In the markets: winners and losers of COVID-19 so far

We take a deeper look into the effect COVID-19 has had on global indices and pick our winners and losers

Article updated: 1 May 2020 12:00pm Author: Tom Rosser


When external shocks hit markets, there are inevitably winners and losers. Shocks refer to changes in economic conditions brought about by a random, unpredictable event. They can have widespread and lasting effects on the economy, and are often the root cause of recessions and economic cycles.

The current COVID-19 pandemic is having an unprecedented impact on societies around the world. It has brought about a multi-faceted shock to our economies and communities, impacting both supply and demand channels. The Organisation for Economic Co-operation and Development (OECD) are estimating a 20-25% hit to the level of GDP in many major advanced economies – even worse than the impact of the Global Financial Crisis.

Whilst the effects of coronavirus are still very much ongoing, and the full extent of the damage done to markets and economies will not be known for some time yet, it is useful to take a step back and take stock of what we do know.

Global markets perspective:

The coronavirus pandemic brought capitalism to its knees as the disease spread. We’ve seen more than eight years of gains on the FTSE 100 erased in a month, the fastest bear market plummet in history on Wall Street, and global stocks having their best and worst sessions in a decade on consecutive days. As the graph below shows, there is no real winner year-to-date, but there are losers who have suffered less than others.


Best 3 indices:

  • CSI 300 (China): Appears to have weathered the COVID-19 storm fairly well. I believe this is partly attributable to China being hit first, almost like a first-in first-out scenario, and the drastic action the government took to combat the virus. The nation’s central bank has also stepped in, putting measures in place to encourage lending to small and medium-sized companies affected by the virus
  • S&P 500 (US): Fell some 34% in 30 days from its February peak, but has recovered roughly half the losses in just a few weeks. Much of the recent gains have been led by mega-cap growth names such as Amazon and Netflix, or other companies who have been able to capitalise on the lockdown - the strong presence of tech has certainly helped. Additionally, the drastic actions taken by the FED (US central bank) have undoubtedly supported markets, and may continue to do so.
  • Hang Seng (Hong Kong): Was one of the first places to report infections outside of mainland China. The community quickly locked down, learning its lessons from the Sars outbreak in 2003. Many of those infected have been incoming travellers rushing home before mandatory quarantine for arrivals was introduced. With only 4 deaths to its name, it can largely be held up as a global success story, and hence it’s easy to see why the market hasn’t tanked severely.

Worst 3 indices:

  • CAC 40 (France): Lacks the diversity in industry sectors that other indices have, due to the low number of constituents. It has likely been dragged lower due to the high weightings of major consumer facing brands such as LVMH, L’Oreal, Hermes and Kering in the index. Furthermore, France is said to have enacted lockdown quite late and lacked the logistical capacity to promote mass testing effectively.
  • FTSE MIB (Italy): Was one of the worst hit markets after being one of the worst affected nations by the pandemic. Italians have a long life expectancy, and in 2018 almost a quarter of its population was 65 or over. With COVID-19 posing a more serious threat to the elderly, Italy having a dense population and Northern Italy being a business hub with close trade and education connections to China, the adverse effects on the market are entirely understandable.
  • Ibovespa (Brazil): Is the world’s worst performing major equity index, measured in GBP terms. Its extraordinary decline has been the result of heavy selling and a remarkable fall in the Brazilian real’s exchange rate, which has fallen over 23% to the pound YTD. In addition to this, the collapse in oil prices has weighed heavily on oil giant Petroba’s shares, which is one of the main constituents within the index.

Recovery for these indices looks fairly bleak. Brazil has been fraught with political and economic issues for some time, and many are predicting the economy to shrink the most in over 50 years. Italy has political and economic fragilities too, and the economy looks to be heading for its fourth recession in just over a decade. The impact in France will be less severe, but recession is likely nonetheless. Ultimately, this spells danger for markets assuming markets and economics move in tandem; however this is often not the case.

UK market perspective:

To get a sense of the overall UK market it’s best to look at the FTSE All Share, comprising of large, medium and small-sized companies. The index has certainly suffered and at the time of writing is 23.7% lower YTD. Despite it having around 600 constituents, the oil giants BP and Shell are still heavyweights within the index and have likely dragged it lower.

Prior to coronavirus, domestic politics and Brexit had dominated the narrative around the economy and in particular UK assets for some time. Just as the country looked to have found a firmer footing, the pandemic hit. Sterling also slumped to multi-decade lows against the US dollar, following a synchronized rush for dollars and its safe haven properties.

Best 3 stocks:

  • Petropavlovsk PLC: Is a FTSE 250 listed gold miner whose shares have risen around 90% year to date, likely buoyed by strong demand and price movements for gold. Its new floatation plant, which is expected to double the company’s capacity, is still on track for the fourth quarter despite lockdown measure.
  • Daejan Holdings: Is the British-based property business whose share price jumped 55% in just one day after the billionaire family that controls it offered to take it private. The share price movements are quite rare in their lack of correlation to COVID-19.
  • BATM Advanced Communications: Suffered a sharp decline in mid-march but have since rebounded strongly and are up over 44% YTD. The networking tech and medical lab specialist’s shares have done well due to the company’s involvement with combatting COVID-19 by developing diagnostics kits to detect the virus.

Other notable mentions include CMC Markets Plc, Plus500 Ltd and Ocado who have all benefitted from more people staying at home during the lockdown.

Worst 3 stocks:

  • Finablr Plc: Is the global payments group whose shares have been suspended after it asked advisers to prepare for a possible insolvency following the unveiling of a fraud scandal. Another blow has also been dealt, with Travelex putting itself up for sale for a number of reasons - the impact of coronavirus being one of them.
  • N Brown Group plc: Despite some strong returns being delivered in recent weeks, the online clothing and homeware retailer is still down over 87% YTD. The company has fallen into a loss making position in recent times, and COVID-19 has further compounded their issues at a time when major business changes are happening.
  • Intu Properties plc: Is the UK’s largest owner, developer and manager of shopping centres in the UK. Its shares have been in structural decline for many years now, not helped by the ongoing shift to e-commerce. The lockdown measures put in place have added another nail to the coffin with no footfall and fears of unpaid rent.

Other notable mentions include Hammerson and Cineworld, heavily affected by the lockdown, and Carnival who have been forced to cancel cruises and issue refunds.

Bricks and mortar retailers will find it hard to recover, particularly as footfall and sales have been declining for some time. Consumer habits may be different coming out of this crisis meaning normal activity is not resumed straight away, impacting on the restaurant, entertainment and travel industries. Businesses who have a strong online presence or are becoming more digitialised will likely recover quicker; N Brown Group may be set to benefit from their planned transformational changes.

All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Tom Rosser

Investment Research Analyst

Tom holds a BSc Economics degree and an MSc Investment Management degree, and has passed both CFA Level l and CFA Level ll. He joined The Share Centre in September 2018 on the graduate scheme and is now an Investment Research Analyst on the fund research team. As well as being a fund commentator, Tom also comments across equities and other asset classes.

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