£100bn is wiped off FTSE as fears over virus grow

Travel firm stocks among biggest losers

LONDON’S TOP flight index has dropped by nearly £100bn in just 48 hours as fears over the spread of coronavirus extended a brutal share sell-off.

An earlier pause for breath on European indices proved shortlived, with London’s FTSE 100 Index soon joining its counterparts on the Continent in diving lower once more.

The UK’s blue chip index quickly reversed early gains to close the day 138.95 points or 1.9 per cent lower at 7017.88, having dived 3.3 per cent on Monday in its biggest one-day fall in more than four years.

More than £62bn was wiped off the value of Britain’s top share index in the previous session after news of the first major outbreak of coronavirus in Europe, with Italy suffering hundreds of cases.

It lost another £35bn yesterday, bringing the total to around £97bn so far this week.

Across Europe, the Dax in Germany fell 1.8 per cent and France’s Cac 40 was two per cent lower, having both fallen four per cent on Monday. Michael Hewson, chief market analyst at CMC Markets, warned there was likely to be further shares pain to come as the coronavirus outbreak develops.

He said: “There is no question financial markets are coming round to the realisation that this particular crisis is likely to have

a slightly longer shelf life than many thought was the case a couple of weeks ago.

“There appears little prospect that financial markets look likely to settle down in the short term, which means investors will have to get used to an extended period of uncertainty and volatility,” he added. Travel stocks and airlines were among the biggest losers in London, following steep declines in Monday’s market falls.

Holiday giant TUI and low-cost carrier easyJet fell another 4.9 per cent and 3.5 per cent respectively, while Holiday Inn owner Intercontinental Hotels Group was 3.2 per cent down.

British Airways owner International Airlines Group was nearly 2.3 per cent lower after falling more than 9 per cent on Monday.

Meanwhile, a British holidaymaker told to stay inside a Tenerife hotel has said she is having a “holiday from hell” after an Italian doctor there was diagnosed with coronavirus.

Guests at the four-star H10 Costa Adeje Palace in the south west of the island have been sent a letter saying the hotel is “closed down” and they must remain in their rooms.

Travel firms Tui and Leedsbased Jet2holidays are among those who use the hotel. Hannah Green, 27, from Hertfordshire, arrived with her boyfriend, Court Amys, and their one-year-old son. She said communication had been “non-existent”.

A spokesman for Jet2 said: “Under the advice of the regional and the Spanish government authorities, the hotel has been placed under quarantine.”

A statement from the hotel said it has “implemented all health and operational recommendations from the health authorities”.

Markets are realising that this crisis is likely to have a longer shelf life.

Michael Hewson, chief market analyst at CMC Markets.