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Jan. 27, 2020, 8:03 a.m. EST

London stocks tumble as mining and oil companies hit by coronavirus worries

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By Barbara Kollmeyer, MarketWatch


Reuters
HSBC’s headquarters in the financial district of Hong Kong

The FTSE 100 faced its biggest one-day percentage loss in months on Monday, as the index made up heavily of international companies was hit hard by news that China’s deadly coronavirus is spreading rapidly.

The index /zigman2/quotes/210598409/delayed UK:UKX +1.21%  slid 2.2% to 7,417.56, with the pound flat at $1.3082, which would mark the biggest loss since early October 2019. It climbed 1% on Friday, and added 1.1% last week. But the index closed before the finish of Wall Street’s trading day on Friday, when investors sold equities on coronavirus headlines.

“The heavy weighting of the index toward the resources sector has exacerbated the situation, given how these companies’ fortunes are closely tied to the commodity-hungry Chinese economy,” Russ Mould, investment director at stockbroker AJ Bell, told clients in a note.

U.S. stock futures fell sharply on Monday amid concerns over the rapidly spreading coronavirus, which usually causes respiratory illness. China extended this week’s Lunar New Year holiday, among other measures aimed at halting the spread of the coronavirus, as the death count rose to at least 80, and the number of those infected neared 3,000. The U.S., France and Japan are among countries that have reported confirmed cases.

Read: Coronavirus and Mideast tensions aren’t the stock market’s biggest problems this week, strategist warns

A worrying detail emerged as Wuhan’s mayor Zhou Xianwang said that five million people left the city before the travel ban was imposed. The virus is believed to have started in the Chinese city.

“The difficulty for investors is that it is extremely difficult to predict what turn events might take in the coming days and weeks. Until there are signs the virus has been contained equities look set to be dogged by uncertainty,” said Mould. “Previous experience of global health crises does at least suggest there could be a fairly rapid recovery once the number of cases has peaked.”

Mining stocks led the losses, followed closely by banks and major oil companies, though virtually every sector was in the red. China is a big purchaser of natural resources, and Anglo American /zigman2/quotes/201381512/delayed UK:AAL +2.50% , Rio Tinto /zigman2/quotes/202627887/composite RIO +0.32%   /zigman2/quotes/208934945/delayed UK:RIO +0.69%  and BHP Group /zigman2/quotes/203323256/delayed UK:BHP +1.15%  all fell by over 4%.

Shares in BP /zigman2/quotes/207305210/composite BP -2.80%   /zigman2/quotes/202286639/delayed UK:BP -1.72%  lost 2% as crude prices slid on concerns about how the virus might impact China’s economy and weaken its demand for that commodity as well.

Heavily-weighted HSBC Holdings /zigman2/quotes/203901799/delayed UK:HSBA -3.09%   /zigman2/quotes/208272822/composite HSBC -2.40% tumbled 3.3%.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,218.79
+74.54 +1.21%
Volume: 1.17M
May 28, 2020 4:59p
loading...
/zigman2/quotes/201381512/delayed
UK : U.K.: London
1,712.00 p
+41.80 +2.50%
Volume: 4.78M
May 28, 2020 4:35p
P/E Ratio
7.91
Dividend Yield
5.21%
Market Cap
£20.61 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202627887/composite
US : U.S.: NYSE
$ 52.51
+0.17 +0.32%
Volume: 2.26M
May 28, 2020 4:00p
P/E Ratio
10.72
Dividend Yield
7.27%
Market Cap
$65.21 billion
Rev. per Employee
$852,406
loading...
/zigman2/quotes/208934945/delayed
UK : U.K.: London
4,288.50 p
+29.50 +0.69%
Volume: 2.52M
May 28, 2020 4:35p
P/E Ratio
11.22
Dividend Yield
8.18%
Market Cap
£68.83 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203323256/delayed
UK : U.K.: London
1,589.80 p
+18.00 +1.15%
Volume: 4.67M
May 28, 2020 4:35p
P/E Ratio
10.92
Dividend Yield
7.09%
Market Cap
£79.48 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/207305210/composite
US : U.S.: NYSE
$ 23.26
-0.67 -2.80%
Volume: 8.68M
May 28, 2020 4:00p
P/E Ratio
19.45
Dividend Yield
10.75%
Market Cap
$80.16 billion
Rev. per Employee
$4.03M
loading...
/zigman2/quotes/202286639/delayed
UK : U.K.: London
313.95 p
-5.50 -1.72%
Volume: 59.24M
May 28, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
10.91%
Market Cap
£64.20 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203901799/delayed
UK : U.K.: London
384.35 p
-12.25 -3.09%
Volume: 46.04M
May 28, 2020 4:35p
P/E Ratio
25.80
Dividend Yield
0.00%
Market Cap
£80.77 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/208272822/composite
US : U.S.: NYSE
$ 23.59
-0.58 -2.40%
Volume: 6.67M
May 28, 2020 4:00p
P/E Ratio
26.40
Dividend Yield
8.44%
Market Cap
$98.45 billion
Rev. per Employee
$366,224
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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