FTSE plunges as ‘second wave’ fears break global stock market values

Global stock market values are taking a fresh hit on mounting fears a ‘second wave’ of coronavirus infections will wreak further damage on the global economy.
The FTSE 100 plunged below the 6,000 points barrier early on Monday after steep falls across many indices in Asia.

Market analysts cited a new flight from risk after it emerged over the weekend that authorities in China had closed a popular food market in Beijing following a spike in COVID-19 cases.
The revelation built on investor worries last week about infection numbers in the United States – the world’s largest economy ahead of China – that was also reflected in market values.
Michael McCarthy, chief market strategist at CMC Markets, said in a note: “Reports of a new COVID-19 lockdown in Beijing speak directly to market fears that the measures taken to contain the virus so far are not enough.”

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Image: Stock market values had been reflecting gradual re-openings of economies before ‘second wave’ jitters hit last week
Japan’s Nikkei was 3% down while all the major stock markets in Europe registered losses at the open with the CAC in Paris, German DAX and Spanish IBEX all down close to 3%.

The FTSE fell more than 2% in a broad-based sell-off – taking the index below 6,000 points.

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It had lost a third of its value at the peak of the pandemic panic but had recovered ahead of Monday’s opening to the extent it was 19% down in the year to date.
US futures suggested Wall Street was on track to feel renewed pain – following its worst week in three months – with the S&P 500 forecast to open 2% lower.
Neil Wilson, chief market analyst at Markets.com, said of the investor reaction: “We are seeing pockets of cases in Beijing suddenly – the first in 50 days, whilst Alabama, Florida and South Carolina have reported record numbers of new cases for three days straight.
“The dreaded second wave will weigh on equity markets – it is already sparking a wave of selling – and force policymakers to chuck even more money at this,” he wrote.

Source : Sky News