Coronavirus crisis wipes £100bn off UK blue chips

ALMOST £100bn has been wiped off the FTSE 100 in just two days as the number of coronavirus cases surged in Europe.

The FTSE 100 swung to a 12-month low yesterday as the first cases of the disease, known as Covid-19, were recorded in Austria, Switzerland, Croatia and mainland Spain.

It came as more deaths were recorded in Italy – taking the number there to ten – and a hotel in Tenerife was put on lockdown.

Around 80,000 people worldwide have contracted the virus, most of them in China. The death toll is now more than 2,600.

The cases across Europe sent the Footsie 1.9pc lower last night, losing 138.95 points, to close at 7017.88. That shaved £35bn off the value of the blue-chip index, adding to a £62bn drop on Monday.

The FTSE 250 followed suit, falling 1.9pc, or 401.9 points, to 20,715.97, while European indexes also dipped – with France’s Cac 40 dipping 0.9pc. In the US, the Dow Jones, S&P 500 and Nasdaq lost between 1.6pc and 1.9p.

President Donald Trump tried to shore up support by pitching it as a buying opportunity, saying that the fall was ‘starting to look very good to me!’

But analysts were unsurprised. IG’s Chris Beauchamp said: ‘The spread of the virus to Europe was always likely to be viewed as a much more worrying event than the broader outbreak in China, since the kind of draconian measures available to the Communist party will be all but impossible to implement in the EU.’

But, he added: ‘The West’s high standard of medical care will act as a powerful firebreak to any outbreaks.’ Under-fire sectors have already racked up heavier losses.

Airlines and travel groups, which will be hit by flight cancellations and recommendations not to travel, were stung, with British Airways-owner IAG falling 2.3pc, or 13.2p, to 552.8p and budget airline Easyjet shedding a further 3.5pc, or 44p, to close at 1213p.

Cruise operator Carnival, whose ship the Diamond Princess was a coronavirus hotbed, slipped another 5.9pc, or 166p, to 2639p, and package holiday provider Tui lost 4.9pc, or 37.4p, to 730.2p.

BP (down 2.2pc, or 9.55p, to 428.7p) and Royal Dutch Shell (down 2.3pc, or 41.8p, to 1780.2p) dragged as oil prices fell another 1.7pc to $55 a barrel.

And companies including midcap defence group Meggitt and McLaren car engine maker Ricardo were the latest to warn that their performance could be knocked by the virus.

Meggitt fell 5.2pc, or 30.6p, to 563.8p, as it said the production halt to Boeing’s 737 Max would also contribute to a £20m hit to profits. Ricardo plunged 8.7pc, or 66p, to 694p.

But gold prices hovered around a seven- year high, trading at around $ 1,649 an ounce, as investors flocked to the safehaven metal. Elsewhere, the bank note printer De La Rue surged after it unveiled plans for ‘extensive’ cost cuts as part of a drastic overhaul.

New chief executive Clive Vacher said that the group will aim to cut annual costs by around £35m a year – higher than a previous target of £20m – and is ready to take the plans to its lenders, HSBC, for sign-off.

Shares in the small-cap group, which prints around a third of the world’s bank notes, rocketed 20.8pc, or 25.4p, higher to 147.6p.

Oilfield services group Petrofac also climbed, rising 0.5pc, or 1.9p, to 360.4p, even though it warns revenues will fall again in 2020.

It said that revenues fell 5pc to £4.3bn last year, in a performance that Hargreaves Lansdown analysts have branded ‘no worse than expected’.