Coronavirus second wave fears take toll

Global markets plunged amid increasing fears that a second wave of coronavirus could hit major economies, with traders in the US particularly cautious.

Reports that new infections were increasing in Texas, California, and Arizona shook Wall Street and dragged already-negative markets in Europe further into the red.

The FTSE 100 closed 252.43 points lower at 6,076.7, representing its sharpest daily fall since March.

CMC Markets UK analyst David Madden said: “Equity markets have come under huge pressure as there are fears about a second wave of Covid-19 infections. In recent weeks, global equities have enjoyed a rally on the back of the news that economies were reopening, but now dealers are worried the unwinding of the restrictions might trigger a fresh round of cases. As far as the markets are concerned it is a case of two steps forward and one step backwards.”

Across the Atlantic, the Dow Jones plunged by 880 points after the bell as sentiment took a nosedive from the optimism that had driven it to a three-month high just days earlier.

Meanwhile, sterling saw its recent rally end, plunging against the dollar and euro as UK firms announced thousands of job losses. The value of the pound fell 0.95 per cent versus the US dollar at $1.262 and was down 0.92 per cent against the euro at €1.110.

Engineering and manufacturing firms were hard hit, with Melrose and Rollsroyce plunging lower once again.

Catalytic converter manufacturer Johnson Matthey sank after it told investors it is cutting 2,500 jobs following a major hit from coronavirus. The FTSE 100 firm also revealed plans to halve its dividend. Shares in the company dropped by 148p to 2,043p after it revealed it took a £60 million hit to profits from the virus.

Scottish Gas owner Centrica also lost share value after it announced plans to cut 5,000 jobs as part of a major turnaround plan. More than half of the job losses will come from the business’s leadership roles, and shares ended 1.71p lower at 40.12p.

Tui dropped after it extended the suspension of holidays for customers from the UK due to coronavirus travel restrictions. Shares fell by 41.7p to 444.6p.