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Coronavirus fears wipe almost £100bn off Britain’s top market in two days

UK News | Published:

The FTSE 100 Index quickly reversed early gains to stand 1.9% lower, having dived 3.3% on Monday in its biggest one-day fall for more than four years.

London’s top flight index has dropped by nearly £100 billion in just 48 hours as fears over the spread of coronavirus extended a brutal share sell-off.

An earlier pause for breath on European indices proved short-lived, with London’s FTSE 100 Index soon joining its counterparts on the continent in diving lower once more.

The UK’s blue chip index quickly reversed early gains to close the day 138.95 points or 1.9% lower at 7017.88, having dived 3.3% on Monday in its biggest one-day fall in more than four years.

More than £62 billion was wiped off the value of Britain’s top share index in the previous session after news of the first major outbreak of coronavirus in Europe, with Italy suffering hundreds of cases.

Covid-19: confirmed cases
(PA Graphics)

Across Europe, the Dax in Germany fell 1.8% and France’s Cac 40 was 2% lower, having both fallen 4% on Monday.

Spain’s Ibex was also more than 2.3% lower after it emerged a hotel in the Canary Islands was in lockdown after an Italian doctor tested positive for the virus, also known as Covid-19.

Equities had showed signs of stabilising as investors looked to pick up bargains after the heavy falls, thanks also to a cautious rise on the Hang Seng index in Hong Kong overnight.

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But investors soon continued heading for the exit as it became clear the outbreak is far from being contained and will take a heavy toll on the global economy.

The FTSE 100’s woes were also compounded by gains for the pound on hopes of a major fiscal spending boost in next month’s Budget.

Sterling lifted 0.5% to 1.30 US dollars and 0.4% to 1.20 euros, which sparked declines on the top tier as a large proportion of profits for FTSE 100 companies is made in dollars.

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He said: “There is no question financial markets are coming round to the realisation that this particular crisis is likely to have a slightly longer shelf life than many thought was the case a couple of weeks ago.”

“There appears little prospect that financial markets look likely to settle down in the short term, which means investors will have to get used to an extended period of uncertainty and volatility,” he added.

Travel stocks and airlines were once again among the biggest losers in London, following steep declines in Monday’s market falls.

Holiday giant TUI and low-cost carrier easyJet fell another 4.9% and 3.5% respectively, while Holiday Inn owner Intercontinental Hotels Group was 3.2% down.

British Airways owner International Airlines Group was nearly 2.3% lower after falling more than 9% on Monday.

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