This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/live/2020/feb/25/stock-market-sell-off-coronavirus-companies-croda-dow-ftse-business-live

The article has changed 22 times. There is an RSS feed of changes available.

Version 5 Version 6
FTSE 100 hits four-month low as stock market sell-off continues – business live FTSE 100 hits four-month low as stock market sell-off continues – business live
(about 1 hour later)
European markets are in the red again after Dow plunged by 1,000 points last nightEuropean markets are in the red again after Dow plunged by 1,000 points last night
The coronavirus is having a painful impact on Italy, forcing several towns to lock down.
The Italian economy was already on the brink of recession, and financial analyst Kathleen Brooks of Minerva fears it could be driven in to a deep crisis:
The coronavirus crisis is also causing ructions in the bond market.
The cost of insuring junk-rated company debt has hit its highest level since October, Bloomber’s Katie Linsell points out. That reflects concerns that a pandemic could leave some firms unable to repay their debts.
After another tough morning, 87 of the 100 companies on the FTSE 100 are in the red as lunchtime approaches.
Neil MacKinnon, Global Macro Strategist at VTB Capital, says investors are right to be very worried:Neil MacKinnon, Global Macro Strategist at VTB Capital, says investors are right to be very worried:
Newsflash! Britain’s FTSE 100 has hit a new four-month low, as markets slide again.Newsflash! Britain’s FTSE 100 has hit a new four-month low, as markets slide again.
The blue-chip index is now down 55 points at 7100, an 0.8% drop. That’s its lowest level since 4th October, adding to the 247 points lost yesterday.The blue-chip index is now down 55 points at 7100, an 0.8% drop. That’s its lowest level since 4th October, adding to the 247 points lost yesterday.
Engineering firm Meggitt and chemicals group Croda are the top fallers, down 4.4% and 3.2% respectively, after they warned that the coronavirus will hurt their businesses this year (as reported earlier).Engineering firm Meggitt and chemicals group Croda are the top fallers, down 4.4% and 3.2% respectively, after they warned that the coronavirus will hurt their businesses this year (as reported earlier).
The travel industry is also sliding again, with TUI down 3% and easyJet down 2%The travel industry is also sliding again, with TUI down 3% and easyJet down 2%
Stocks are under pressure across Europe too, in the face of the latest cases in Iran, Italy and the Canaries. The Stoxx 600 index has lost another 1%, on top of its 3.3% fall on Monday.Stocks are under pressure across Europe too, in the face of the latest cases in Iran, Italy and the Canaries. The Stoxx 600 index has lost another 1%, on top of its 3.3% fall on Monday.
David Madden of CMC Markets says investors are fretting about a global Covid-19 pandemic:David Madden of CMC Markets says investors are fretting about a global Covid-19 pandemic:
Hopes of a recovery on Wall Street have fizzled out too....Hopes of a recovery on Wall Street have fizzled out too....
Hong Kong has posted some shockingly bad trade data today, which show that its economy is sinking deeper into recession.Hong Kong has posted some shockingly bad trade data today, which show that its economy is sinking deeper into recession.
Hong Kong’s exports plummeted the most in more than a decade in January, down 22.7% year-on year. Imports dropped by 16.4%, their 14th monthly decline in a row.Hong Kong’s exports plummeted the most in more than a decade in January, down 22.7% year-on year. Imports dropped by 16.4%, their 14th monthly decline in a row.
Hong Kong’s economy was already shrinking, following the long pro-democracy protests last year. The coronavirus crisis is dealing another blow to its tourism sector, forcing shops to close.Hong Kong’s economy was already shrinking, following the long pro-democracy protests last year. The coronavirus crisis is dealing another blow to its tourism sector, forcing shops to close.
Stephen Innes of AxiCorp says:Stephen Innes of AxiCorp says:
Donald Trump then claimed that the stock markets would hit fresh heights if he were elected, but tumble if he loses in November.Donald Trump then claimed that the stock markets would hit fresh heights if he were elected, but tumble if he loses in November.
