London Markets: U.K. stocks gyrate as market struggles to price in virus outlook

AFP/Getty Images
A sign for Just Eat, a food delivery service can be seen above a restaurant in London

It was another volatile day for U.K. stocks on Tuesday, as equities gyrated on how to correctly price in the impact on the economy from the raging coronavirus.

The FTSE 100 UKX, -1.22% traded as high as 5,308.95 before slumping 1.1% to 5,094.374.

“In the absence of any game-changing policy interventions, market sentiment looks set to remain hostage to perceptions of global trends in the coronavirus infection rate,” said Paul O’Connor, head of multi-asset at Janus Henderson Investors. “With so much pessimism now embedded in asset prices, we believe that gradually rebuilding market exposures into dips will be rewarded in all but the most adverse coronavirus outcomes. We approach these turbulent markets cautiously and probabilistically, but optimistically.”

The market was rewarding and punishing the typical coronavirus plays. Ocado Group OCDO, +9.16% , the supermarket-delivery firm, surged nearly 9%, and Just Eat Takeaway.com JET, +5.81% , which delivers for restaurants and also received an upgrade to buy from hold from Jefferies, rose 6%. Household products maker Reckitt Benckiser RB, +4.98% was another advancer.

TUI TUI, -13.24% , the travel operator that has halted most of its operations, slumped 14%, and sporting-goods retailer JD Sports Fashion JD, -15.89% also fell sharply.

Catering firm Compass Group CPG, -10.39% fell 11% after saying its half-year operating profit will be £125 million to £225 million lower than expected due to the virus impacting its business.

Copper miner Antofagasta ANTO, +5.41% surged 8% however after saying its operations have not been impacted by the virus. It did cut its final dividend however.

“This still represents a generous total payout ratio of 67% (2018: 65%), and remains significantly above ANTO’s policy of paying out a minimum of 35%,” said Yuen Low, an analyst at Shore Capital.

Tritax Big Box REIT BBOX, -7.61% slumped 10%. It said “early positivity in the occupational and investment markets may well be tempered by coronavirus” after increasing its dividend target by 2.2%, to 7.00 pence per share