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Wall Street plunges as Covid-19 global recession fears haunt markets - business live FTSE 100 closes at eight-year low as Covid-19 global recession fears haunt markets - business live
(32 minutes later)
Rolling coverage of the latest economic and financial news, as shares fall sharply again in Asia and EuropeRolling coverage of the latest economic and financial news, as shares fall sharply again in Asia and Europe
By my maths, almost £54bn was knocked off the FTSE 100 index today.
That’s merely a flesh wound, compared to some of the worse days in recent weeks. But it’s yet another blow to pension-savers, ISAs and th
It takes the FTSE 100’s total losses over the coronavirus rout (which began just over three weeks ago) to around £565bn, I reckon.
Newsflash: Britain’s FTSE 100 index has closed at its lowest level in eight years, after another wild day of trading.
The Footsie has ended the day down 215 points, or 4%, at 5151 -- the weakest close since November 2011.
British Airways’ parent company, IAG, was the top faller (-27%), with easyJet (-19%) close behind.
Both easyJet and IAG warned this morning that they are grounding large swathes of their fleet for the next couple of months, which will have a serious impact on revenues.
Banks and financial stocks have also sunk - Barclays lost 13%, Prudential lost 12%, while asset manager M&G has shed 25% of its value.
Clearly the latest central bank interventions last night, led by the US Federal Reserve, has not provided much support.
However... the FTSE 100 was 8% lower earlier today when Wall Street opened with another almighty bump. So there was a small recovery by the close (but traders won’t be cheering...)
Vauxhall’s major UK manufacturing facilities are to close until March 27 as part of a Europe-wide shutdown by owner PSA Group due to coronavirus.Vauxhall’s major UK manufacturing facilities are to close until March 27 as part of a Europe-wide shutdown by owner PSA Group due to coronavirus.
Carmakers including Fiat Chrysler, Peugeot, Volkswagen and its premium unit Audi are reducing production at their European plants as they grapple with the Coronavirus.Carmakers including Fiat Chrysler, Peugeot, Volkswagen and its premium unit Audi are reducing production at their European plants as they grapple with the Coronavirus.
Like factories in the UK they do not have clarity on social-distancing rules in the workplace.Like factories in the UK they do not have clarity on social-distancing rules in the workplace.
Audi said workers have downed tools over concerns about exposure to the virus while Fiat Chrysler said it was halting production for two weeks to help protect staff and adjust to decline in demand.Audi said workers have downed tools over concerns about exposure to the virus while Fiat Chrysler said it was halting production for two weeks to help protect staff and adjust to decline in demand.
French carmaker PSA, which owns the Peugeot, Opel and Vauxhall brands, also said it was closing its European factories until March 27.French carmaker PSA, which owns the Peugeot, Opel and Vauxhall brands, also said it was closing its European factories until March 27.
Ford said it was closing its plant in Valencia, Spain, for the rest of this week following a flurry of infections, and would reassess after talks with trade unions.Ford said it was closing its plant in Valencia, Spain, for the rest of this week following a flurry of infections, and would reassess after talks with trade unions.
A spokeswoman said on Monday:A spokeswoman said on Monday:
Ford employees who had close contact with the affected workers are now in self-isolation. Ford adds:Ford employees who had close contact with the affected workers are now in self-isolation. Ford adds:
Last week, some Spanish plants of the Renault-Nissan alliance and Volkswagen’s Spanish division Seat announced temporary stoppages that could last for days or weeks.Last week, some Spanish plants of the Renault-Nissan alliance and Volkswagen’s Spanish division Seat announced temporary stoppages that could last for days or weeks.
On Monday, Volkswagen’s Autoeuropa car assembly plant near Lisbon, Portugal, said it had reduced its daily output by 16% because of a shortage of workers after Portugal ordered all schools closed amid the coronavirus outbreak.On Monday, Volkswagen’s Autoeuropa car assembly plant near Lisbon, Portugal, said it had reduced its daily output by 16% because of a shortage of workers after Portugal ordered all schools closed amid the coronavirus outbreak.
