FTSE 100 climbs back after Apple’s coronavirus blow
The FTSE 100 staged a recovery from yesterday’s two-week low today as traders welcomed a smaller increase in the number of new coronavirus cases.
The number of Covid-19 cases rose to 75,000 today but China reported a second consecutive low number of new infections at 1,749. The death toll also climbed to 2,004 but the lower daily count encouraged traders after yesterday’s stock sell-off.
London’s blue-chip index rose 0.8 per cent in early trading to 7,441.8 points as European stocks also enjoyed a bounce. Germany’s Dax rose by around 0.4 per cent while France’s Cac also climbed 0.4 per cent.
European traders took their lead from Asian stock markets, where Japan’s Nikkei jumped 0.9 per cent and Hong Kong’s Hang Seng index rose just shy of 0.5 per cent.
London Capital Group’s head of research, Jasper Lawler, said: “A small decline in the number of coronavirus cases combined with a determination on behalf of the Chinese government to ward off the economic damage is seeing an uplift in market mood.
“We aren’t putting too much stock in the official China figures, which appear to paint a picture rather than reflect reality. But if Beijing ups stimulus measures then those economic effects are real.”
Today’s rise came in stark contrast to yesterday’s losses sparked by Apple’s revenue warning. The iPhone maker warned the coronavirus outbreak’s impact on its supply chain means it will miss phone sales targets in 2020.
Apple’s supply chain took a knock as investors sold out of listed companies that provide Apple with the iPhone’s constituent parts.
But the FTSE 100’s part recovery today showed markets hope the impact of the coronavirus threat is short term, analysts said.
“Apple’s warning is not being ignored but investors can live with it if the disruption is only temporary,” Lawler said.
“The sense is very much that the world’s most valuable company will ride this out,” Markets.com’s chief market analyst Neil Wilson said. “Sticky consumers will only delay purchase of Apple goods, not switch to Samsung or Android.”
The FTSE’s biggest faller was RPS packaging group after seeing 2019 profits plunge. The biggest FTSE riser was Centrica, which climbed 4.2 per cent to 76.8p.