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FTSE 100 plunges on fears of global recession triggered by coronavirus – business live

Rolling coverage of the latest economic and financial news, as stocks slump across the world amid the deepening coronavirus crisis

12.19pm GMT

Trading firms are starting to block small investors from buying US stock futures, over fears they will lose too much money by taking a punt and trying to buy on the dip.

“Do not let retail clients buy,” one ETX Capital dealer warned his colleagues on the trading floor.

“We don’t know exactly what’s going to happen,”

12.04pm GMT

Gold hit a new seven-year high this morning, amid the mad dash for safe-haven assets.

“Over the last 7 days, trading volumes on BullionVault have jumped 102% from the previous 52-week average, with more than £38.2m of gold, silver and platinum changing hands in total ($49.6m, €44.1, ¥5.2bn).

“Net of client selling, gold demand has risen 545.3% from the prior 52-week average, totalling 6 large bars last week, each weighing 12.5 kilograms.

12.00pm GMT

How low could the markets go?

Clem Chambers, CEO of stocks and shares website ADVFN, reckons the London stock market will keep falling in the coming weeks.

“It’s Crash Monday with the already fragile markets in free fall following the unravelling of OPEC Plus and Saudi Arabia launching an oil price war against the backdrop of falling oil demand triggered by the Coronavirus. We will see a few short-lived bounces along the way, but 5500 is the next stop on the FTSE.

The Dow and S&P have not crashed yet but when they do it will hammer the FTSE hard, again. It’s difficult to see the FTSE below 5000 but it’s not impossible. This rout is far from over and its aftermath will take more than months to pan out.”

11.51am GMT

America’s central bank is pumping tens of billions of dollars into the markets today, in an attempt to stop the financial system running out of liquidity.

The Federal Reserve has boosted its overnight repo operations from $100bn to $150bn.

New York Fed increases sizes of overnight and term repo operations to at least $150B from $100B

New York Fed announces an increase in repo operations:

-Overnight operations will have a maximum of $150 billion vs prior $100 billion limit through Thursday

-Tuesday’s and Thursday’s term repo operations will rise to $45 billion from $20 billionhttps://t.co/dAWf6VQ39T

11.46am GMT

Correction: the New York stock exchange will open at 1.30pm UK time today, not 2.30pm.

My mistake – I’d forgotten that US clocks moved forward an hour yesterday. So 9.30am New York time will come round sooner.

11.36am GMT

On a trading floor near London’s Liverpool Street Station, the trading floor of spreadbetting firm ETX Capital is buzzing.

“We’ve not seen anything like this since the financial crisis.”

11.27am GMT

Financial service company Hargreaves Lansdown, which provides ISAs, pensions, and share dealing, says it is “very busy” this morning.

It’s not clear whether that’s people looking to sell, or buy, or simply check how much poorer they are today.

Hi, I’m really sorry. We’re very busy this morning and there may be a short delay on the phones. Sarah

If the service I’ve seen from Hargreaves Lansdown brokers is anything to go by, a huge tranch of retail haven’t been able to get out or in to anything so far this morning https://t.co/Ts4zNMZoQv

11.15am GMT

UK bank NatWest has announced a package of funding support worth £5bn for small businesses struggling to stay afloat as the coronavirus outbreak drags down the economy.

11.12am GMT

The German government says it hopes to avoid any business falling into insolvency as a result of the coronavirus.

Spokesman Steffen Seibert told a news conference in Berlin that:

“The government will do everything to support businesses and workers in this great economic challenge.

“Our goal is that ideally no business in Germany will fall into insolvency due to the coronavirus outbreak, and ideally no job will be lost.”

11.03am GMT

BP’s share price has slumped to its lowest level since 2016 (the last time the oil price cratered).

That’s a blow to BP’s army of small shareholders. At just 320p, shares are dropping towards the levels seen after the Deepwater Horizon disaster in 2010.

10.27am GMT

Some more bad news for incoming Bank of England boss Andrew Bailey: his leaving do has been scrapped due to coronavirus fears.

The party for the outgoing Financial Conduct Authority chief executive was set to take place on Wednesday evening at the RSA House near Charing Cross, just a few days before he’s meant to take up the BoE post on 16 March.