Volkswagen also said on Sunday it was preparing to suspend operations at its plant in Bratislava after Slovakia declared a state of emergency in response to the virus.Volkswagen also said on Sunday it was preparing to suspend operations at its plant in Bratislava after Slovakia declared a state of emergency in response to the virus.
Another UK travel insurer has boarded itself up -- this time, the Post Office.Another UK travel insurer has boarded itself up -- this time, the Post Office.
It’s one of the biggest suppliers of travel insurance policies in the UK. But, faced with the coronavirus crisis, and widespread flight cancellations, the Post Office has suspended its offerings - both online and in branches.It’s one of the biggest suppliers of travel insurance policies in the UK. But, faced with the coronavirus crisis, and widespread flight cancellations, the Post Office has suspended its offerings - both online and in branches.
It says:It says:
The markets might calm down if they had more idea about how bad the Covid-19 epidemic is, argues Robin Brooks of finance industry body IIF.The markets might calm down if they had more idea about how bad the Covid-19 epidemic is, argues Robin Brooks of finance industry body IIF.
Testing levels are varying between countries, with the US in particular lagging behind.Testing levels are varying between countries, with the US in particular lagging behind.
The smaller FTSE 250 index of UK-focused companies is also clawing its way back.The smaller FTSE 250 index of UK-focused companies is also clawing its way back.
It’s still looking weak - down almost 7% today, as pub chains, bookies, food groups and travel operators are pummelled. But at least it’s better than the 12% slump we saw this morning.It’s still looking weak - down almost 7% today, as pub chains, bookies, food groups and travel operators are pummelled. But at least it’s better than the 12% slump we saw this morning.
In another example of how Covid-19 is shaking Europe, the EU is now proposing suspending all non-essential travel for 30 days.In another example of how Covid-19 is shaking Europe, the EU is now proposing suspending all non-essential travel for 30 days.
Ursula von der Leyen, the president of the EU commission, tweeted the news.Ursula von der Leyen, the president of the EU commission, tweeted the news.
Our main coronavirus liveblog has more details.Our main coronavirus liveblog has more details.
Just in: bookmaker William Hill has suspended its dividend payments to shareholders, following the mass cancellation of sporting events.Just in: bookmaker William Hill has suspended its dividend payments to shareholders, following the mass cancellation of sporting events.
The conavirus crisis has ripped through the sporting world, stripping out most opportunities for punters to wager their money (and often lose it, in my personal experience),The conavirus crisis has ripped through the sporting world, stripping out most opportunities for punters to wager their money (and often lose it, in my personal experience),
With professional football in England on hold, along with leagues in Germany and France -- and even Euro 2020 under threat -- William Hill sees a major impact on its revenues and profits.With professional football in England on hold, along with leagues in Germany and France -- and even Euro 2020 under threat -- William Hill sees a major impact on its revenues and profits.
It says:It says:
In a surprise development, a few shares are actually rising on the London exchange.In a surprise development, a few shares are actually rising on the London exchange.
These plucky stocks include steel and mining group Evraz (+6%), supermarket chain Sainsbury (+2.7%), and software firm Sage Group (+2%).These plucky stocks include steel and mining group Evraz (+6%), supermarket chain Sainsbury (+2.7%), and software firm Sage Group (+2%).
They’re hugely outnumbered by the fallers, of course - with airlines IAG and easyJet still down at least 20%, and the housebuilders shedding around 15%.They’re hugely outnumbered by the fallers, of course - with airlines IAG and easyJet still down at least 20%, and the housebuilders shedding around 15%.
But it’s helping to pull the FTSE 100 up from the abyss, to around 5,095 points -- which would still be an eight-year closing low.But it’s helping to pull the FTSE 100 up from the abyss, to around 5,095 points -- which would still be an eight-year closing low.
