Stocks hit by another wave of panic selling

GLOBAL stock markets slammed into reverse yesterday as fears over the spread of the coronavirus sparked fresh panic selling.

on the day that the first Covid-19 death was confirmed in the UK, the FTSE 100 index fell 1.6pc, or 110.16 points, to 6705.43 and the FTSE 250 index was down 2.1pc.

the sell-off wiped £35bn off the value of Britain’s leading 350 companies, taking losses since the start of last week to £220bn. the latest rout was echoed around the world with the German benchmark down 1.5pc, Italy off 1.8pc, France 1.9pc lower and Spain down 2.6pc.

on Wall Street, the Dow Jones Industrial Average fell 970 points having gained 1173 in the previous session.

the swings came as investors grappled with the potential impact of the outbreak.

Central banks and governments have pledged to step in, with the US Federal reserve and Bank of Canada cutting interest rates while the International Monetary Fund has set up a £39bn fighting fund.

David Madden, analyst at CMC Markets, said: ‘traders are running for the hills. even though governments and international bodies have pledged huge sums to combat the health crisis, dealers are still scared. It is as if the more money is thrown at it, the more nervous dealers become. Intervention acts as an indication of weakness.’

uS markets swung sharply higher on

Wednesday after the strong performance of former vice-president Joe Biden in the Democratic nomination campaign and the uS approved £6.4bn to combat the virus.

But the rising number of cases, and deaths, outside China changed the mood.

David Kelly, chief global strategist at JP Morgan Asset Management, said: ‘I thought 2020 would be the year of the election but it turns out it’s the year of the virus, and it’s going to dominate everything in the global economy this year.’