The US stock market has gained over 40% since Trump’s shock win in 2016, and there probably is some nervousness on Wall Street about Elizabeth Warren or Bernie Sanders clamping down on the financial sector.The US stock market has gained over 40% since Trump’s shock win in 2016, and there probably is some nervousness on Wall Street about Elizabeth Warren or Bernie Sanders clamping down on the financial sector.
This week’s jitters, though, are definitely virus-related..This week’s jitters, though, are definitely virus-related..
Just in: Donald Trump is discussing yesterday’s market tumble, on his trip to New Delhi.Just in: Donald Trump is discussing yesterday’s market tumble, on his trip to New Delhi.
The stock markets don’t appear to share Donald Trump’s view that the coronavirus is under control, says Pierre Veyret, technical analyst at ActivTrades.The stock markets don’t appear to share Donald Trump’s view that the coronavirus is under control, says Pierre Veyret, technical analyst at ActivTrades.
He writes:He writes:
The White House is facing heavy criticism for not reacting faster to Covid-19, but has now requested $2.5bn in emergency funding.The White House is facing heavy criticism for not reacting faster to Covid-19, but has now requested $2.5bn in emergency funding.
Last night, Donald Trump tweeted that the stock market was looking ‘very good’ -- effectively encouraging Americans to buy shares following the Dow’s 1,000-point dive.Last night, Donald Trump tweeted that the stock market was looking ‘very good’ -- effectively encouraging Americans to buy shares following the Dow’s 1,000-point dive.
European stock markets are now all in the red again, as coronavirus fears rear up again.European stock markets are now all in the red again, as coronavirus fears rear up again.
In another worrying development, authorities in Tenerife are testing hundreds of tourists after a visitor fell ill at a Canary Islands hotel.In another worrying development, authorities in Tenerife are testing hundreds of tourists after a visitor fell ill at a Canary Islands hotel.
With Iran reporting two more deaths from Covid-19 a moment ago, and that latest case in Italy, traders are ditching equities again.With Iran reporting two more deaths from Covid-19 a moment ago, and that latest case in Italy, traders are ditching equities again.
Here’s the damage:Here’s the damage:
FTSE 100: Down 36 points or 0.5% at 7129FTSE 100: Down 36 points or 0.5% at 7129
German DAX: Dow 46 points or 0.33% at 12,988German DAX: Dow 46 points or 0.33% at 12,988
French CAC: down 24 points or 0.4% at 5,767French CAC: down 24 points or 0.4% at 5,767
Italian FTSE MIB: down 147 points or 0.6% at 23,277Italian FTSE MIB: down 147 points or 0.6% at 23,277
Spanish IBEX: down 69 points or 0.7% at 9,414Spanish IBEX: down 69 points or 0.7% at 9,414
Today’s flurry of corporate warnings highlights the damage that a Covid-19 pandemic would have on the global economy -- both on supply chains and on customer demand.
Olivier Blanchard, a former chief economist at the International Monetary Fund, fears that governments will struggle to cushion this blow:
European stocks are under pressure again, because Italian authorities have just announced the first positive coronavirus case in the South of Italy.
A woman from Bergamo, who was on holiday with her friends in Sicily, has tested positive for Covid-19. The patient, who is not in serious conditions, has been transferred to the Hospital Cervello in Palermo, our Coronavirus liveblog reports....
Three more people have died from the virus in Iran (taking the total to 15), and there are almost 1,000 cases in South Korea.
This bad news is weighing on the markets, with cruise operator Carnival and holiday operator TUI both down 2%, among the big fallers in London. The UK, Italian and Spanish markets are all in the red again.
Josh Mahony, senior market analyst at IG, explains:
The rally has fizzled out!
Britain’s FTSE 100 has dropped back to yesterday’s two-month closing low of 7163 points, and the Stoxx 600 index is slightly negative.
Another specialist UK manufacturer, Morgan Advanced Materials, also expects to lose millions of pounds due to Covid-19.
