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FTSE 100 suffers worst day since 1987 crash as £160bn wiped off shares – business live FTSE 100 shares lose £160bn as European stocks suffer historic losses – business live
(32 minutes later)
Britain’s FTSE 100 index has endured its worst day since 1987 as world stock markets plunge againBritain’s FTSE 100 index has endured its worst day since 1987 as world stock markets plunge again
A recap: here’s the damage from across Europe on a day that will be remembered long into the future (for all the wrong reasons).
The FTSE 100 fell by 10.87%, its most since 1987 (the day after Black Monday). That was the second worst daily fall since the index started on 3 January 1984.
The Euro Stoxx 600, which tracks shares across Europe and the UK, fell by 11.48% – the worst day since that record began in 1998.
Italy’s FTSE MIB lost 16.92%, its worst loss ever.
Germany’s Dax index fell by 12.24%; France’s Cac 40 lost 12.28%.
The car industry and the insurance sector were the worst performing sectors.
Market participants are shellshocked. Neil Wilson, chief market analyst at Markets.com, said:
US stocks are almost back where they were before the NY Fed intervened.
The S&P 500 is down by 7.9%. The Dow Jones industrial average has lost 8.3%, the Nasdaq has lost 7.7%.
Oil prices were briefly boosted by the Fed’s intervention in the markets, but the good cheer did not last.
A barrel of Brent crude, the North Sea benchmark, will set you back $32.71, according to futures prices. That represents a fall of 8.6% today.
Prices were briefly almost at $36 per barrel only this morning.
Here’s the long haul: a chart showing oil prices since 2015.
On a normal day that would be the headline gracing newspaper front pages. Today it feels almost like a footnote.
It’s worth taking a look back at some of the moves among UK shares on the FTSE 100 and the FTSE 250 today.It’s worth taking a look back at some of the moves among UK shares on the FTSE 100 and the FTSE 250 today.
Here’s the picture of the biggest fallers on the FTSE 100 (there aren’t any gainers):Here’s the picture of the biggest fallers on the FTSE 100 (there aren’t any gainers):
The FTSE 250 fell by 9.35% – its third worst day. Among the mid-caps:The FTSE 250 fell by 9.35% – its third worst day. Among the mid-caps:
Finablr, the owner of Travelex, lost 79.9% of its value today. It said it has launched an internal investigation into its financial situation and that it will take steps to address a liquidity squeeze.Finablr, the owner of Travelex, lost 79.9% of its value today. It said it has launched an internal investigation into its financial situation and that it will take steps to address a liquidity squeeze.
Premier Oil lost 45% after a lender send it should abandon proposed acquistions to save cash.Premier Oil lost 45% after a lender send it should abandon proposed acquistions to save cash.
Go Ahead, the operator of buses and rail services such as Southeastern, dropped 31.5% after it said it would be hit in the second half of the year.Go Ahead, the operator of buses and rail services such as Southeastern, dropped 31.5% after it said it would be hit in the second half of the year.
In fact, the Fed’s actions in total represent more than $1.5tn in liquidity: $500bn for the three-month repo market today, followed tomorrow by $500bn in that market and $500bn in the one-month repo market.In fact, the Fed’s actions in total represent more than $1.5tn in liquidity: $500bn for the three-month repo market today, followed tomorrow by $500bn in that market and $500bn in the one-month repo market.
Seema Shah, chief strategist, Principal Global Investors, said:Seema Shah, chief strategist, Principal Global Investors, said:
The actions of the NY Fed (which is responsible for market operations on behalf of its parent, the US Federal Reserve) have sparked talk of a return of quantitative easing.The actions of the NY Fed (which is responsible for market operations on behalf of its parent, the US Federal Reserve) have sparked talk of a return of quantitative easing.
It’s “QE4”, said Ian Shepherdson, chief economist at Pantheon Macroeconomics. He pointed to a modification of the Fed’s $60bn purchases of bonds, which it carries out to manage the stock of assets built up under quantitative easing. The Fed will widen the purchases to a broader range of debt.It’s “QE4”, said Ian Shepherdson, chief economist at Pantheon Macroeconomics. He pointed to a modification of the Fed’s $60bn purchases of bonds, which it carries out to manage the stock of assets built up under quantitative easing. The Fed will widen the purchases to a broader range of debt.
