The FTSE 100 and other major stock markets continued their downward spiral yesterday, fuelling fears of a global recession.
London’s blue-chip index fell by a further another 215.79 points, or 3.18% to 6,580.61 in its worst week since the financial crisis of 2008 as the coronavirus outbreak continued to spook investors.
Germany’s Dax Index fell 3.9% and France’s Cac 40 was down by 3.4%. Wall Street opened sharply lower, with the Dow Jones Industrial Average and S&P 500 both down by 1.8% and the Nasdaq falling 1.7%.
Investors came into 2020 feeling confident the US Federal Reserve would keep interest rates at low levels and the US-China trade war posed less of a threat to company profits after the two sides signed a truce in January.
The sharp drop for markets this week partly reflects growing fears among many economists that the US and global economies could take a bigger hit from Covid-19 than previously thought, weakening consumer confidence and depressing spending.
Whisky-maker Diageo and British Airways parent International Airlines Group are among major companies already counting the cost of the virus to sales, while easyJet was yesterday forced to cancel some of its Italian flights.
Few companies were spared the latest pummeling on the London Stock Exchange, with travel giant Tui taking the biggest hit as its shares fell 55.8p, or 8.51%, to £6.
Oil and gas major BP was down 18p, or 4.35% to 396.15p, while Shell’s “A” and “B” shares were lower by 70.2p, or 4.05%, at 1,661.4p and 68.8p, or 3.97%, at 1,663.6p respectively as cornovirus concerns pushed oil prices lower.
Another North Sea operator, Premier Oil, was among the bigger fallers on the FTSE 250 Index, with its shares plunging 7.14p, or 8.42%, to 77.64p.
Earlier this week, Nigel Green, founder and chief executive of financial services company deVere Group, warned the coronavirus, as well as heightening geopolitical and trade tensions were increasing the chances of a global recession. “Investors must take action sooner rather than later to build and safeguard their wealth,” he added.