10.21am GMT

Bjarne Schieldrop, chief commodities analyst at SEB, says Saudi Arabia has created a race to the bottom to sell Crude into the market:

“Saudi Arabia declared an oil price war this weekend, as OPEC+ departed Vienna on Friday without a deal. It’s still a slight hope that Saudi Arabia is playing this card in an effort to push OPEC+ members back to the negotiation table before the current production cuts expire at the end of March, however Russia is unlikely to bend to such power tactics.

“Saudi Arabia basically offered its oil on a fire-sale as it dropped its Official Selling Prices (OSPs) to all regions by $6-8 per barrel – the sharpest decline in Saudi Arabia’s OSPs in decades.

10.14am GMT

Stock markets in Japan, the Philippines, Indonesia and Singapore have all fallen into bear market territory today, amid a wave of selling, Bloomberg reports.

A perfect storm plunges Asian stocks into bear markets one by onehttps://t.co/uaaAEx718H pic.twitter.com/P0nFvH28i6

10.09am GMT

Volatility in European stock markets (known as the Fear Index) has hit its highest levels since the eurozone debt crisis back in 2011.

10.05am GMT

The oil price war has triggered turmoil in the currency market too.

Russia’s rouble has slumped by over 7% today (an astonishing slump) from 68 roubles to the US dollar to nearly 74.

10.00am GMT

Optimism among eurozone investors has absolutely crumbled this month, as the coronavirus crisis has raged.

The monthly Sentix survey of investor morale, just released, has slumped to -17.1 for March, down from +5.2 in February.

The new coronavirus, which is now spreading significantly across the globe and requires consistent measures to contain it, is plunging the global economy into recession.

Never before has such a strong synchronised collapse of the global economy been measurable in our data.

#EUROZONE MAR SENTIX INVESTOR CONFIDENCE: -17.1 V -11.4E (1st negative reading since Nov. 2019 and lowest since Apr. 2013)
– Expectation Survey: -20.0 v +6.5 prior (matching lowest since Aug. 2019) pic.twitter.com/g2ygoZW2vV

9.50am GMT

The Saudi price war could drive oil prices below $30 a barrel for the first time since the 2016 oil price crash, according to market experts at S&P Global Platts.

“All signs point to Saudi Arabia and Russia wanting to inflict maximum pain.

“At the very least to instigate as fast a response as possible from US shale producers and each other.”

9.40am GMT

The FTSE 100’s early-morning slump is one of the worst in history, reports Russ Mould, investment director at AJ Bell.

He suspects that investors are moving from the “panic” stage to the full-blown “capitulation stage”, as the coronavirus crisis escalates.

“Thinking about buying in today’s market is only for the brave and there remains considerable uncertainty about the spread of coronavirus and its effect on economies and society.

“By 9am the FTSE was trading 7.1% lower at 6,004 which put the index back to the levels seen before the EU referendum vote in early 2016.

9.37am GMT

Today’s market rout comes as the number of Covid-19 infections worldwide bursts over the 110,000 mark.

The global death toll is heading towards 4,000 — including the third death in the UK last night.

Related: Coronavirus live updates: stock markets plunge as infections pass 110,000

9.28am GMT

After 90 minutes trading, the London stock market is still reeling from its opening 8.5% crash.

But there are signs that the City is catching its breath. The Footsie is still suffering a right old kicking, but has now clambered back over the 6,000 point mark.

9.20am GMT

Gavekal Research analyst Tom Holland says Saudi Arabia has triggered today’s market rout by launching an oil price war over the weekend.

As he puts it:

“If you ever wondered what would happen if someone lobbed a hand grenade into a bloodbath, now you know. It’s not pretty,”

9.15am GMT

Germany bank Berenberg has forecast that the coronavirus will drag Europe’s economy into recession this year.

It has slashed its forecast for European growth, and sees a sharp downturn in Italy and Germany during 2020. It also believes the UK will only grow by 0.9% this year, even if the government boosts spending in Wednesday’s budget.

9.04am GMT

After a panicky open, the European stock markets are all suffering huge losses as well.

The Milan stock market is absolutely tumbling, after Italy’s government sealed off large swathes of its country in an attempt to combat Covid-19.

European shares fall 6.2% and Italian stocks fail to trade; BP tanks 18% as oil prices crash https://t.co/y3F7DOueEM

8.54am GMT

Today’s stock market slump is attracting parallels with the crash of 1987.

