Investments  

FTSE on track for biggest fall in 30 years after 9% drop

FTSE on track for biggest fall in 30 years after 9% drop

UK shares are facing their third biggest daily fall as governments have announced travel bans and lockdowns to curb the coronavirus, causing share prices to tumble.

The FTSE 100 has fallen 9 per cent since markets opened this morning (March 12) — worse than any single day in 2008 and beaten only by the record figures of 1987’s ‘Black Monday’.

Other market indices have also slumped. As of mid-afternoon, Euro Stoxx 50 had dropped 10 per cent — its worst day since August 2011 when the eurozone debt crisis peaked — while Wall Street was suspended automatically when it opened as S&P 500 shares had plunged 7 per cent, breaking the threshold at which the so-called circuit breaker is triggered.

Biggest FTSE 100 falls
DateDaily drop
20/10/1987-12.22%
19/10/1987-10.84%
Today: 12/03/2020-9.30%
10/10/2008-8.85%
06/10/2008-7.85%

Travel and tourism companies were among the worst affected within the FTSE 100. 

Multinational travel and tourism company TUI Group is down 20 per cent today, while Carnival (a British-American cruise operator and one of the world’s largest travel leisure companies) has seen 17 per cent knocked off its share price.

The drops came after US President Donald Trump announced a near-EU-wide travel ban late last night, Italy is to close all shops except supermarkets and pharmacies and Ireland goes into lockdown.

Closer to home, the UK is also expected to move from its ‘containment’ phase to its ‘delay’ phase as the number of those diagnosed with the virus ramps up.

Not a single FTSE 100 stock has risen today. Other sharp fallers include market-sensitive financials firms such as Prudential, Standard Life Aberdeen and Legal & General.

Stock markets have been dropping across the globe since the coronavirus started to become a major issue last month. Since February 1, 19 per cent has been wiped off the FTSE 100.

The FTSE also took a hit on Monday (March 9) and dropped 8 per cent when oil prices tanked by almost a third after Russia broke its partnership with Opec, prompting Saudi Arabia to launch an aggressive price war targeting the rival producer.

Ben Yearsley, investment consultant at Fairview Investing, said: “[The FTSE’s fall] is a chain reaction to various government initiatives to stem the spread of coronavirus. 

“Markets are taking an extremely pessimistic view of the financial impact of various shutdowns and travel bans imposed.”

But Mr Yearsley added the huge levels of volatility would persist until markets believe the peak of coronavirus has passed, adding that China’s market had returned to normal as calm was restored.

The Shanghai Stock Exchange is down just 2.2 per cent since the end of December, when the coronavirus was first discovered in the Chinese city of Wuhan.

imogen.tew@ft.com

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