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London stocks struggled for direction on Thursday, as investors assessed fresh coronavirus risks, with Smith & Nephew PLC standing out with gains after upbeat results.
The FTSE 100 index UKX, +0.08% was flat at 7,453.79, and getting no help from a weak pound GBPUSD, -0.4025%, which fell 0.3% to $1.2874. A weak currency can be positive for stocks as many U.K. international companies earn a chunk of revenue overseas.
The bulk of U.K. stocks were posting modest losses, though Burberry Group PLC BRBY, -3.45% dropped over 5%. Investors were absorbing news of two deaths from a cruise ship quarantined in Japan and South Korea told 2.5 million people to stay home following the first death in that country. Shares of luxury goods companies are sensitive to coronavirus headlines as Hong Kong and China are important markets for them.
China’s infection rate declined sharply, though there were some questions about whether officials there have again tweaked their methodology.
Read: Danish shipping giant warns of coronavirus threat
Shares of Imperial Brands PLC IMB, -2.58% fell over 3%.
On the upside, shares of Smith & Nephew PLC SN, +8.78% jumped 7% after the FTSE 100-listed medical devices maker reported revenues of more than $5 billion for the first time in the company’s history.
Shares of Lloyds Banking Group PLC LLOY, +2.40% LYG, +2.09% rose over 1%. The U.K. bank’s 2019 profit missed expectations due to charges related to payment protection insurance, but said underlying performance was resilient.
“Given its sensitivity to interest rates, management may be praying yesterday’s unexpectedly strong inflation number gives the Bank of England pause for thought over a potential rate cut. The conversation could soon turn to interest rate hikes which would be good for the banking sector’s earnings,” said Russ Mould, investment director at AJ Bell.
