London’s stock market has plummeted amidst fears of a global recession caused by the coronavirus with £124 billion wiped off the value of the FTSE 100 blue-chip index.
A brutal day of trading was replicated around the world with global stock markets panicked by a collapsing oil price combined with fears of the impact of Covid-19.
‘Utter carnage out there’
“This will be remembered as Black Monday”, said Market.com’s chief market analyst Neil Wilson. “If you thought it couldn’t get any worse than the last fortnight, think again. The blood really is running in the streets, it’s utter carnage out there.”
The oil markets saw the “biggest one-day plunge since the Gulf War in January 1991,” reports MarketWatch, “as Russia and Saudi Arabia geared up for a global price war that threatens to flood the world with crude at the same time demand is under pressure due to the global spread of Covid-19.”
BP and Shell lost over 20% of their value this morning (Monday) as frantic early trading saw the FTSE 100 plummet 9% and the FTSE 250 fall 7% as London reacted to falls in Asian markets and the collapsing the oil price.
The oil giants closed 19% and 18% down respectively as the price of Brent crude oil crashed to $31 per barrel. Other big losers including cruise ship operators Carnival down 15% and mining companies Glencore and BHP Group losing 12% and 16% respectively.
Coronavirus and Saudi-Russian spat to blame
BBC’s economic editor Faisal Islam tweeted the falls were from the “direct and indirect effects of coronavirus, and knock on Saudi-Russian spat”.
Only one company managed to register a gain on the FTSE 100 with Polymetal – a precious metals mining group operating in Russia and Kazakhstan – up 0.58% as investors and traders rushed to buy gold which ended trading on a seven year high.
The smaller indexes – FTSE 250 and FTSE 350 – saw the same big losses with falls of 6.5% and 7.3% respectively.
“The oil price shock has totally unnerved investors, while Italy’s decision to quarantine 16 million citizens in the north of the country has left markets feeling like the coronavirus outbreak is out of control – where next? The UK is preparing for the worst.” said market analyst Wilson.