Tide of fear engulfs FTSE on Red Friday
But investors should stay calm amid virus panic, say experts
TRAVEL stocks were hammered as fears about a new Covid variant wiped £72bn off the FTsE100 and rocked global markets.
British airways-owner IaG was the worst hit in a brutal day traders dubbed ‘Red Friday’ after the Omicron strain of the virus was identified in south africa and Belgium.
Companies in many industries lost ground – but airlines and holiday firms were left smarting as investors worried that widespread travel restrictions could come into force and kibosh their nascent recovery.
The UK and EU have already moved to introduce restrictions for travellers coming from south africa, Botswana and several other african countries.
The Footsie fell by 3.6pc in the index’s worst day since June 2020, as traders also fretted that in a worst-case scenario the UK could be plunged into a winter lockdown. The blue-chip index closed down 3.6pc, or 266.34 points, at 7044.03, mirroring similar falls in European indexes, while the FTsE 250 dropped 3.2pc, or 742.07 points, to 22537.89. Oil prices also plunged 11pc to around $74 a barrel. But despite the panic on the market, analysts urged retail shareholders to hold firm and avoid selling off any of their investments based on Friday’s plunge.
Russ Mould, investment director at aJ Bell, said: ‘selling when things look at their blackest is not the right thing to do.’
Michael hewson, chief market analyst at CMC Markets UK, said: ‘You invest for the long term, not on one-day moves.’
Wall street indexes the Dow Jones and s&P also fell into the red last night, though hewson added that these moves could have been exaggerated by the fact that the Us only had a half day of trading following Thanksgiving on Thursday.
This means that fewer shares overall were traded yesterday and may not be a fully accurate picture of the stock market.
On the London stock Exchange, which had a normal day of trading, IaG sank by 14.9pc, while Easyjet tumbled 11.5pc and holiday group Tui by 10.5pc.
stocks related to the travel industry also made steep losses with Upper Crust-owner ssP plunging 15.7pc and Wh smith, which makes a large chunk of its money from train station and airport branches, fell 14.3pc.
heavy industry groups that work in the aerospace industry were also down. Melrose dropped 10.3pc, while engine-maker RollsRoyce fell 11.6pc.
Joshua Mahony, senior market analyst at IG, said: ‘Understandably, travel stocks have been at the forefront of this sell-off. however, market losses have been widespread, with the prospect of future restrictions bringing caution for most of the so-called reopening stocks.’