Northern Derail

Wednesday, 29 January: The Coronavirus has made it a tough end to the month for global markets.  Today provided some respite, allowing investors to at least pause and closely monitor the latest news headlines with regards to the situation. Luckily no major fuel was added to an already dangerous fire, causing many major European bourses to barely rock from their starting positions, for example the FTSE 100 closed 0.04% higher. It is clear severe steps are being taken globally to contain the spread of the virus but even with a fairly quick cull of the virus it will be the difficult task of predicting the knock-on economic impacts, not just social ones. For China and firms with exposure there, we’re still in the early stages and flights could resume in a matter of days, or weeks, or longer in reality. So, no news wasn’t bad today but, with every new piece of information that is released we can start looking at the impacts that may outlast the virus itself. The Hang Seng re-opened today after a break for the Chinese New Year and fell quite dramatically after making up for lost time to close down 2.9%, in contrast with the Nikkei that is continuing to find equilibrium, with Japanese shares closing 0.7% higher.

With some cautious eyes being taken away from that situation in China, there was nothing also to really keep attention. Domestic investors are already on hold to some degree ahead of the Bank of England’s (BoE) rate decision tomorrow, with markets cautiously aware of a decision that could go either way. The decision is billed far higher up the roster than the Brexit decision on Friday and could see significant movements in sterling.

In company news, Wizz Air was one of the standout news stories of the day after upgrading their profit forecast due to a rise in passenger numbers over Q3 to the end of December. The number of passengers was up 23.2% on the same period last year and shares in the airline closed +4.7%.

Bringing us back down to Earth was the news that Northern Rail would return to Government control. The struggling and underperforming franchise will be taken back on March 1, from Arriva Rail North.

Automotive retailer Pendragon, has today stated that underlying profit will be at the lower end of market expectations, blaming a challenging final quarter that hurt the Franchised UK Motor division. Shares climbed 0.7% during today’s session, with perhaps traders afraid the news would’ve been worse. Finally Brewin Dolphin announced today that CEO David Nicol will retire after 8 years at the helm, and that during Q1 of FY2020 total funds rose by 7.8%. Shares in the wealth manager ticked +0.45%.

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