London Stock Exchange has closed with heavy losses as the scale of the Covid-19 pandemic took its toll on virtually every sector.
A weeks-long market rout showed no signs of slowing on Monday as London’s top-flight companies saw another £54 billion wiped off their value. The FTSE 100 closed down 215.03 points, or 4%, at 5151.08.
At one point it was down 8.7%, wiping £117 billion off the combined value of stocks shortly after trading started in the UK, as traders responded to a flurry of bad news caused by the coronavirus.
The index later settled and was down by around 7.2% to 4987.07 at about midday.
It means a loss of around £95 billion from the value of the top stocks in London, adding to more than half a trillion pounds that were wiped off the index in the previous three weeks.
The UK’s biggest airlines were the clear losers on Monday as easyJet, Ryanair and British Airways announced major cuts to flight schedules.
EasyJet said a “majority” of its planes could be grounded, Ryanair did not rule out a full grounding, and British Airways owner IAG said its capacity for April and May would be cut by at least 75% compared with 2019 levels.
IAG’s shares fell by more than a quarter, easyJet’s by 19% and Ryanair’s by 13%. Tui, which suspended all package holidays, dropped by a third.
Rolls-Royce, which builds aeroplane engines, lost around a fifth of its value.
Getting a boost from self-isolating shoppers, online supermarket Ocado was one of the only positive performers, jumping 6%.
It was another awful day for companies trading out of London, as they come to terms with what the coronavirus outbreak might mean.
It does not seem to matter what authorities do to shore up business – over the weekend the US Federal Reserve slashed interest rates to zero, and announced a giant 700 billion dollar (£570 billion) programme of quantitative easing.
Markets opened sharply down in the US, triggering an automatic suspension of trading minutes after the open at 1.30pm UK time.
The S&P 500 and the Dow Jones Industrial Average were trading down around 9.6% an hour later.
Russ Mould, investment director at AJ Bell, said: “While central banks around the world continue to fire everything they have to mitigate against a coronavirus impact on the markets, they weren’t able to prevent further carnage on Monday.
“The FTSE 100 marked lows not seen since the financial crisis and is testing the 5,000 mark.
“With scores of countries entering lockdown and little certainty on how long such draconian measures might be in place, investors are taking flight even if this means crystallising heavy losses which might ultimately be recovered once the crisis has been averted.”
In a sign of the concerns within Government about the impact of the crisis on business, Downing Street said Chancellor Rishi Sunak will chair a new ministerial committee to address the issue.
The Prime Minister’s official spokesman said the economic and business response committee’s job will be “to consider the impact on business and the economy of the pandemic and which responses should be put in place”.