FTSE 100 falls sharply once more bringing end to three days of gains

STOCK markets fell sharply again yesterday, putting an end to this week’s three-day surge that suggested the slump caused by the pandemic had bottomed out.

In London, the FTSE 100 closed down more than 5pc, while Wall Street indices also fell after the US overtook China as the country with the most confirmed cases of Covid-19 with more than 100,000 cases.

The Dow Jones and S&P 500 traded around 2pc down, having climbed more than 20pc in the previous three days, a short-lived bull market fuelled by progress on US stimulus measures.

The drop was seen as a result of some profit taking after this week’s gains, but also illustrated continued nerves about the economic fallout from the virus, and concerns about governments’ abilities to combat it.

The Vix, a measure of stock market volatility often referred to as the “fear gauge”, climbed sharply.

The FTSE’S drop was partly linked to a rise in the pound’s value against the dollar yesterday, with companies that make most of their profits abroad falling. Another slump in the oil price due to fears over global demand weighed on listed energy giants.

Markets have been propelled this week by hopes that a $2 trillion (£1.6trillion) rescue plan from the US, which will massively increase loans to businesses, boost unemployment benefits and top up Americans’ bank accounts with up to $1,200, would help it weather the crisis.

The bill was approved by the US House of Representatives yesterday evening, and will now be signed into law by Donald Trump.