Shepherdson said:Shepherdson said:
Prime minister Boris Johnson has described the coronavirus outbreak as the “worst public health crisis for a generation”.Prime minister Boris Johnson has described the coronavirus outbreak as the “worst public health crisis for a generation”.
The true number of cases is higher, “perhaps much higher”, than the latest figures suggest, he said.The true number of cases is higher, “perhaps much higher”, than the latest figures suggest, he said.
You can follow those developments here:You can follow those developments here:
The $500bn operation came too late for European markets, but it appears to have given limited succour to US investors.The $500bn operation came too late for European markets, but it appears to have given limited succour to US investors.
The US repo markets are a crucial part of the financial system, allowing banks and other financial institutions to borrow money against US government Treasury bonds. The NY Fed’s statement said that there had been problems in transactions in this market.The US repo markets are a crucial part of the financial system, allowing banks and other financial institutions to borrow money against US government Treasury bonds. The NY Fed’s statement said that there had been problems in transactions in this market.
However, the liquidity actions will not address the underlying economic weaknesses that are scaring investors.However, the liquidity actions will not address the underlying economic weaknesses that are scaring investors.
Here’s the full statement from the New York Fed.Here’s the full statement from the New York Fed.
Fireman Fed?Fireman Fed?
Hello, Jasper Jolly here, taking over from Graeme Wearden. And the news isn’t stopping:Hello, Jasper Jolly here, taking over from Graeme Wearden. And the news isn’t stopping:
The Federal Reserve Bank of New York has stepped in with a $500bn injection of liquidity into markets – helping US stocks to recover some losses.The Federal Reserve Bank of New York has stepped in with a $500bn injection of liquidity into markets – helping US stocks to recover some losses.
The NY Fed’s actions came after “highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak”.The NY Fed’s actions came after “highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak”.
This is from their statement:This is from their statement:
The S&P 500’s losses recovered to about 3.5% in the immediate aftermath of the move, but then sold off again. It’s now down by about 5.7%.The S&P 500’s losses recovered to about 3.5% in the immediate aftermath of the move, but then sold off again. It’s now down by about 5.7%.
More details to come...More details to come...
Today’s slump has wiped another £160bn off the value of Britain’s biggest blue-chip companies, I calculate.Today’s slump has wiped another £160bn off the value of Britain’s biggest blue-chip companies, I calculate.
The FTSE 100 index of leading shares listed in London has now plunged by almost 30% in the last three weeks - a shockingly sharp move, with a severe impact on savers, pensions funds and ISA holders.The FTSE 100 index of leading shares listed in London has now plunged by almost 30% in the last three weeks - a shockingly sharp move, with a severe impact on savers, pensions funds and ISA holders.
NEWSFLASH: Britain’s FTSE 100 has suffered its biggest one-day loss since October 1987, and its second worst day ever.NEWSFLASH: Britain’s FTSE 100 has suffered its biggest one-day loss since October 1987, and its second worst day ever.
The escalating coronavirus crisis has triggered an absolute rout in the City again, and around Europe, as Donald Trump’s EU flight ban sparks alarm -- and fuels fears of a global recession.The escalating coronavirus crisis has triggered an absolute rout in the City again, and around Europe, as Donald Trump’s EU flight ban sparks alarm -- and fuels fears of a global recession.
Investors appear to be pricing in a serious pandemic, with quarantine measures and lockdowns in major cities leading to huge economic cost, and losing faith that policymakers can prevent it.Investors appear to be pricing in a serious pandemic, with quarantine measures and lockdowns in major cities leading to huge economic cost, and losing faith that policymakers can prevent it.
The FTSE 100 has just closed down 10.87% today at 5237, a loss of 639 points.The FTSE 100 has just closed down 10.87% today at 5237, a loss of 639 points.
Its only worse day was 20th October 1987 (as this chart shows).Its only worse day was 20th October 1987 (as this chart shows).
There are some deep, deep losses - mining giants Anglo American and Glencore shed 18% and 17% respectively. Cruise operator Carnival plunged 17% too, after suspending its Princess cruises line for two months. Holiday firm TUI also lost 17%.There are some deep, deep losses - mining giants Anglo American and Glencore shed 18% and 17% respectively. Cruise operator Carnival plunged 17% too, after suspending its Princess cruises line for two months. Holiday firm TUI also lost 17%.
