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London pre-open: Stocks seen lower as caution sets in ahead of weekend

By Michele Maatouk

Date: Friday 27 Mar 2020

LONDON (ShareCast) - (Sharecast News) - London stocks were set to fall at the open on Friday following gains in the previous session, amid ongoing concerns about the coronavirus pandemic.
The FTSE 100 was called to open 125 points lower at 5,690.

CMC Markets analyst Michael Hewson said it doesn't look as if the "decent" gains seen in Asia will translate into a similar positive open for European markets "as caution returns ahead of the weekend".

"A weaker open after three days of gains is not altogether surprising against such an uncertain backdrop, as cases in the US rise above those in China, while the infection rate in Italy appears to be rising again.

"Against this sort of backdrop it is still way too early to sound the all clear, and while yesterday's rebound was welcome it takes no account of the fact that the infection count and death rate is likely to continue to rise sharply in the coming weeks, and that in any subsequent recovery, consumer incomes and confidence will take some time to recover.

"Markets appear to be pricing in a V-shaped recovery, or some form of U-shaped one. Neither is likely, and it was a fear articulated by the Bank of England yesterday, who warned of the risk of lasting damage to the UK economy, as a result of widespread business failures, and a sharp rise in unemployment."

In corporate news, Next shut its online, warehousing and distribution operations overnight after staff expressed concerns about working during the coronavirus lockdown.

"Next will not be taking any more online orders after this time until further notice," the company said, adding that it had "listened very carefully" to staff.

Online real estate agent Rightmove cancelled its dividend and pulled full year guidance as due to uncertainties caused by the impact of Covid-19.

Rightmove had planned to pay a final dividend payment of 4.4p per share (?38.3m in total) for the year to December 31.