The blue-chip FTSE 100 fell 6 percent, wiping £84 billion off the value of its constituents, in early trading after the World Health Organisation upgraded the coronavirus to a worldwide pandemic. London’s stock market fell past 2016 Brexit referendum lows as US President Donald Trump’s shock decision to introduce a ban on European travellers sent shares in already hard-pressed British Airways and other airlines down by almost another 10 percent.
If it falls another 1.5 percent, the index will reach lows not seen since the height of the European debt crisis in 2012.
Within moments of the FTSE 100 opening, it sank more than 300 points, to levels not seen for eight years, with £469 billion wiped since February 21 – a fall of 25 percent.
It means the index is technically in a “bear market” where the value of shares has fallen by more than 20 percent.
By 9am, all 350 companies listed on the wider FTSE 350 were in negative territory, with shares in Cineworld slumping 32 percent, Travelex owner Finablr down 50 percent, train operator Go-Ahead down 20 percent and a whole host of oil, travel and retail businesses suffering.
The FTSE 100 has plunged amid the coronavirus pandemic
And at 12.30pm a chart from investment company Hargreaves Lansdown showed every company in the top 100 except one was down. But the only company not down, NMC, was only managing to stay at 0.0%.
Biggest losses came from Carnival plc, which operates nine cruise line brands including P&O. It owns Princess Cruises which is behind the Diamond Princess and Grand Princess ships which were stranded off Japan and California due to an outbreak of coronavirus.
Although the UK was spared from the travel restrictions introduced by President Trump, fears were widespread over its impact on the travel sector.
Shares of British Airways, EasyJet and WIZZ Air, which have already had to axe flights to and from Italy, fell between 7 and 9 percent.
Oil majors BP Plc and Royal Dutch Shell Plc slipped between 4 and 5 percent, as oil prices took another blow from the dramatic moves by Mr Trump.
The best-performing company on the FTSE 100 was Morrisons, down only 2 percent.
The falls follow similar moves around the world, with the Dow Jones in New York sinking into “bear” territory as investors reacted nervously to Mr Trump’s travel ban.
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The World Health Organisation declared the deadly outbreak a pandemic and investors fear that a lack of a co-ordinated policy response will increase the damage to the global economy.
That sparked an end to the longest bull run in US stock market history, sinking the Dow Jones Industrial Average index tipped into bear market territory.
London’s domestically focussed FTSE 250 was also down 6.1 percent.
European stock index futures also plunged to their lowest since mid-2016 as investors worried about the economic shock from dramatic travel restrictions imposed by Mr Trump.
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Euro Stoxx 50 futures were down 6.1 percent at 7am, after earlier plummeting as much as 8.3 percent. Meanwhile German DAX futures tumbled 6.0 percent.
Tracking a global selloff, Hong Kong stocks also plunged to close at a near three-year low as worries deepened over the economic impact of the coronavirus.
The Hang Seng index fell 3.7 percent, to 24,309.07, its lowest close since April 2017, while the China Enterprises Index lost 3.4 percent to 9,725.72.
Jasper Lawler, head of research at LCG, said: “The travel ban is a decisive step to prevent the spread in the US but will cripple trade between the two continents.
“Goods will still flow but presumably at reduced pace and trade in services will almost grind to a halt.”
But others were less impressed, pointing out how the mixed messages will continue to send concern.
Neil Wilson, chief market analyst, at Markets.com said: “So much for Trump’s stimulus.
“Instead of his late-night presidential address calming things, it only fanned the flames raging in markets. The president has gone from calling it a Democrat hoax to banning all travel from Europe in just 12 days.”