Insurance giant Prudential and asset manager Standard Life Aberdeen both lost at least 16%, with Barclays down 17%. Every single share fell, in a bigger wipeout than Monday’s slump.Insurance giant Prudential and asset manager Standard Life Aberdeen both lost at least 16%, with Barclays down 17%. Every single share fell, in a bigger wipeout than Monday’s slump.
David Madden of CMC Markets sums up the day:David Madden of CMC Markets sums up the day:
Newsflash: Italy’s stock market has closed down 17%, Reuters is reporting - its worst day ever.Newsflash: Italy’s stock market has closed down 17%, Reuters is reporting - its worst day ever.
The EU-wide Stoxx 600 also had a terrible day, down 11% at the close of trading.The EU-wide Stoxx 600 also had a terrible day, down 11% at the close of trading.
We’re just waiting for London to close now, but it’s going to be awful.We’re just waiting for London to close now, but it’s going to be awful.
Donald Trump continues to insist that the coronavirus will “go away”, speaking at the White House earlier.Donald Trump continues to insist that the coronavirus will “go away”, speaking at the White House earlier.
That will further alarm investors who fear the President isn’t taking the crisis seriously enough.That will further alarm investors who fear the President isn’t taking the crisis seriously enough.
Donald Trump’s decision to ban EU flights from America was “the most expensive speech in history”, says Luca Paolini, chief strategist at Pictet Asset Management.Donald Trump’s decision to ban EU flights from America was “the most expensive speech in history”, says Luca Paolini, chief strategist at Pictet Asset Management.
And with European markets down 10% today, and Wall Street down over 8%, it’s hard to argue.And with European markets down 10% today, and Wall Street down over 8%, it’s hard to argue.
Global stock markets have plunged into a bear market today, Reuters reports.Global stock markets have plunged into a bear market today, Reuters reports.
Today’s plunges in London, Paris, Frankfurt, New York, Tokyo, Seoul, Shanghai, Sydney and beyond have dragged the MSCI All-Country World index off over 20% from recent peak, less than a month ago.Today’s plunges in London, Paris, Frankfurt, New York, Tokyo, Seoul, Shanghai, Sydney and beyond have dragged the MSCI All-Country World index off over 20% from recent peak, less than a month ago.
As Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas, puts it:As Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas, puts it:
Christine Lagarde is trying to repair the damage from her comment about “not being here to close [bond] spreads”.Christine Lagarde is trying to repair the damage from her comment about “not being here to close [bond] spreads”.
She’s told CNBC that the European Central Bank’s new package to protect the economy from the coronavirus will help close “dislocations” in the bond market:She’s told CNBC that the European Central Bank’s new package to protect the economy from the coronavirus will help close “dislocations” in the bond market:
ECB chief Christine Lagarde appears to have caused serious panic in the market today.ECB chief Christine Lagarde appears to have caused serious panic in the market today.
During her press conference, she was asked about the jump in bond spreads (the gap between yields on risky and less risky assets) -- and appeared to reply that it wasn’t her problem.During her press conference, she was asked about the jump in bond spreads (the gap between yields on risky and less risky assets) -- and appeared to reply that it wasn’t her problem.
That has driven Italian bond yields soaring today.That has driven Italian bond yields soaring today.
As I flagged earlier, Lagarde’s message was that government’s need to step up -- but investors are now panicking that the ECB is abandoning Mario Draghi’s pledge to do “whatever it takes”.As I flagged earlier, Lagarde’s message was that government’s need to step up -- but investors are now panicking that the ECB is abandoning Mario Draghi’s pledge to do “whatever it takes”.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, says it is a “disaster” - far worse than the ECB’s notorious interest rates hikes in 2011 as the eurozone crisis was kicking off.Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, says it is a “disaster” - far worse than the ECB’s notorious interest rates hikes in 2011 as the eurozone crisis was kicking off.
It is a major factor behind today’s rout (along with the shock of Donald Trump’s flight ban).It is a major factor behind today’s rout (along with the shock of Donald Trump’s flight ban).
Vistesen writes:Vistesen writes: