Coronavirus: Footsie plunges 500 points as oil price war and virus panic batter markets

Britain’s benchmark FTSE 100 share index opened more than 8 per cent down on Monday morning with the plunge triggered by the threat of an oil price war.

Following its opening at 8am on Monday, the leading index of London-listed businesses collapsed by more than 500 points, wiping billions off the value of Britains biggest companies. Picture: AFP

Following its opening at 8am, the leading index of London-listed businesses collapsed by more than 500 points, wiping some £130 billion off the value of Britain’s biggest companies.

The slump followed steep falls in Asia, with Japan’s Nikkei 225 index down 5 per cent while Australia’s ASX 200 tumbled 7.3 per cent, marking its biggest daily drop since 2008.

The threat of a price war between oil exporting organisation Opec and its main ally Russia saw oil prices slide by almost a third with the investor misery in London compounded by coronavirus fears.

Connor Campbell, an analyst at Spreadex.com, noted: “There have been plenty of bad days since the coronavirus infected investors. Yet Monday’s session felt like a different kettle of fish entirely.

“Once again raising the spectre of the financial crisis, the European markets suffered single-day losses not seen since the aftermath of the Lehman Brothers collapse. Essentially, it’s the equivalent of hoarding toilet roll and tinned beans – people are scared.

“A weekend full of alarming headlines only stoked the fires of panic. Italy is potentially planning to place 16 million people under quarantine; France has banned gatherings that exceed 1,000 people; the UK saw its third death from the illness; and the number of cases in the US has hit 500.

“Most damagingly, Saudi Arabia and Russia have shown a complete unwillingness to work together in this time of crisis. Unable to reach an agreement regarding an oil production cut, the Saudis slashed crude prices by their most in at least 20 years while preparing to ramp up its output, setting the scene for an all-out price war with Putin’s superpower.”

Neil Wilson, chief market analyst at Markets.com, said: “This will be remembered as Black Monday. 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 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.”