Market News & Analysis
FTSE drops on Centrica, Barclays and Chinese numbers
Fiona Cincotta February 13, 2020 10:02 AM
The FTSE is struggling this morning, weighed down by losses at Centrica, Barclays’ missed profit and a new way of diagnosing the coronavirus.
Britain’s largest energy supplier Centrica blamed the cap on household energy bills for a loss of more than £1bn in the last financial year and the decline in commodity prices prompted the firm to write down the value of its oil and gas assets. Shares tumbled around 17% in early trade but still managed to hold above the 12-month low of 64p, a testament to a tumultuous year of trading for the stock.
Barclays bank is facing a whole different set of problems now that its chief executive is being investigated by UK financial authorities over his links to the convicted financier Jeffrey Epstein.
Coronavirus spike in context
Latest reports from China indicate that the number of coronavirus-related deaths has risen to the highest level so far but these should be taken in context. China has changed the way it diagnoses infected patients and has broadened the parameters to include a wider range of symptoms. There has been no retroactive analysis yet that would show if there has actually been an increase in cases measuring like for like, but in the past epidemiologists have said that the peak of the spread is likely to happen at the end of February or in early March.
Oil firms and miners reacted the worst to the China numbers, among them the heavily traded Glencore, Shell and BP. The latter two were also affected by a report from the International Energy Agency saying that the outbreak of the coronavirus could reduce the demand for oil by as much as 30% this year, with the worst decline expected in the current quarter. Brent crude prices dropped around 1% on the news while WTI lost 0.6%.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.