By Barbara Kollmeyer, MarketWatch
AFP via Getty Images
London stocks tracked global gains on Wednesday, with investors shaking off growing concerns about a fresh outbreak of coronavirus in Beijing, and gains by utilities leading the upside.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +1.19% rose 0.6% to 6,278.06, while the pound was flat at $1.2564. On Tuesday, the U.K. benchmark climbed nearly 3%, for the biggest one-day percentage gain since May 18.
Investors were able to look past updates on the coronavirus, with Beijing halting 60% of flights and closing schools as the Chinese capital’s infected tally rose past 100, days after an outbreak that is believed to have started in a food market.
“Any evidence that China can’t get the situation under control would be very negative for markets,” said Russ Mould, investment director at AJ Bell, in a note to clients. “For now, investors seem to be happy to keep buying equities,” he added.
London gains were led by the utilities sector, with SSE /zigman2/quotes/204546319/delayed UK:SSE +0.90% surging more than 8%, after the U.K. energy group said pretax profit fell sharply, but adjusted operating profit rose 37%. The group also declared a final dividend of 56 pence per share. Fellow utility National Grid /zigman2/quotes/208805676/delayed UK:NG +0.29% rose 1.8%.
Shares of Berkeley Group Holdings /zigman2/quotes/202576163/delayed UK:BKG +2.08% jumped 4%, after posting better-than-expected trading throughout the lockdown. The U.K. property developer is also back operating at 80%, which offers “encouraging signs in regard to a reopening,” said Shane Carberry, analyst at Goodbody, in a note to clients.
Away from the main index, shares of Domino’s Pizza Group /zigman2/quotes/203506006/delayed UK:DOM +1.17% fell 6% after the fast-food company said it had incurred extra costs during the lockdown to ensure safe deliveries and other measures to protect employees and clients from the coronavirus. It warned of lower earnings before interest, taxes, depreciation, and amortization year-over-year for the first half, due to these costs.
“Pizzas can be bought for a fraction of the price in supermarkets and so any pressure on people’s wallets could see them turn their back on Domino’s if times become hard financially,” said Mould.
Shares of betting group William Hill fell over 4%, after raising £224 million ($280 million) in a discounted stock sale amid the impacts of coronavirus. The gambling company said it needed the cash to boost its balance sheet and capitalize on the U.S. sports betting market.