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You can find the current article at its original source at https://www.theguardian.com/business/live/2020/mar/12/stock-markets-tumble-trump-europe-travel-ban-ecb-christine-lagarde-business-live
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| Stock markets tumble as Trump's Europe travel ban shocks investors - business live | Stock markets tumble as Trump's Europe travel ban shocks investors - business live |
| (32 minutes later) | |
| Rolling coverage of the latest economic and financial news, as world stock markets plunge again | Rolling coverage of the latest economic and financial news, as world stock markets plunge again |
| The speed and scale of the destruction of shareholder value in the last few weeks is shocking. | |
| The 25% wiped off the FTSE 100 since 21 February is equal to roughly £470bn - a huge debt in pension pots, ISAs and tracker funds. | |
| Hopes that the sell-off might abate have consistently been crushed as Covid-19 has continued to spread -- making a global recession more and more likely. | |
| Worryingly, the cost of insuring airline’s debt against default is rising this morning too. | |
| The CBOE VIX index, which tracks volatility in the markets, have surged to its highest level since 2008, Reuters reports. | |
| That shows just how scared investors are about situation today. | |
| The EU-wide Stoxx 600 has plunged by 6.7% this morning, with markets an absolute sea of red. | |
| The technology sector is down 8%, consumer cyclicals have lost 7%, industrial groups are down 6.9% and banks have lost another 6.6%. | |
| This takes the Stoxx 600’s losses for 2020 to 25%. | |
| Wild trading in London has driven the FTSE 100 as low as 5,482 points, down over 6% today. | |
| Every single company on the blue-chip index, and on the smaller FTSE 250 index, is down. | |
| Cineworld has slumped 30% after it warned it could breach its banking covenants if cinemas are forced to close (see earlier post). | |
| Wall Street is heading for another slump too -- trading in futures contracts have been suspended ‘limit down’, after falling 5%. | |
| Markets face a ‘perfect storm’ today, warns Ayush Ansal, chief investment officer at Crimson Black Capital: | |
| WH Smith shares have tumbled 17% this morning after the retailer issued a profit warning because of the coronavirus pandemic. | WH Smith shares have tumbled 17% this morning after the retailer issued a profit warning because of the coronavirus pandemic. |
| The company flagged a “significant impact” on its shops at airports in Asia Pacific, which accounts for 5% of its travel division’s revenues. And in the last fortnight, passenger numbers at airports in the UK (60% of revenue), the US (25% of revenue) and Europe have also dropped. The outbreak could also affect high street spending in the UK, and will drag down WH Smith’s revenues and profits this year. The company warned that revenues would be £100m to £130m lower in the year to 31 August while profits before tax are likely to be £30m to £40m lower. Trump’s 30-day European travel ban is clearly not helping... | The company flagged a “significant impact” on its shops at airports in Asia Pacific, which accounts for 5% of its travel division’s revenues. And in the last fortnight, passenger numbers at airports in the UK (60% of revenue), the US (25% of revenue) and Europe have also dropped. The outbreak could also affect high street spending in the UK, and will drag down WH Smith’s revenues and profits this year. The company warned that revenues would be £100m to £130m lower in the year to 31 August while profits before tax are likely to be £30m to £40m lower. Trump’s 30-day European travel ban is clearly not helping... |
| UK chancellor Rishi Sunak has said Britain has no plans to shut its borders. | UK chancellor Rishi Sunak has said Britain has no plans to shut its borders. |
| Speaking on Radio 4’s Today Progamme, Sunak said the evidence doesn’t support such a move. | Speaking on Radio 4’s Today Progamme, Sunak said the evidence doesn’t support such a move. |
| He says the UK government is determined to take the right steps at the right time, an doesn’t feel a travel ban is the right thing to do. | He says the UK government is determined to take the right steps at the right time, an doesn’t feel a travel ban is the right thing to do. |
| Sunak also denied that the huge borrowing plans announced in yesterday’s budget are a gamble, pointing out that government bond yield (interest rates) are at record lows [partly because panicky investors are piling into bonds and ditching shares] | Sunak also denied that the huge borrowing plans announced in yesterday’s budget are a gamble, pointing out that government bond yield (interest rates) are at record lows [partly because panicky investors are piling into bonds and ditching shares] |