European finance ministers are facing calls to agree an EU-wide stimulus package to help European economies cope with the fallout of the coronavirus crisis, my colleague Jennifer Rankin reports from Brussels.European finance ministers are facing calls to agree an EU-wide stimulus package to help European economies cope with the fallout of the coronavirus crisis, my colleague Jennifer Rankin reports from Brussels.
The EU’s 27 finance ministers are due to start talks via video link imminently, after the usual monthly eurozone meeting was expanded to include the eight EU non-euro countries. Face-to-face talks in Brussels were moved online, after increasing numbers of countries introduced policies to discourage travel.The EU’s 27 finance ministers are due to start talks via video link imminently, after the usual monthly eurozone meeting was expanded to include the eight EU non-euro countries. Face-to-face talks in Brussels were moved online, after increasing numbers of countries introduced policies to discourage travel.
Mário Centeno, the Portuguese minister chairing the meeting, said containing the virus was “bringing our economies to warlike times”.Mário Centeno, the Portuguese minister chairing the meeting, said containing the virus was “bringing our economies to warlike times”.
In a video message ahead of the meeting, he promised the group would agree liquidity support to firms, especially small and medium-sized enterprises, as well as full flexibility on EU fiscal and state aid rules to allow governments to help ailing firms and out-of-work employees.In a video message ahead of the meeting, he promised the group would agree liquidity support to firms, especially small and medium-sized enterprises, as well as full flexibility on EU fiscal and state aid rules to allow governments to help ailing firms and out-of-work employees.
These measures were outlined by the European commission on Friday and are expected to be backed by ministers without any difficulty.These measures were outlined by the European commission on Friday and are expected to be backed by ministers without any difficulty.
Centeno said:Centeno said:
But the ministers are facing calls to go much further, such as developing an EU-wide stimulus package and making available an EU credit line to indebted countries.But the ministers are facing calls to go much further, such as developing an EU-wide stimulus package and making available an EU credit line to indebted countries.
In an open letter, Socialist and Democrat MEPs, the second-largest group in the European parliament, call for “a proper stimulus package agreed at the European level”, financed by the European Stability Mechanism, the eurozone bailout fund.In an open letter, Socialist and Democrat MEPs, the second-largest group in the European parliament, call for “a proper stimulus package agreed at the European level”, financed by the European Stability Mechanism, the eurozone bailout fund.
Green MEPs have delivered a similar message, but put emphasis on accelerating the European Green Deal, a sweeping plan to transform Europe’s economy to drastically reduce emissions.Green MEPs have delivered a similar message, but put emphasis on accelerating the European Green Deal, a sweeping plan to transform Europe’s economy to drastically reduce emissions.
They write:They write:
Both groups want an EU-backed credit line for indebted countries, intended to prevent markets betting against countries such as Italy will be forced to borrow more to deal with the crisis.Both groups want an EU-backed credit line for indebted countries, intended to prevent markets betting against countries such as Italy will be forced to borrow more to deal with the crisis.
But not everyone is convinced now is the time for a general stimulus package.But not everyone is convinced now is the time for a general stimulus package.
Clemens Fuest, president of the ifo institut and adviser to the German government, told the Observer that encouraging social consumption makes “no sense” when people are being discouraged from going to bars and restaurants.Clemens Fuest, president of the ifo institut and adviser to the German government, told the Observer that encouraging social consumption makes “no sense” when people are being discouraged from going to bars and restaurants.
He said eurozone ministers should issue “a general signal of solidarity” i.e a statement of support to indebted countries, rather than a precautionary credit line.He said eurozone ministers should issue “a general signal of solidarity” i.e a statement of support to indebted countries, rather than a precautionary credit line.
The Dow Jones industrial average has now slumped to its lowest since spring 2017.The Dow Jones industrial average has now slumped to its lowest since spring 2017.
Having almost hit 30,000 points in February, it has now shed roughly 30% of its value in the last month -- down to around 21,000.Having almost hit 30,000 points in February, it has now shed roughly 30% of its value in the last month -- down to around 21,000.
