FTSE 100 drops to 13-month low after slumping 7% in four days over coronavirus fears

The London stock market fell to a 13-month low today as coronavirus fears continue to grip investors with shares also slumping across Asia.

The FTSE 100 index of the UK’s biggest listed companies has now fallen more than 7 per cent in the past four days, and fell 2.6 per cent in early trading on Thursday.

The losses mirrored earlier slumps in Asia with Japan’s Nikkei 225 index falling 2.1 per cent and the Kospi in South Korea, where 334 new cases of the virus were reported, dropped one per cent.

Hong Kong’s Hang Seng and the Australian S&P ASX/200both both lost 0.8 per cent.

The losses continue a dire week on the global markets with US stocks suffering the worst two-day losing streak in two years on Monday and Tuesday.

Companies around the world are reporting how the outbreak is hitting profits and trading. 

Aston Martin warned that Chinese customers are falling, while Asian-focused bank Standard Chartered warned the economy in the region was taking a hit and Microsoft said computer sales were suffering.

Apple has also been hit by the outbreak as most of its production is carried out in China.  

Pedestrians in face masks outside a securities office in Tokyo, Japan, showing global stock markets plunging

Graph showing losses on Japan's Nikkei 225 index this week amid coronavirus fears

Graph showing losses on Japan’s Nikkei 225 index this week amid coronavirus fears 

But on the markets, it was airlines and holiday firms that were hardest hit, with shares in Tui, easyJet and British Airways owner IAG all down heavily.

EasyJet has suffered harder than most, with shares collapsing 26% in a week, as holidaymakers postpone trips and businesses reduce travelling.

Some traders had expected stock markets needed a ‘correction’ because they had been trading at record levels in recent months. But some were questioning whether this was more than a correction.

Ipek Ozkardeskaya, of Swissquote bank, said: ‘The slide we are seeing right now is not the correction of the recent stock rally, but the market’s understanding that the coronavirus outbreak would translate into significantly lower earnings and an anaemic global growth.

‘If we add the fact that the crisis has only started outside China into the mix, there is a meaningful shift in stock valuations.’

There was some good news for businesses, however, as Reckitt Benckiser revealed sales of cleaning and hygiene products have increased.

Hopes were dashed on Wednesday when stock markets in the US rose in the morning, but as the day progressed they fell, with traders unimpressed with an intervention from Donald Trump.

Companies hate uncertainty, and with China accounting for 20% of the world’s manufacturing, along with high-spending middle-classes not travelling, businesses are starting to assess the impact of any long-term outbreak.

In Europe the FTSE 100 Index in London slipped below 7,000 at one point on Wednesday before improving and closing up 0.35 per cent. 

The Dax in Germany fell by 0.12 per cent, but the Cac 40 in France was up by 0.09 per cent and Italy’s FTSE MIB rose 1.44 per cent.

As the number of global cases soared past 81,000 and the death toll rose above 2,700, the central bank downgraded its growth estimate for 2020 to 2.1 per cent from 2.3 per cent. 

Japan's Nikkei 225 index has fallen dramatically over the last month as fears over the spread of coronavirus and its impact on businesses and the economy have grown

Japan’s Nikkei 225 index has fallen dramatically over the last month as fears over the spread of coronavirus and its impact on businesses and the economy have grown

Stock markets around the world have suffered a dire week as coronavirus cases increase

Stock markets around the world have suffered a dire week as coronavirus cases increase 

It said the virus outbreak – which has now spread to every continent except Antarctica – would have a short-term impact on business activity after growth fell to its slowest in a decade last year.



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