| Cineworld isn’t the only company warning about the impact of coronavirus this morning. | Cineworld isn’t the only company warning about the impact of coronavirus this morning. |
| The upmarket estate agents Savills has flagged that the coronavirus pandemic has caused a big drop in deals in China and elsewhere in Asia – and this could also happen in other countries as the virus spreads. | The upmarket estate agents Savills has flagged that the coronavirus pandemic has caused a big drop in deals in China and elsewhere in Asia – and this could also happen in other countries as the virus spreads. |
| Its chairman, Nicholas Ferguson, said: | Its chairman, Nicholas Ferguson, said: |
| Cineworld, the world’s second-largest movie chain, has warned if the spread of the coronavirus forced the closure of all its cinemas for two to three months it would face breaching its financial covenants with lenders. | Cineworld, the world’s second-largest movie chain, has warned if the spread of the coronavirus forced the closure of all its cinemas for two to three months it would face breaching its financial covenants with lenders. |
| The company, which said cinema admissions in January and February were up year-on-year and are currently at a “good level”, is planning cost cuts and delaying capital expenditure as virus measures. | The company, which said cinema admissions in January and February were up year-on-year and are currently at a “good level”, is planning cost cuts and delaying capital expenditure as virus measures. |
| The company has no cinemas in China, where movie theatres have been closed since the beginning of February, with 75% of its business in North America. About 10% is derived from the U.K. & Ireland and the remainder is from operations in the rest of the world, mostly Eastern Europe. | The company has no cinemas in China, where movie theatres have been closed since the beginning of February, with 75% of its business in North America. About 10% is derived from the U.K. & Ireland and the remainder is from operations in the rest of the world, mostly Eastern Europe. |
| The company said that aside from the new James Bond film, No Time To Die, which has been postponed from April to November, Hollywood studios “remain committed” to their movie release schedules this year. | The company said that aside from the new James Bond film, No Time To Die, which has been postponed from April to November, Hollywood studios “remain committed” to their movie release schedules this year. |
| If this rout continues, the FTSE 100 index will soon hits its lowest level since 2012, when the eurozone debt crisis was raging. | If this rout continues, the FTSE 100 index will soon hits its lowest level since 2012, when the eurozone debt crisis was raging. |
| European stock markets are also taking a bath: | European stock markets are also taking a bath: |
| The FTSE 100 has slumped to its lowest level since February 2016. | The FTSE 100 has slumped to its lowest level since February 2016. |
| Airline stocks are, predictably, being hit particularly hard. British Airways parent company, IAG, has lost 10.5%. EasyJet has slumped by 11.3%, while holiday maker TUI is off 8.7% | Airline stocks are, predictably, being hit particularly hard. British Airways parent company, IAG, has lost 10.5%. EasyJet has slumped by 11.3%, while holiday maker TUI is off 8.7% |
| Mining giant Anglo American has fallen 10.5%, reflecting the growing fears of a painful global recession. | Mining giant Anglo American has fallen 10.5%, reflecting the growing fears of a painful global recession. |
| A fresh wave of selling in early trading has sent Britain’s stock market slumping again. | A fresh wave of selling in early trading has sent Britain’s stock market slumping again. |
| The FTSE 100 index has plunged by 311 points, or 5.3%, down to 5565. Every single share is falling. | The FTSE 100 index has plunged by 311 points, or 5.3%, down to 5565. Every single share is falling. |
| Jet engine maker Rolls-Royce is the top faller, slumping by 13%. | Jet engine maker Rolls-Royce is the top faller, slumping by 13%. |
| Donald Trump’s EU travel ban has clearly shocked City investors, and dashed hopes that the worst of the market meltdown could be behind us. | Donald Trump’s EU travel ban has clearly shocked City investors, and dashed hopes that the worst of the market meltdown could be behind us. |
| Last month, before the crisis began, the FTSE 100 was trading around 7,404 points -- the stock index has fallen by around 25% since. | Last month, before the crisis began, the FTSE 100 was trading around 7,404 points -- the stock index has fallen by around 25% since. |
