FTSE focus turns back to UK ahead of results
Fiona Cincotta January 28, 2020 5:04 AM
UK-centric stocks are leading the FTSE higher Tuesday, managing to counterbalance declines among metal firms and miners and companies with significant exposure to China.
UK-centric stocks are leading the FTSE higher Tuesday, managing to counterbalance declines among metal firms and miners and companies with significant exposure to China, where the outbreak of the coronavirus is intensifying. Shanghai has already extended its New Year holidays until 9 February and Mongolia has closed its vast border with the country.
In London investors are taking up positions ahead of Thursday which will be heavy with company earnings including Diageo, Royal Dutch Shell, Unilever and BT Group.
Spirits firm Diageo is expected to report fairly strong results Thursday but likely to show some erosion from US tariffs on single malt introduced in October. It will be interesting to see if the company addresses the coronavirus in its outlook for the next six months given that 20% of its sales are into Asia where its blended whiskies like Jonnie Walker are particularly popular.
US reporting season won’t be able to avoid addressing virus
The two best-performing technology stocks of last year Apple and Advanced Micro Devices are both due to report results later Tuesday and while the numbers are likely to be at record high levels the spectre of the coronavirus will also have to be addressed. Apple operates two facilities in the city of Wuhan, the epicentre of the outbreak and currently in lock down while another 69 of its facilities are located in Suzhou which has for the moment not been cut off, but has prolonged its New Year holiday for another week. AMD is not as directly affected as Apple but like any technology company will not be able to avoid China exposure.
Brent crude is also being whipsawed by the coronavirus, rising overnight only to crash back below $58 in early trading. It is trading up 0.89% this morning.
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