Yahoo Finance Coronavirus: FTSE 100 suffers largest one-week fall since 2008 financial crisis
The FTSE 100 suffered its worst one-week fall since the 2008 financial crisis as fears grew about the rapid spread of coronavirus.
In London, the blue-chip index of leading shares fell 3.2 per cent on Friday and was down 13 per cent this week at 6,580.6.
It was also the second-biggest points fall in a single week in the index's 36-year history.
More than £200bn has been wiped off FTSE 100 companies' combined values in just five days, as panic gripped markets and traders weighed up the economic impact of Covid-19.
Markets tumbled around the world, with a sell-off on Wall Street continuing after the opening bell on Friday.
The S&P 500 — already reeling from its fastest correction since the Great Depression — fell another 2 per cent, while the Dow Jones was down almost 3 per cent.
That came after Asian shares plunged earlier in the day. In Tokyo, the Nikkei plummeted 3.7 per cent and markets in Seoul and Sydney dropped by more than 3 per cent. Hong Kong and Shanghai dropped by more than 2.5 per cent.
Analysts warned that market turmoil offered a taste of the economic fall-out from a potential coronavirus pandemic.
"A worst case scenario of a global pandemic would undoubtedly have a significant economic impact and, given the fragile nature of the global economy, could tip the world into recession," said Richard Clode, portfolio manager at Janus Henderson.
"For now, that remains a low probability outcome and our on-the-ground reports from an assortment of technology companies in China give us confidence that with the right measures in place the virus could potentially be contained."
Half of UK and US firms were already predicting a recession this year, according to a survey of 700 senior executives by trade finance provider Stenn.
Bank of England Governor Mark Carney warned on Friday the Covid-19 outbreak could damage Britain’s economy as multinationals struggle to supply goods and services amid factory shutdowns and cancelled flights.
"What we are picking up with some of our bigger companies and companies around the world is that supply chains ... are getting a little tight. That’s lower activity," Mr Carney told Sky News.
"There’s less tourism — as you can see on our streets here in the UK. That’s lower activity as well.
“We would expect world growth would be lower than it otherwise would be, and that has a knock-on effect on the UK."
Oil prices also fell below $50 a barrel on the expectation that industrial activity will slow down sharply.
Companies that rely on tourism have been particularly badly hit as people call off trips. EasyJet's shares are down 27 per cent in a week that has seen some flights cancelled due to weaker demand. BA owner IAG announced strong 2019 figures but warned coronavirus would hurt profits this year. Its shares fell 8.4 per cent on Friday
BA has suspended flights to mainland China — the epicentre of the outbreak — and has cut its service to Hong Kong from two flights a day to one.
A rapid rise in confirmed cases in Europe prompted the Swiss government to ban events expected to attract more than 1,000 people. That means the car industry's most high-profile showcase meeting, next week's Geneva Motor Show, is set to be cancelled after Switzerland.
The property industry's annual get-together in France, MIPIM, is going ahead this week but a number of companies have dropped out, citing concerns over coronavirus' spread.
Consumer-facing companies such as retailers and restaurant owners are also expected to be negatively impacted as shoppers stay home.
Firms in a host of sectors are also predicting they will be damaged by disruption to supply chains, many of which run through China.
Primark owner Associated British Foods warned this week of shortages of some clothing lines if its factories in China remain disrupted for prolonged periods.
A halt to production of iPhones in China forced Apple to announce it did not expect to meet its second-quarter guidance, but chief executive Tim Cook said on Thursday that factories supplying the tech company were beginning to reopen.
“China is getting the coronavirus under control,” Mr Cook told Fox Business.
