THE FTSE100 opened 3.7 per cent down this morning over coronavirus fears as stock markets around the world took their biggest pounding since 2008.
In the UK, the number of confirmed coronavirus cases has hit 19, while Northern Ireland has also confirmed its first case – follow our live blog for the latest.
It's seen London's top index, the FTSE100, which is made up of the UK's 100 largest firms, on course for its worst week since the depths of the financial crisis in October 2008.
In terms of points lost it is also the FTSE100's second worst week since the index was founded in 1984.
The index dropped by 3.7 per cent at the opening of the markets this morning, falling to 6,545.
It had already closed the day down 246.07 points to 6796.4 – a 3.5 per cent drop, and at one point lost more than 4 per cent of its value.
The tumbling value has seen £152billion wiped off the index in the past four days amid fears around Covid-19.
If it continues to fall over the course of the day another £60billion could be wiped off it.
That said, it has edged up gradually throughout the day and is currently at 6,598 – although that's still down 2.9 per cent.
Bank of England Governor, Mark Carney, told Sky News this morning that Britain should prepare for an economic hit from coronavirus.
He warned: "We would expect world growth would be lower than it otherwise would be, and that has a knock-on effect on the UK.
"We're not picking that up yet at all in the European and UK economic indicators, but if the world is slower than the UK, a very open economy, it will have an impact."
Mr Carney added that global supply chains have tightened, while there's less tourism – even on the streets in the UK – all of which is having an impact on the markets.
On the FTSE100, every company other than Rolls-Royce was falling on Friday morning just after markets opened.
The worst losers were the airlines, with British Airways owner IAG seeing a more than 9.5 per cent drop in share price, and Tui, the travel group, notching a 6.2 per cent fall.
But its not just the UK's largest index that have crashed, in the US the Dow Jones suffered its worst drop in history of almost 1,200 points – a 4.4 per cent fall.
America's Nasdaq index is also down 437 points or 4.93 per cent to 8,436, while the S&P 500 has fallen 4.4 per cent or by 137 points to 2,978.
Markets are panicking – should you?
THE Sun's business editor, Tracey Boles, share her thoughts on this week's tumbling stock markets:
Stock markets around the world are heading for their third worst week EVER, behind the 1987 crash and the post-Lehman Brothers meltdown of autumn 2008.
In London, the FTSE100 blue chip index of shares is down 11 per cent this week which is bad news for shareholders as well as for the pensions and Isas invested in stocks.
Meanwhile, outgoing Bank of England governor Mark Carney has said the UK can expect an economic knock.
But comparisons to the financial crisis are premature, City analysts say.
Russ Mould of AJ Bell said: “Another 2008? That was the Collapse of the Western Financial System as we knew it.
“Based on what we know today, the outbreak is not in the same league by comparison, in economic terms at least, frightening and unquantifiable as it is."
He added: "It’s not even as bad as the European debt crisis of 2011 when there was a risk of another banking and economic meltdown and a major recession.”
So why are markets taking such a hammering?
Traders have taken fright since the outbreak spread from Asia to Europe – and the corporate warnings are mounting up.
So far, 132 UK listed companies have warned of coronavirus effects.
“Markets have been on ten-year run and 10 per cent corrections have been very, very rare," Mr Mould said.
"Now they are having to take a more sober, reflective view as earnings forecasts are nudged lower and risks go higher. In summary, investors had started to forget that share prices can go down as well as up.”
The markets may be panicking, but the best thing that investors can do is take the long view. Shares should recover in the medium term, as they usually do.
Wall Street suffered its worst two-day losing streak in two years on Wednesday.
Connor Campbell, an analyst at Spreadex said: "With the Dow Jones suffering its greatest ever single session fall overnight, Thursday's freefalling momentum carried over into Friday morning, leading to a gory start for Europe and pushing the market towards its worst week since the financial crisis.
"The FTSE sank below 6,600 for the first time since the final days of 2018."
In France, the Cac is down 3.8 per cent to 5,285 while the Frankfurt-based Dax index dropped has dropped by 4.61 per cent to 11,798.
Tokyo’s Nikkei225 index has fallen by 3.6 per cent to 21,142.
In Indonesia, Jakarta’s JKSE fell four percent overnight, while Shanghai, Seoul, Bangkok, and Sydney all lost more than three percent.
Major firms including Apple, Microsoft, and Mastercard are now expecting revenues to be lower than forecast because of supply chain disruptions caused by the virus.
Adrian Lowcock, head of personal investing at investment platform Willis Owen said: “Up until this week markets were fairly relaxed about it as they hoped the impact was limited to China and thus the feed through to global growth would be short term and limited.
“That’s changed now there have been significant breakouts in Italy particularly, and a concerning case in the US.
"This has undoubtedly raised the possibility that it will become a global issue, and if this comes to pass this will have a much bigger impact on global growth and hit company profits."
Russ Mould, investment director at platform AJ Bell, added: “It is another catastrophic day for investors as global stock markets continue to fall.
“This has been one of the worst weeks on the markets in a very long time, leaving investors’ portfolios battered and bruised."
Source: Read Full Article