Over £60bn knocked off FTSE amid virus panic
Blue-chips suffer steepest drop since 2015 Thousands of London workers sent home Europe’s top airline pulls half of its flights
MORE than £60bn was wiped off Britain’s blue-chip companies in a fresh day of mayhem on trading floors as the coronavirus outbreak threatened to bring normal life to a halt.
Thousands of central London tech employees at Facebook and other firms were told to work from home over fears that the disease could spread across the capital, while Europe’s largest airline, Lufthansa, announced it was cancelling up to 50pc of flights.
The chaos sent the FTSE 100 plunging 3.62pc, its biggest fall since August 2015 and the fourth drop of more than 3pc in a fortnight as investors gave in to panic. Meanwhile, oil prices slumped nearly 10pc and bond yields dropped again as investors scrambled to park their money in safe government debt.
Markets in France, Germany, Spain and Italy all closed down sharply as cases climbed across Europe. In America, investors largely ignored a report showing bumper jobs growth to focus on the potential chaos ahead.
Wall Street’s “fear gauge” – the CBOE Vix Index that measures volatility – hit an 11-year high as markets whipsawed on fears that global growth would stall through a simultaneous shock to global supply and demand. US stocks pared losses in late trade, however, with the Dow Jones closing down 1pc.
The FTSE 100 has slumped 12.5pc in the past fortnight and stands at its lowest level since July 2016.
Johan Javeus, an analyst at Swedish bank SEB, said: “Fears that the coronavirus will push the global economy into a new recession are rising.” There are growing signs that major businesses are being paralysed by the outbreak in Britain. Facebook announced yesterday that it would be closing three of its offices in London after a worker was diagnosed with Covid-19.
Facebook said it was “closing our London offices until Monday for deep cleaning and employees are working from home until then”.
In Shoreditch, workers were sent home from start-up centre Techhub after a worker showed symptoms.
The latest closures came just a day after more than a thousand workers in Canary Wharf were evacuated from their offices or told to work from home by S&P Global and HSBC.
Earlier this week, Flybe, the regional carrier, was the first major British firm to go bust due to the crisis. Economic data from China has already shown a collapse in factory activity there when the epidemic took hold last month.
The Opec cartel of oil producing nations and Russia failed to agree cuts to production at a meeting in Vienna yesterday, sending Brent crude down by 9.4pc to $45.27 a barrel.
Global bond yields, which fall as demand rises, plumbed new lows as investors continued to flock to safe-haven assets. The benchmark yield on US fiveyear Treasuries dipped below 0.5pc, while two, five and 10-year UK government bonds inched closer to zero.