Coronavirus crisis: FTSE 100 plummets as deadly outbreak sparks global financial panic | World | News

The London stock market plunged 3.5 percent lower by mid-morning – it’s lowest level since December. Italy’s MIB index was down more than four percent, while declines in global financial powerhouses France and Germany were sharper than normal in European trading. South Korea’s KOSPI stock market closed down 3.9 percent following news of seven deaths in the country and 700 confirmed cases of COVID-19.

The pan-European Stoxx 600 benchmark also lost 3.5 percent of its value.

Fear is sweeping through global stock markets, with economists downgrading growth forecasts for China and the wider global economy.

Oxford Economics has warned world financial output could flatline during the first half of this year if the coronavirus outbreak is declared a global crisis by the World Health Organisation (WHO).

Rabobank analysts warned in a note Monday: “Regular readers will know that our four projected COVID-19 scenarios were ‘bad, worse, ugly, and unthinkable’.

“Current news today suggests risks that the base case is rapidly shifting from ‘bad,’ meaning only China is impacted, to ‘ugly,’ where both emerging Asia and developed economies see soaring infection rates and deaths.”

David Madden, analyst at CMC Markets, said: “The fear is that we could be looking at a scenario where the virus spreads aggressively in this part of the world too, so traders have the perfect excuse to take profits and get out of stocks because it wasn’t that long ago that they were at fairly lofty levels.”

AMP chief economist Shane Oliver said: “There is lots of bad news on the coronavirus front with the total number of new cases still rising.

“Of course, there is much uncertainty about the case data, new cases outside China still looks to be trending up and the economic flow on has further to go with the Chinese economy likely to have contracted in the March quarter.”

Travel-related stocks have taken the brunt of the impact, with easyJet losing more than 12 percent and holiday operator TUI down 8.5 percent at one stage on Monday morning.

Stocks in British Airways owner IAG fell seven percent, while hotel and mining stocks also took significant blows.

Brent crude oil was trading at almost four percent lower at just over %56 a barrel.

Gold, which is seen as a safe haven for investors in times of financial turmoil, surged to its highest level in seven year.s at $1,6883 an ounce.

This is a breaking story. More to follow.

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