Morgan makes heat-resistant products such as thermal ceramics, crucibles and high-tech seals for use in extreme temperatures and corrosive environments.
It has has been forced to suspend work at a Chinese factory since the coronavirus outbreak began. It also expects to keep a plant in northern Italy closed for the next two weeks.
This will dent Morgan’s output - and thus revenues and profits -- as Reuters explains:
Morgan made operating profits of £134m last year, so this is a small but noticeable hit.
UK engineering and consulting firm Ricardo has issued a profit warning, due to the coronavirus.
Ricardo, which focuses on the transport, energy and scarce resources sectors, has told investors that full-year earnings will suffer a ‘material’ hit because of the Coronavirus’ disruptive impact on its China auto and rail operations.
Ricardo, which has nine offices and technical centres in China, says business development, project delivery and client engagement have all suffered from the crisis.
It says:
European stock markets have opened a little higher after Monday’s rout, but it looks very fragile.
The EU-wide Stoxx 600 index is up 0.5% this morning, having tumbled 3% yesterday. Germany’s DAX and France’s CAC are up around 0.6%.
However the Italian FTSE MIB is continuing to fall, down another 0.5%, after it reported 7 coronavirus deaths and over 200 infections.
The number of cases of Covid-19 worldwide has now hit 80,000 - our main liveblog on the crisis has all the details:
UK specialist chemicals firm Croda has also told the City that the coronavirus crisis could hurt its business.
FTSE 100-listed Croda has five offices in China, in Shanghai, Guangzhou, Beijing, Hong Kong and Taipei, so has suffered some disruption from the restrictions enforced by Beijing.
It told shareholders this morning:
Shares in Croda are down 1.5%, after it also cautioned that demand in industrial markets is expected to remain weak but stable.
Shares in UK engineering firm Meggitt have fallen by 4.5% at the start of trading, after it warned that the coronavirus crisis will hit its growth.
Meggitt, which makes components for the aerospace, defence and energy markets, told shareholders that its key markets will suffer from the spread of Covid-19.
It told the City that organic revenue growth will slow this year, explaining:
Meggitt added that air travel grow is likely to be curtailed by the virus (as industry body IATA warned last week), and that global supply chains will probably suffer from a production backlog due to Chinese factories being closed.
This has pushed the company’s shares to the bottom of the FTSE 100 leaderboard, down 27p at 567p.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Investors around the globe are reeling from the worst day in two years, as anxiety over the coronavirus crisis hit fever pitch.
Stocks tumbled across the globe on Monday, with America’s Dow Jones shedding more than 1,000 points by the close. That’s its third biggest points decline ever, as technology companies, energy providers and mining firms bore the brunt.
The corporate cost of the crisis is mounting too. Overnight, Mastercard cut its financial outlook due to the outbreak and United Airlines withdrew its full-year 2020 guidance.
Japan’s stock markets has suffered heavy losses overnight, as traders catch up with events after a holiday on Monday. The Nikkei index has fallen by 3.34%, or 781 points, to 22,605 in a spate of nervy selling.
Australia’s S&P/ASX index has fallen again today, losing another 1.6%.
European stocks also shed over 3% yesterday, with the Italian FTSE MIB sliding by over 5% after a spate of coronavirus deaths in Italy.
Fears of a pandemic, with massive implications on global supply chains and world economic growth, are rife.
But after very heavy losses across the board yesterday, we may see a small recovery in European stock markets today. Britain’s FTSE 100 has just opened 30 points higher, at 7,186.
That’s only a teensy recovery, mind, as it plunged by 247 points during Monday’s rout.
Investors are glued to the latest reports of infection levels, with the global death toll now over 2,600.
So there’s little chance of the markets calming down soon, argues Michael Hewson of CMC Markets.
The agenda
11am GMT: CBI’s index of UK retail sales: expected to rise to 4, from 0 in January
2pm GMT: The S&P/Case-Shiller index of US house prices
3pm GMT: US consumer confidence survey for February: expected to rise to 132, from 131.6