(Reuters) - Britain’s stock markets fell for the eighth day in 10 on Wednesday, as more companies warned of a severe hit to earnings from the coronavirus outbreak even as policymakers pushed for fresh stimulus measures to support global growth.
U.S. investment bank JPMorgan said it would take several years for the industry to recover in a widely-circulated note that cut its price target on Rolls-Royce by 29%, citing falling expectations for cash flow.
IT company Micro Focus International MCRO.L slumped 22.6% as it scrapped its final dividend as part of its plan to prepare for the fallout from the crisis.
Car retailer Pendragon PDG.L dropped 12% as it warned the virus spread in Britain could reduce footfall and worsen results that already show it losing money.
The FTSE 100 is down by around a third from its peaks since the outbreak began to hit home. The index had recovered some ground on Tuesday as the Trump administration pushed for a $1 trillion stimulus package and the UK unveiled a 330 billion-pound lifeline of loan guarantees and other measures.
“It’s hard to take anything in (your) stride when it feels like we’re stumbling about trying to figure out what’s going on,” said Brian Jacobsen, senior investment strategist at Wells Fargo Asset Management Multi-Asset Solutions.
“We’ve seen quite wild swings in the market, and that’s because of the massive amount of uncertainty as to whether the stimulus will get done and how long will the recovery take.”
More businesses warned of pain, with Prime Minister Boris Johnson’s announcement of a virtual shutdown of the country hammering pubs, restaurant and retail companies.
The FTSE index of mid-cap companies .FTMC, meanwhile, was down about 7%.
Graphic: UK midcaps in capitulation mode
Rather than growing 5% as previously forecast, the latest Refinitiv data suggests companies listed on the pan-European STOXX 600 .STOXX will post a 4.1% decline in earnings between January and March.
Wagamama owner Restaurant Brands RTN.L and another pub operator, Mitchells and Butler MAB.L also outlined severe falls in sales and efforts to shore up their financial situation for later in the year.
British fashion brand Superdry SDRY.L tumbled 30% after warning it would miss its 2020 targets, but also said it had a strong capital position and was in talks with lenders about additional flexibility and liquidity.
Reporting by Sruthi Shankar in Bengaluru; editing by Patrick Graham
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