Deadly coronavirus plagues investors
MORE than £50bn was wiped off the value of Britain’s leading companies yesterday as the spread of the deadly coronavirus spooked investors.
With shares tumbling all around the world, the FTSE 100 index shed 2.3pc and the FTSE 250 fell 2pc, in a blow to savers with money tied up in the stock market through pensions and other investments.
The slump reduced the value of Britain’s 350 biggest listed companies by £52bn.
Airlines and companies exposed to China – where the outbreak began and the death toll has reached 81 – were hardest hit. Oil fell 2pc to below $60 a barrel amid fears about the impact of the disease on the Chinese economy and the rest of the world.
The losses were echoed on Wall Street where the Dow Jones Industrial Average was down 1.6pc, and in Europe with the main benchmarks in Germany, France and Italy each down more than 3pc. The sell-off followed a 2pc slide on the Nikkei 225 in Tokyo. China’s stock exchanges in Shanghai
and Shenzhen, which had been due to reopen on January 31 after the lunar new year celebrations, are scheduled to stay closed until next week.
Seema Shah, chief strategist at Principal Global Investors, said: ‘Fears around the spread of the coronavirus are being reflected – violently – in global markets.’
Airline stocks fell sharply, with British Airways owner IAG down 5.5pc in London and Air France-KLM off 5.6pc in Paris. Holiday Inn owner Intercontinental Hotels Group fell 4.9pc. Luxury goods firms that sell into
China were also hit – Burberry fell 4.8pc and LVMH was 3.7pc lower – on concerns that the coronavirus crisis will hit spending in the country. Financial firms with operations in the region – including HSBC and Prudential – were caught up in the sell-off, and mining stocks were lower amid fears of weaker demand from China for raw materials.
Andrew Milligan, head of global strategy at Aberdeen Standard Investments, said: ‘Even on the assumption that the authorities do get on top of this outbreak there will be some short-term economic shock.’