Fears wipe $1trillion off markets

Precious metal soars on fears of pandemic

MORE than $1trillion was wiped off the value of the world’s stock markets yesterday as fears over the spread of the virus gripped global investors.

Britain’s biggest listed companies shed £62billion as the FTSE 100 suffered its worst day in four years amid concerns that European health authorities are helpless to prevent a global pandemic.

And all of Europe’s major stock markets endured one of their worst days since the Brexit referendum in 2016, each plunging by more than 3 per cent.

The FTSE 100 fell by 3.3 per cent as investors feared internationally exposed firms could lose out on business. This was its biggest one-day slide since January 2016 when it fell by 3.46 per cent over fears of a global economic slowdown. Even the FTSE 250, which tends to be more insulated from international crisis, fell 3 per cent, wiping another £12billion off Britain’s mid-sized companies.

Richard Hunter, head of markets at investment platform Interactive Investor, said: ‘The sombre realisation that cases outside of China could represent the early stages of a pandemic, with the lockdown in Italy adding to new reported instances in Asia and Korea, have not only ignited fears on the human level, but also that the economic impact could be more severe than initially envisaged.’

It follows a string of warnings from big businesses already unsettled by coronavirus. Jaguar Land Rover said it was having to fly components out of China in suitcases last week as factory shutdowns caused supply chains to reach a standstill and the carmaker admitted it may not have enough parts to sustain production beyond March.

Kettle-producer Strix Group, which has factories in the Chinese city of Guangzhou, said only two-thirds of its workforce had returned following the extended lunar New Year holiday earlier this month. Luxury retailers including Burberry warned reduced demand in core market China will batter their sales. Meanwhile travel firms have been shunned by investors, with British Airways owner IAG shares down 9.1 per cent yesterday.

EasyJet was down 16.7 per cent and Ryanair plunged 13.5 per cent.

As investors flogged shares, the price of gold hit an all-time record high in sterling terms yesterday of more than £1,300 per ounce.

PANICKED investors have pushed gold to an all-time high in sterling terms as they scrambled to protect their savings from the coronavirus contagion.

European stock markets were in turmoil yesterday as a flare-up of the deadly Covid-19 virus in Italy claimed six more lives.

Investors were quick to drop travel firms and miners, amid fears that the outbreak would deter travel and stymie industrial activity, and rushed to the relative safety of gold.

the precious metal, which is seen as a safe haven in times of uncertainty, hit a record £1,300 per ounce before settling later in the day at £1,293.

In dollar terms, it jumped to a sevenyear high of $1,677.21 per ounce.

But the flood of money out of equities wiped almost £361bn off the value of Europe’s listed companies.

the FtSE 100 index of Britain’s biggest listed companies accounted for £62bn of those losses.

And the price of oil plummeted as traders began to worry that the economic effect of the coronavirus would be worse than originally anticipated.

Brent crude was trading down 5.3pc at $55.42 per barrel, well below the $69 level at the turn of the New Year.

Florian hense, an economist at broker Berenberg, said: ‘we still have to brace for worse news in the next few months linked to the outbreak of the coronavirus and its spreading beyond China.

‘Lower demand for travel and tourism is already harming services activity.

‘ Manufacturers may face increasing supply chain disruptions in the weeks to come.

‘the surge in cases in Italy presents a risk to the European economic outlook. the potential lockdown of bigger parts of the highly industrialised region accentuates the downside risks for Italy’s neighbours, too.

‘ Germany, Switzerland and Austria all have close links to northern Italy’s manufacturing hubs.’ the FtSE 100 slid by 3.3pc or 247.09 points to 7156.83, in its worst day in four years. travel companies took a thrashing, with Easyjet being the biggest faller, tumbling by 16.7pc, or 251.5p, to 1257p.

tui was close behind, shedding 9.8pc, or 83.4p, to 767.6p. And British Airways owner IAG lost 9.2pc, or 57p, closing at 566p. Primark’s owner Associated

British Foods warned several of its food factories were operating at reduced capacity due to labour constraints. And it said it could run out of some clothing lines if factory delays were prolonged. Its shares slipped 1.6pc, or 40p, to 2543p.

Across the rest of Europe, Germany’s Dax, France’s CAC and Italy’s FtSE MIB indices were all down between 4pc and 5.4pc.

And the US was not immune, as the S&P 500 slid 3.4pc.

But American billionaire warren Buffet, who has been dubbed the Sage of Omaha for his investing prowess, advised investors to be cautious of selling on impulse.

he said the coronavirus was ‘ scary stuff ’, but added that most investors should keep a long-term outlook.

Gold hits record high of £1,300

Oil prices slump 5pc

£62billion wiped off the FTSE 100

Tui down 9.8pc

EasyJet down 16.7pc

Milan stock market down 5.4pc