UK stocks tank as PM Johnson tests positive for Coronavirus

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Mar 28, 2020
Updated: Apr 15, 2020
  • FTSE 100 loses 5.3% as UK's Prime Minister, Boris Johnson, tests positive for Coronavirus.
  • The United Kingdom's midcap FTSE 250 index drops 4% on Friday.
  • Wall Street follows the same downward trend despite Trump's signature on £1.61 billion bill.

Infecting around 14,500 people in the UK and causing over 740 death, the Coronavirus shocked the UK’s government on Friday as Prime Minister Boris Johnson tested positive for the flu-like virus. The news stirred further fear in the UK’s benchmark share index that was recorded trading significantly lower later in the day.

UK’s blue-chip FTSE 100 index recovered for three days in a row on the optimism of aggressive measures taken by the central bank and the government to cushion the economic blow of Coronavirus. On Friday’s news that shook the British media, however, the index dropped 5.3% within a matter of hours.

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PM Johnson announced his self-isolation in London on Friday but reiterated that he will continue to lead the country’s response to the sharply rising pandemic.

British Government To Offer Taxable Grants To Self-Employed People

Individual businesses that contributed further to Friday’s decline included the fashion chain Next (NASDAQ:NEXT) that tanked 11% in the stock market as it closed its last remaining online business. Carnival Corp (NYSE:CCL) came in focus with a massive 21% decline on fears that the unprecedented £1.61 billion U.S stimulus will not offer aid to cruise liners that are registered anywhere other than the United States.  

In its statement on Thursday, the British government also announced its plans of launching a taxable grant to support the self-employed people amidst the Coronavirus crisis.

The government’s recent order of lockdown has weighed heavily on the homebuilders stock like Taylor Wimpey (LON:TW) that dropped 9% and Persimmon (LON:PSN) that declined 11% in the stock market. UK’s largest homebuilder, Redrow (LON:RDW), was also reported trading 8.6% down following its announcement that it is seeking additional funding as it negotiates with 6 banks to survive through the pandemic. The housebuilder also said that it has applied for financial support via the BoE’s (Bank of England) scheme.

UK’s Midcap FTSE 250 Index Drops 4% On Friday

The UK’s midcap FTSE 250 index, on the other hand, saw a narrower decline of 4% with contributions from Provident Financial (LON:PFG) that tanked 13% as it withdrew its financial guidance for 2020 and suspended face-to-face visits to minimize the risk of virus transmission. Royal Mail (LON:RMG) also lost 18% as it postponed its turnaround plans due to the ongoing health crisis.

Wall Street also followed a similar downward trend on Friday posting gains temporarily after President Trump’s signature on the £1.61 billion bill but losing them shortly thereafter.

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