Share prices have fallen by £110bn since New Year
MORE than £110billion has been wiped off the value of Britain’s leading companies since the start of the year as worries over the global economy intensify.
Yesterday was another bruising day for savers with pensions and investments linked to the stock market as the FTSE 100 index fell 1.9 per cent to 5804.10, its lowest since November 2012.
The sell-off – after a sharp drop on the Chinese stock market and a fresh slump in oil prices to a 12-year low below $29 a barrel – took losses for the year to 7 per cent, or up to £113billion.
Sterling fell below US $1.43 for the first time since May 2010, pushing up the cost of holidays in the United States for British families, amid signs the recovery in the UK is faltering. The pound also dropped to an 11-month low against the single currency of €1.30. It was the eighth week in a row that sterling has fallen against the euro – the worst run in five years.
Shares in London and the pound have tumbled in recent weeks amid fears the economy is slowing in the face of turmoil in China and emerging markets. More than £4trillion has been wiped off the value of global stock markets since New Year as shares across Asia, Europe and the Americas tumble.
John Plassard, senior equity sales trader at Mirabaud Securities in Geneva, said sentiment among investors has gone ‘from bad to terrible’.
Analysts at Royal Bank of Scotland this week warned of a ‘cataclysmic year’ and urged investors to ‘sell mostly everything’.
Rival banking group Standard Chartered said the price of oil could reach $10 a barrel.
‘It’s been another immensely volatile week,’ said Philip Shaw, chief economist at banking group Investec in London.
Last month the first US interest rate rise in nearly a decade also rattled investors. And the Federal Reserve is expected to make further increases.
‘It’s been a brutal start to the year,’ said Ben Laidler, a global equity strategist at HSBC. ‘People are worried about China and a Fed policy mistake, and one is feeding the other.’