The FTSE 100 lost its early gains today as it fell further by 3 per cent as investors soaked in the news of the Government’s increased measures to protect the UK against coronavirus.The index of Britain’s biggest companies had fallen 153 points to 4,998 at about 9.30am this morning.That came after it opened up 147 points or…
The FTSE 100 lost its early gains today as it fell further by 3 per cent as investors soaked in the news of the Government’s increased measures to protect the UK against coronavirus.
The index of Britain’s biggest companies had fallen 153 points to 4,998 at about 9.30am this morning.
That came after it opened up 147 points or 2.9 per cent to 5,298 shortly after 8am.
The early gains came amid hopes of joined-up global action to combat the coronavirus crisis, after leaders of the G7 group of countries agreed late last night to co-ordinate their response to the pandemic.
By 12.30pm, it was trading down 74 points or 1.4 per cent at 5,077.
Chancellor Rishi Sunak will later set out a new package of support for businesses hit by the outbreak less than a week after announcing £12billion of emergency funding in the Budget.
Neil Wilson, at Markets.com, said he remained ‘dubious about any rallies having legs’ as market turbulence is set to continue.
A bank worker looks at share prices today at a trading gallery in Kuala Lumpur, Malaysia
He said: ‘Until there is better knowledge of the situation on the ground, until the economic damage is known, and until we see a genuine spike in cases in the US and Europe, volatility levels will remain extremely high.’
He added that City speculation is mounting over possible action by regulators to shut markets temporarily.
‘There had been chatter that regulators would start to think it’s time to call a halt to this, that they will step in to shutter stock markets for a limited period in an attempt to regain control of the situation,’ he said.
‘Jay Clayton, the SEC boss, said otherwise, but it remains a possibility.’
The leisure and travel sector were hardest hit today, following the announcement that people should stay away from pubs and restaurants and work from home.
TODAY AND YESTERDAY: The FTSE 100 rose in early trading this morning before falling again
Several companies reacted by warning that without Government intervention they risked mass unemployment and businesses collapsing.
Leading the falls were companies including Great Western Railway operator FirstGroup, down 26 per cent, coach business National Express, off 22 per cent, and Thameslink operator Go-Ahead, down 16 per cent.
The businesses saw a massive drop in customers as commuters switch to working from home and the public are urged to avoid social contact.
Retailer SSP, which specialises in running travel hub stores, saw shares plunge 22 per cent.
Several pub and entertainment groups also took a severe hit as companies warned they had been left in a legal limbo with insurers because the Government had not officially shut their sectors.
PAST WEEK: The FTSE has collapsed over the past week as investors panic over coronavirus
Brewer and pub owner Marston’s shares were down 33 per cent by midday, Cineworld fell by 27 per cent and Mitchell & Butlers’ shares were off by 14 per cent.
But there was some balance, with internationally-focused businesses enjoying a boost from the various funding measures announced by other governments.
Retailers also saw shares rise as self-isolation led to more households stocking up. Ocado shares were up 8.2 per cent, following a boost in Sainsbury’s shares yesterday.
In the US, talks about potentially pausing stock markets has been floated, and, although officials have ruled it out for now, some still feel a change could come.
PAST THREE WEEKS: Coronavirus has seen market valuations plunge, including in London
Meanwhile Asian markets fluctuated today after Wall Street suffered its worst day in more than three decades with coronavirus panic sweeping the planet.
In early European trading, the CAC 40 in Paris rose 3.4 per cent to 4,013 after the government announced $50billion in aid for individuals and businesses. Germany’s DAX gained 3 per cent to 9,005.
Boris Johnson has unveiled unprecedented peacetime measures to try to control the spread of coronavirus, as the death toll of people with the infection in Britain hit 55.
In a press conference yesterday, the Prime Minister called on people to stay away from pubs, clubs and theatres and to avoid all non-essential contacts and travel.
Traders work on the floor of the New York Stock Exchange on Wall Street yesterday
It came after scientists warned 250,000 people will die in Britain as a result of the outbreak unless more draconian measures are adopted to protect the population.
While governments and central banks attempt to soothe markets with massive stimulus pledges and interest rate cuts, more countries are going into lockdown to prevent the outbreak’s spread – bringing the world economy juddering to a halt.
There is a broad consensus that the disease, which has wiped trillions off market valuations, will cause a global recession.
The airline industry is among the first in the firing line, leading company heads to plead for billions of dollars in state help to prevent them going under.
National Australia Bank’s Rodrigo Catril said today: ‘Drastic measures by the Federal Reserve and other central banks have failed to appease markets.’
He added that investors are ‘still running towards the exit door of risk assets as governments step up their radical measures to contain the COVID-19 outbreak’.
The Philippines became the first country to shut down its stock market as the country goes into lockdown, and the bourse will be closed until further notice.
Sydney rose 5.8 per cent, a day after crashing 9.7 per cent in its worst day on record. But after an early advance, the rest of Asia swung back and forth through the day.
Tokyo ended up 0.1 per cent after a rollercoaster session, Hong Kong added 0.4 per cent in the afternoon and Mumbai rose 0.8 per cent, while Bangkok was slightly up.
But Shanghai slipped 0.3 per cent, while Jakarta sank more than 4 percent. Seoul, Taipei and Singapore were all down.
Yesterday, another £54billion was wiped off the value of the FTSE 100 index as it fell a further 4 per cent, having been down more than 7 per cent in the morning.
It means that British stocks have had almost £730billion wiped off their value in just three weeks.
In the US, the Dow Jones index fell 12 per cent, shedding almost 3,000 points, and the S&P 500 also lost 12 per cent of its value.
The Dow’s 2,999-point fall was the largest daily drop since the Black Monday stock market crash in 1987. President Donald Trump admitted the US may be heading for recession.