Trade jitters and corona fears wipe £50bn off FTSE
ALMOST £50bn was wiped off the FTSE 100 after a toxic cocktail of coronavirus fears and rising trade tensions triggered a sell-off.
Bourses around the world slipped into the red as the World Health Organisation forecast worldwide cases could hit 10m within the next week.
In Europe, France’s Cac 40 and Germany’s Dax fell by around 3pc, while on Wall Street the Dow Jones slid 2.7pc by the closing bell.
It came as cases surged in Latin America, India and the US, where around half of its states have clocked up big increases.
The numbers in America are so alarming that the EU could bar travellers from there – as well as other countries – when the bloc reopens its borders on July 1.
Traders were also spooked by forecasts from the International Monetary Fund, which estimates global GDP will decline by 4.9pc this year – higher than the 3pc it forecast in April.
And markets were stunned by news the US might apply £2.5bn worth of tariffs to EU products, which could target everything from British beer and Scotch whisky to leather handbags and aeroplane parts.
By the close the FTSE 100 had fallen 3.1pc, or 196.43 points, to 6123.69. The mid-cap FTSE 250 index shed 2.8pc, or 501.97 points, to 17,150.83, dragged lower by a 14.9pc slump in energy services group Petrofac, which fell 32.75p, to 187.65p.
It warned that the pandemic and a plunge in oil prices have hit trading and new business, harming efforts to turn over a new leaf after reporting last year that a Serious Fraud Office corruption probe was affecting its ability to win new contracts.
The group has taken £800m of orders in the year to date, which is about 40pc lower than at the same time last year.
Mr Kipling and Oxo stock cubeowner Premier Foods was a bright spot after a leap in sales.
‘Britain has got cooking again’, according to chief executive Alex Whitehouse, who said lockdown had boosted demand for baking ingredients, Loyd Grossman cooking sauces, gravies – and Mr Kipling sweet treats.
The shares soared 14.9pc, or 8.9p, to 68.5p as it estimated firstquarter sales would rise 20pc and reported that in the year to March 28 it swung to a profit of £53.6m, from a £42.7m loss the previous year. It also reckons it will make higher profits and revenues than expected for the full year, which doesn’t end until March 2021.
The easing of restrictions could see Britons ditch the kitchen as they head back out to bars, restaurants and cinemas.
Pub chain Wetherspoon and
Everyman Media Group, which owns the Everyman cinemas, both said they planned to start reopening sites from July 4.
But they were snubbed by shareholders, with Wetherspoon down 7pc, or 79p, to 1046p and Everyman falling 1.1pc, or 1.5p, to 133.5p.
Many retailers are already back at work in some capacity. But Citigroup analysts cast a sceptical eye on several.
Brokers downgraded Dunelm (down 4.2pc, or 51p, to 1179p),
Next (down 5.7pc, or 298p, to 4900p) and B&Q owner Kingfisher (6.1pc, to 13.8p, to 213.1p) to ‘sell’, arguing recent bounces in their share prices were caused by shortterm celebrations that don’t actually reflect long-term demand.
Over on AIM, entertainment experiences group Escape Hunt fared better, rising 12.1pc, or 1p, to 9.25p after it got round the logistical challenges of lockdown by launching remote versions of some top-rated escape rooms, such as Doctor Who: Worlds Collide and The Fourth Samurai.