This means that much of the gains racked up under Donald Trump (and boasted about by the president) have been wiped out by Covid-19:This means that much of the gains racked up under Donald Trump (and boasted about by the president) have been wiped out by Covid-19:
The markets have completely lost faith in the idea that the global economy could bounce back from the shock of Covid-19.The markets have completely lost faith in the idea that the global economy could bounce back from the shock of Covid-19.
Instead, they seem to be pricing in a slump - followed by stagnation. Or an L-shaped recovery, not a V-shaped one.Instead, they seem to be pricing in a slump - followed by stagnation. Or an L-shaped recovery, not a V-shaped one.
Neil Mackinnon, global macro strategist at VTB Capital, explains:Neil Mackinnon, global macro strategist at VTB Capital, explains:
The coronavirus has now reached the Basel headquarters of the Bank of International Settlements:The coronavirus has now reached the Basel headquarters of the Bank of International Settlements:
Today’s Wall Street slump shows comprehensively that the US Federal Reserve has failed to calm the markets, with its surprise interest rate cut last night.Today’s Wall Street slump shows comprehensively that the US Federal Reserve has failed to calm the markets, with its surprise interest rate cut last night.
The Fed had hoped to tackle the tensions in the markets by cutting rates to near zero, pledging to buy $700bn of assets, and easing banks’s reserve requirements.The Fed had hoped to tackle the tensions in the markets by cutting rates to near zero, pledging to buy $700bn of assets, and easing banks’s reserve requirements.
Teaming up with the central banks fo the UK, Japan, Switzerland, Canada and the eurozone to make dollars more cheaply available was also meant to ease liquidity in the markets.Teaming up with the central banks fo the UK, Japan, Switzerland, Canada and the eurozone to make dollars more cheaply available was also meant to ease liquidity in the markets.
But Wall Street, like other international markets, is unimpressed.But Wall Street, like other international markets, is unimpressed.
Neil Wilson of Markets.com explains:Neil Wilson of Markets.com explains:
Can world leaders stop the panic in the markets, and ward off a global downturn?Can world leaders stop the panic in the markets, and ward off a global downturn?
We’ll find out later today, after they hold an emergency call -- or video summit -- to discuss the crisis.We’ll find out later today, after they hold an emergency call -- or video summit -- to discuss the crisis.
The recent share plunges shows that the markets are screaming out for joint action to prop up the economy. Such a plan would need to save once-healthy firms now facing a cash flow crisis and help people who are laid off as demand slumps.The recent share plunges shows that the markets are screaming out for joint action to prop up the economy. Such a plan would need to save once-healthy firms now facing a cash flow crisis and help people who are laid off as demand slumps.
It’s a broad-based rout on Wall Street today.It’s a broad-based rout on Wall Street today.
Every stock on the Dow is in the red.Every stock on the Dow is in the red.
Aircraft maker Boeing has slumped by a fifth - demand for its jets will be badly hit as airlines suspend flights and ground their jets.Aircraft maker Boeing has slumped by a fifth - demand for its jets will be badly hit as airlines suspend flights and ground their jets.
Credit card operator American Express is off 16.5%, on the prospect of a slump in US consumer spending.Credit card operator American Express is off 16.5%, on the prospect of a slump in US consumer spending.
Newsflash: Trading has resumed on Wall Street, and stocks are rocketing lower:Newsflash: Trading has resumed on Wall Street, and stocks are rocketing lower:
The Dow Jones has slumped by 2,798 points - or 12.07% - to 20,387.The Dow Jones has slumped by 2,798 points - or 12.07% - to 20,387.
The broader S&P Index tumbled by over 10.5% - losing 286 points to 2,425.The broader S&P Index tumbled by over 10.5% - losing 286 points to 2,425.
This more than wipes out Friday’s late rally -- which was triggered when Donald Trump announced he was declaring a state of emergency over the coronavirus.This more than wipes out Friday’s late rally -- which was triggered when Donald Trump announced he was declaring a state of emergency over the coronavirus.