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FTSE 100 closes at eight-year low as Covid-19 global recession fears haunt markets - business live G7 leaders pledge to act together to fight Covid-19, but markets still slide - business live
(30 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
Samual Tombs of Pantheon Economics data has been analysing online search data, and spotted signs that the UK economy is being hurt very badly by response to the Covid-19 outbreak continued to emerge yesterday. A review of UK company rules has opened the door for a raft of AGMs being delayed due to the coronavirus outbreak.
He writes: It’s an important step that could safeguard the health of hundreds of shareholders, including elderly investors, as the UK government said it would no longer support mass gatherings.
The business department has backed fresh guidance from the ICSA – known as the governance institute – which said this afternoon that companies have five options:
Hold the AGM as planned, with appropriate modifications.
Delay convening the AGM, if notice has not yet been issued.
Postpone the AGM, if permitted under the articles of association (Articles).
Adjourn the AGM
Conduct a hybrid AGM, if permitted under the articles
The guidance was provided with legal advice from law firm Slaughter and May, and has also been backed by other groups including accounting regulator the Financial Reporting Council, GC100, the Investment Association and the Quoted Companies Alliance.
But we’re expecting further updates tomorrow from the ICSA on this issue tomorrow, to reflect the government’s new guidance....
The leaders of the world’s biggest economies have pledged to work more closely together to tackle the coronavirus crisis.
Following their conference call today, G7 leaders have agreed to marshal “the full power of our governments” address Covid-19, which they say is “a major risk” for the world economy.
But there doesn’t seem to be a major new commitment, with a price tag attached, that might reassure the market.
The leaders of the US, UK, Canada, Germany, France, Italy and Japan have all agreed a four-point plan:
Coordinate on necessary public health measures to protect people at risk from COVID-19;
Restore confidence, growth, and protect jobs;
Support global trade and investment;
Encourage science, research, and technology cooperation.
The G7 leaders say:
The statement also contains a clear pledge to support companies and workers across the G7:
Over in Westminster, British PM Boris Johnson has talked up the prospect of an economic bounce back, once the coronavirus outbreak has been curbed.Over in Westminster, British PM Boris Johnson has talked up the prospect of an economic bounce back, once the coronavirus outbreak has been curbed.
He told a press conference on Covid-19 that:He told a press conference on Covid-19 that:
However, Johnson also warned people to avoid going out to places like pubs, clubs and theatres. If one member of a family shows symptoms of the coronavirus, they must all self-isolate for two weeks.However, Johnson also warned people to avoid going out to places like pubs, clubs and theatres. If one member of a family shows symptoms of the coronavirus, they must all self-isolate for two weeks.
That will all have a severe impact on workers, and the wider economy.That will all have a severe impact on workers, and the wider economy.
Especially as chief medical officer Chris Whitty warns that tackling Covid-19 will take “quite a number of weeks”.Especially as chief medical officer Chris Whitty warns that tackling Covid-19 will take “quite a number of weeks”.
European stock markets also had another torrid day, falling to their lowest point since 2013.European stock markets also had another torrid day, falling to their lowest point since 2013.
The Stoxx 600 has dropped by 4.8% to close at 284 points. Banks, consumer cyclical firms, energy companies, and industrial groups led the slide.The Stoxx 600 has dropped by 4.8% to close at 284 points. Banks, consumer cyclical firms, energy companies, and industrial groups led the slide.
The FTSE 100 has now lost roughly a third of its value in the last two months.The FTSE 100 has now lost roughly a third of its value in the last two months.
That’s an astonishing slump, as the coronavirus has moved from a local problem in Wuhan, to a blow to China’s manufacturing sector, to a massive shock to world demand and supply.That’s an astonishing slump, as the coronavirus has moved from a local problem in Wuhan, to a blow to China’s manufacturing sector, to a massive shock to world demand and supply.
By my maths, almost £54bn was knocked off the FTSE 100 index today.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 other funds.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 other funds.
It takes the FTSE 100’s total losses over the coronavirus rout (which began just over three weeks ago) to around £565bn, I reckon.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.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.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.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.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.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.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...)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.