Neil Wilson of Markets.com writes:

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.

There’s a risk of losses in oil positions needing to be covered by selling down elsewhere – we’re in a vicious circle. Equity markets are hideous today and these kind of moves are to be afraid of as they can lead to aggressive tightening in credit that can spiral into real financial distress. We don’t know even know what kind of impact the coronavirus will have on the economy yet bond and equity markets are screaming recession.

8.48am GMT

The FTSE 100 is now more than 20% off its recent peak — which means we’re in Bear Market territory.

Back in January, the blue-chip index was trading over 7,600 points — some 22% higher than this morning’s trough.

8.35am GMT

Money is absolutely pouring into government bonds, as investors try to find somewhere safe to put their money.

This is forcing prices to stratospheric highs, which pushes the yield (or interest rate) to new lows.

Here’s the latest market moves:
London’s FTSE 100 fell at least 8% and UK two-year gilt yields dipped negative for the first time
Russia’s rouble fell 7%
US sovereign debt rallied sharply

8.27am GMT

European stock markets are also plunging this morning.

The Stoxx 600, which contains Europe’s largest 600 companies, has tumbled by over 6%.

8.20am GMT

This morning’s tumble, below 6,000 points, means the FTSE 100 is languishing at its lowest point since summer 2016.

Saudi Arabia’s decision to launch an oil price war, and the deepening coronavirus crisis, are a toxic combination for markets.

Markets have gone into panic mode, pure and simple. The fall-out between the Russian and Saudis has lead the Saudis to pledge over the weekend that it will flood the global oil market with supply, in order exert their will over oil prices.

The plunge in the oil price has raised major credit risks in financial markets, which are already reeling from the expected slowdown in global growth because of the coronavirus.

8.16am GMT

Here are the top fallers on the FTSE 100, as panicky investors ditch stocks.

8.10am GMT

NEWSFLASH: The FTSE 100 index has plunged by over 8.5%, on track for its worst one-day fall since 2008.

The index of top blue-chip shares has slumped by around 565 points, or 5895, as trading gets under way. Every stock is in the red, hit by fears of a global recession.

8.05am GMT

This is really unusual – and a bad sign. The London stock market is struggling to match buy and sell orders this morning.

8.03am GMT

Ding ding! European markets are open, triggering a burst of sell orders.

The FTSE 100 is being dragged deep into the red…. already shedding 120 points or 2%.

7.59am GMT

Shares in Saudi Aramco, the country’s oil giant, have been suspended after slumping by 10% in early trading.

The state oil giant Saudi Aramco has seen its shares drop by 10% as Riyadh stock market opens, halting trading. The drop came as global oil prices suffered their worst losses since the start of the 1991 Gulf War. https://t.co/81AwXZ7jaR

7.57am GMT

The oil price has suffered an astonishing plunge overnight.

Brent crude slumped by 30% at the start of trading, after Saudi Arabia effectively launched an oil price war against competitors such as Russia and the US.

7.50am GMT

Analysts in Australia are reeling from its worst stock market slump since 2008, my colleague Martin Farrer reports:

“There is genuine panic in the price action …” said Chris Weston, head of research at the web trading platform Pepperstone in Melbourne. “I haven’t seen anything like this for years.”

David Bassanese, chief economist at BetaShares Capital in Sydney, said the market would not bottom out until the US situation was clearer.

Related: Panic hits global markets amid threat of coronavirus and oil price slump

7.41am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Futures signaling Europe and the U.K. may enter a bear market today.

Good morning Europe! pic.twitter.com/zCyJx6uWrj

US futures remain limit down @ 5%.

Limits increase at 1330 GMT:https://t.co/ob7Inb9nM6

Related: Leaked coronavirus plan to quarantine 16m sparks chaos in Italy

Stock markets in Europe and the United States are braced for their biggest falls since the 2008 financial crisis after the start of the trading week saw panic selling amid the double threat of a coronavirus-driven global recession and an oil-price war.

It follows huge losses on Asian markets on Monday where fears about the worsening worldwide economic slowdown were exacerbated by the shock decision by Saudi Arabia over the weekend to increase oil production in an attempt to drive competitors such as Russia and the US out of the market.

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