FTSE on course for biggest fall since financial crisis - MW

World markets plunged due to fears of a coronavirus recession and the threat of a price war

Global stock markets suffered the largest decline since the 2008 financial crisis, and trading was temporarily suspended on Wall Street after a stock market crash that rocked investors. Concerned about the global economic recession of coronaviruses.

Trades in major US indices were frozen for a few minutes after opening, as breakers were triggered by a 7% drop on the S&P 500. After trading resumed 15 minutes later, the Dow Jones Industrial Index ended down more than 2,000 points for the first time - down more than 7%.

The FTSE 100 in London fell more than 6% in the middle of the afternoon, losing more than 100 billion pounds when it lost 6,000 points before recovering slightly. The British stock market index for the United Kingdom is on track for the worst crash in a day since 2008, when the collapse of the Lehman Brothers ushered in the financial crisis. world. Oil stocks were the biggest losers, with HA down 18% and Shell down 14%. On FTSE 250, Premier Oil shares fell 53% and Tullow Oil fell 27%.

The sale of panic has spread across Europe as the coronavirus epidemic spread around the world. Concerns about the global economy have been exacerbated by Saudi Arabia's shocking decision over the weekend to boost oil production in order to push rivals like Russia and the United States out of the market . school.

All of Germany Dax, France and Spain decreased by more than 6%. Italy, the country most affected by Covid-19 in Europe, posted the biggest sale, the FTSE Mib index having fallen by almost 10%.

The price of Brent crude oil fell 30% to $ 31.14 (£ 23.80), the largest drop since the start of the Gulf War in 1991, before climbing slightly to $ 36.90. the. Some experts expect an even larger drop unless the Saudis and Russians return to the negotiating table. Analysts at S&P Global Platts said that the Saudi price war could bring oil prices below $ 30 a barrel for the first time since the collapse in oil prices in 2016.




Neil Wilson, the chief market analyst at the trading platform Markets.com, said: “This will be remembered as Black Monday. If you thought it couldn’t get any worse than the last fortnight, think again.”

Italy was in turmoil when the government planned to isolate more than 16 million people - more than a quarter of the population - was disclosed to the media. The number of coronavirus infections worldwide has exceeded 110,000 and the number of deaths is approaching 4,000.

As investors flocked to the security of British, American and German government bonds, for the first time, gilt yields became negative. Pigs two, three, four, six and seven, because the British government bonds are called, are negative. For the first time, the 30-year Treasury bill rate fell below 1%. The Japanese yen and gold, also considered safe investments, have soared. Italian bond yields soared when investors owed public debt.

The Asia-Pacific stock market also recorded significant losses. With fears of a slowdown in Australia due to a virus, the Australian stock market closed down 7.4%. The Nikkei index in Japan fell more than 5%, while the Hong Kong Hang Hang lost 3.9% and the Shanghai stock market fell more than 3%.

Credit rating agency Moody said on Monday that the risk of a global economic slowdown is increasing, with the spread of the coronavirus simultaneously causing supply and demand shocks across the global economy.

"The world is facing a medical emergency that financial and monetary policies cannot overcome," said Holger Schmieding, analyst at Berenberg. The situation will stabilize once we have a better understanding of the disease process in the future.

Until then, we face serious risks. This is very different from the debt crisis after Lehman and the euro, when monetary policy makes a big difference.

MW