Virus and Davos set the tone for the day
Fiona Cincotta January 21, 2020 10:21 AM
The FTSE plunged more than 1% after opening as China was hit with a SARS-like virus just days before the start of the Chinese New Year
The FTSE plunged more than 1% after opening as China was hit with a SARS-like virus just days before the start of the Chinese New Year. Chinese and Hong Kong shares dropped 1.7% and 2.8%, respectively, on fears that the virus will spread quickly over the coming days when vast numbers of Chinese will travel for annual festivities. In London luxury brands and travel stocks came under most pressure, closely followed by mining shares as China is the world’s biggest buyer of metals.
One ray of light came from budget airline easyJet which bounced up 4.8% after it upped its guidance on first half revenue. The company reported passenger revenue numbers exceeding expectations.
The start of the World Economic Forum in Davos today could throw up some interesting headlines as President Trump is due to address the forum in the course of the morning. Climate change will no doubt be one of the top issues on the agenda as environmental campaigners are lining up protests throughout this week.
Unemployment data lifts sterling
The pound ticked back up above the $1.3 mark, helped by a slight improvement in UK employment in the three months to November. The numbers today together with the latest improvement in the housing market mean that although the Bank of England started shifting towards cutting rates at the end of this month it may end up holding back on this decision until later this year.
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.