FTSE opens down again as it falls 8 per cent to dip below 5,000 to lowest level in nine years – despite global central banks stepping in to battle virus crisis
The FTSE 100 plunged yet again today as it fell nearly 8 per cent despite global central banks slashing interest rates after one of the worst weeks in its history.
The index of Britain’s leading companies dropped 445 points or 8.3 per cent to 4,921 in the first half an hour after opening this morning as the coronavirus outbreak continues to intensify.
The fall meant the index dropped to its lowest level since October 2011, adding to a 17 per cent drop last week.
Today, Boris Johnson will discuss strengthening coronavirus-tackling measures with officials and could make a decision on shielding elderly citizens, banning mass gatherings and household isolation.
The FTSE 100 index is shown falling this morning (far right) and last Friday (rest of the graph)
The Prime Minister will chair an emergency meeting of the Cobra committee this afternoon before addressing the first of the daily press conferences being planned to update the public on Covid-19.
As the UK death toll reached 35 on Sunday, Health Secretary Matt Hancock said that over-70s could be told to stay home for up to four months within the “coming weeks”.
The number of confirmed positive tests reached 1,372, but the true figure of people in the UK with the disease is likely to be far higher.
The coordinated stimulus actions by central banks failed to calm who feared deeper economic damage from the pandemic.
Airline stocks took the biggest hit as Britain’s government looked set to discuss how to help the sector after major airlines including Virgin Atlantic and easyJet said the state would need to step in to prevent a collapse.
ICAG, the owner of British Airways, slid 20 per cent after saying it would cut its flying capacity by at least 75 per cent in April and May. Share of EasyJet and TUI AG slumped 21 per cent and 24 per cent, respectively.
An electronic signboard at KB Kookmin Bank shows the KOSPI index down in Seoul today
In a bid to improve liquidity and ease strains in global funding markets, the U.S Federal Reserve slashed its interest rates to near zero on Sunday, while its peers in New Zealand, Australia and Japan unveiled their own measures.
Shares in major lenders including Barclays, Royal Bank of Scotland and LLoyds Banking Group fell between 4.6 per cent and 9 per cent.
The moves, however, gave little impetus for investors as things worsened over the weekend, with holiday destinations such as Spain declaring a state of emergency and the Donald Trump administration adding Britain and Ireland to its list of countries facing travel curbs.
Last Friday, the FTSE enjoyed a brief rally but managed to cling onto gains of just 2.5 per cent as fears over coronavirus continued to chill the economy.
Over the course of week, £286billion was wiped off the value of FTSE 100 firms as investors dropped their shares, fearing coronavirus will cause a major economic slowdown and even a recession.
Since the sell-off began in earnest, on February 24, the index has lost a quarter of its value, or £460billion.
The Bank of England announced an emergency injection of money into the economy this week, including an interest rate cut from 0.75 per cent to 0.25 per cent.
Though this will make it cheaper for companies to borrow, it has hit savers who were already suffering with near record-low rates.
Since the sell-off began in earnest, on February 24, the index has lost a quarter of its value, or £460billion.
The Bank of England announced an emergency injection of money into the economy this week, including an interest rate cut from 0.75 per cent to 0.25 per cent.
Though this will make it cheaper for companies to borrow, it has hit savers who were already suffering with near record-low rates.