2p to 513.2p, Ocado, up 55.5p at 1,119.5p, and WM Morrison, up 8.85p at 180.1p.
The biggest fallers on the index were IAG, down 38.9p at 433.1p, Carnival, down 102p at 2,333p, Barclays, down 5.44p at 143.3p, and Whitbread, down 135p at 3,759p.