| Neil Wilson of Markets.com also believes Donald Trump has made a bad situation much worse: | Neil Wilson of Markets.com also believes Donald Trump has made a bad situation much worse: |
| Donald Trump’s measures are likely to help push the world into recession, fears Mohamed El-Erian, chief economist of insurer Allianz. | Donald Trump’s measures are likely to help push the world into recession, fears Mohamed El-Erian, chief economist of insurer Allianz. |
| El-Erian warned: | El-Erian warned: |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| The global stock market slump is intensifying today after US president Donald Trump banned travel to America from the European Union for a month, to combat the spread of Covid-19. | The global stock market slump is intensifying today after US president Donald Trump banned travel to America from the European Union for a month, to combat the spread of Covid-19. |
| During a rare address to the nation, Trump blamed on the European Union for not acting quickly enough to address the “foreign virus”, saying US clusters had been “seeded” by European travellers. | During a rare address to the nation, Trump blamed on the European Union for not acting quickly enough to address the “foreign virus”, saying US clusters had been “seeded” by European travellers. |
| The shock restrictions will affect all foreign nationals (but not US or UK citizens) coming from the Schengen area, were announced as Trump continued to downplay the severity of Covid-19 - insisting the risk was “very, very low” for most Americans. | The shock restrictions will affect all foreign nationals (but not US or UK citizens) coming from the Schengen area, were announced as Trump continued to downplay the severity of Covid-19 - insisting the risk was “very, very low” for most Americans. |
| Hopes of a massive stimulus package were dashed. Trump did again called for immediate payroll tax cuts, and said he’d instruct the Treasury Department to allow individuals and businesses negatively affected by the coronavirus to defer their tax payments. | Hopes of a massive stimulus package were dashed. Trump did again called for immediate payroll tax cuts, and said he’d instruct the Treasury Department to allow individuals and businesses negatively affected by the coronavirus to defer their tax payments. |
| He also promised emergency action to provide financial relief for working Americans who are ill or quarantined, and said he’d push Congress for $50bn for small business loans. | He also promised emergency action to provide financial relief for working Americans who are ill or quarantined, and said he’d push Congress for $50bn for small business loans. |
| Trump’s appearance came just hours after the Dow Jones industrial average plunged into bear market, having dropped more than 20% from its recent high. | Trump’s appearance came just hours after the Dow Jones industrial average plunged into bear market, having dropped more than 20% from its recent high. |
| Asia-Pacific markets have been rocked already, with Japan’s Nikkei falling over 4% and Australia slumping over 7%. | Asia-Pacific markets have been rocked already, with Japan’s Nikkei falling over 4% and Australia slumping over 7%. |
| European markets are heading for fresh heavy falls today, with the FTSE 100 being called down another 5% - or at least 300 points, down to 5576. Airlines will surely be severely hit, as they already grapple with the threat of a global downturn. | European markets are heading for fresh heavy falls today, with the FTSE 100 being called down another 5% - or at least 300 points, down to 5576. Airlines will surely be severely hit, as they already grapple with the threat of a global downturn. |
| Investors are losing faith in policymakers abilities to address the coronavirus crisis, with Italy now under a full-blown lockdown. | Investors are losing faith in policymakers abilities to address the coronavirus crisis, with Italy now under a full-blown lockdown. |
| Jeffrey Halley, senior market analyst at OANDA, says Trump has ‘toppled the markets’: | Jeffrey Halley, senior market analyst at OANDA, says Trump has ‘toppled the markets’: |
| Later today the European Central Bank may announce stimulus measures of its own, at its regular monetary policy meeting. | Later today the European Central Bank may announce stimulus measures of its own, at its regular monetary policy meeting. |
| The agenda | The agenda |
| 12.45pm GMT: European Central Bank interest rate decision | 12.45pm GMT: European Central Bank interest rate decision |
| 1.30pm GMT: Press conference with ECB chief Christine Lagarde | 1.30pm GMT: Press conference with ECB chief Christine Lagarde |