FTSE 100 hits six-month low as Covid-19 fears rattle global markets – as it happened

Graeme Wearden

from on 2020-10-28 20:11 (#59M38)

Rolling coverage of the latest economic and financial news, as European markets sink to their lowest point since May

8.09pm GMT

And finally... here's our news story about today's market mayhem:

8.08pm GMT

Ouch! Rather than recovering, Wall Street headed even lower in the final minutes of trading.

The Dow Jones industrial average has closed down 942 points, or 3.4%, at 26,520 - which looks to be the worst drop since June.

The recent uptick in Covid cases has led some countries to reinstate certain social distancing measures. In the U.S., the state of Illinois has ordered Chicago to shut down indoor dining. In Europe, German officials agreed to a four-week partial lockdown, while the French government imposed new nationwide restrictions until Dec. 1.

I think there's going to be a call for lockdowns the likes of which we've seen in Chicago," CNBC's Jim Cramer said Wednesday. The lockdowns without the stimulus equals what we're seeing."

Dow sinks more than 900 points for its worst drop since June amid rising virus cases globallyhttps://t.co/EszM0ucKBN pic.twitter.com/4Zu5VkWu3p

U.S. stocks close down 3.5% https://t.co/bDmJQtGWtQ pic.twitter.com/GFl26Hb4Mh

The Dow industrials fell for the fourth straight session, dropping about 3.4% and marking its longest losing streak since February https://t.co/JkXUuBmT3i

7.46pm GMT

Wall Street is showing a marked reluctance to clamber back off the mat.

As we move into the last 15 minutes of trading, the Dow is still deep in the red - down 2.9% or 797 points at 26,666 points.

7.45pm GMT

What will it take for the markets to recover their nerves?

Guy Foster, head of research at wealth manager Brewin Dolphin, says there are three major uncertainties hanging over investors at the moment.

7.41pm GMT

Over in Paris, President Macron has imposed a new national lockdown.

The restrictions mean that people can only leave the house to buy essential goods, seek medical attention, or use their daily one-hour allocation of exercise.

6.37pm GMT

Checking in on Wall Street again...and stocks are still deep in the red.

With less than 90 minutes trading to go, the Dow is down 2.8% or 787 points at 26,676.

6.34pm GMT

Anxiety over the economic outlook has wiped more than 5% off the oil price today.

Brent crude has fallen to $39.07 per barrel - its lowest level since the start of October, and nearly the weakest point since June.

6.30pm GMT

Here's a video clip of today's market action, from the Wall Street Journal.

#WSJWhatsNow: U.S. stocks are down sharply amid rising coronavirus infections pic.twitter.com/Uxh049YPWE

5.29pm GMT

David Madden of CMC Markets reminds us that the demise of US stimulus talks also helped to drive the FTSE 100 to a six-month low today.

The failure of Democrats and Republicans to agree a fresh economic package before the election wasn't entirely unexpected, but it still dampened the mood in the markets.

European stocks have endured a brutal wave of selling today as coronavirus concerns prompted dealers to dump stocks. There is a feeling in the markets that governments are not in control of the pandemic and that is why traders are running scared.

The number of new covid-19 cases is rising at an alarming rate and the increase in the hospitalisation rate is a worry too. Several European countries have announced tougher restrictions this week, including Spain and France. Today, it was reported that Germany will commence a light' lockdown next week, and that rocked sentiment because Germany was seen to be relatively in control of their situation.

5.21pm GMT

German chancellor Angela Merkel has now confirmed that Germany would be going into a partial lockdown from 2 November after talks with regional leaders.

The measures will apply to the whole country and will be reviewed in two weeks time, Reuters reports.

These are tough measures."

5.14pm GMT

There's no respite on Wall Street, where the Dow Jones industrial average is still down 3.2%, or 880 points, at 26,583.

That meant the storied index has lost around 1,700 points, or 6%, since the start of this week, and is now wedged at a one-month low.

5.07pm GMT

Laith Khalaf, financial analyst at AJ Bell, says investors have - finally - woken up to the threat of a second wave of Covid-19 infections and deaths.

It's surprising it's taken markets this long to take fright at the second wave of the pandemic, and the havoc it might wreak on the global economy. The writing has been on the wall for several weeks now, but stock markets have had their blinkers on.

Even the mighty US stock market, which has reached record highs in the face of a global economic slowdown, finds itself in the red. This is a broad sell-off, with almost no stocks in the market making positive ground, which tells us it's a classic risk-off reflex.

4.55pm GMT

Fears that new Covid-19 restrictions will derail Europe's recovery from recession hit all the main European markets hard.

The Stoxx 600 index of European companies has slumped to its lowest level in five months, ending the day down 3.1%.

4.40pm GMT

Newsflash: Britain's stock market has fallen to its lowest closing level in over six months, as pressure builds for a new national lockdown.

The blue-chip FTSE 100 has ended the day down 146 points at 5582 points, after scrambling back slightly from its earlier lows. That's a fall of 2.5% today.

4.24pm GMT

The latest UK government figures show that a further 310 coronavirus-related deaths were recorded in the last 24 hours, compared with 367 yesterday.

Another 24,701 people have tested positive for the virus.

4.17pm GMT

Alexis Gray, investment strategist at Vanguard, says today's selloff highlights that the economic outlook has dimmed", as Europe faces more Covid-19 curbs.

Gray explains (via the FT):

We're facing unprecedented uncertainty and that's what the market is struggling with."

3.46pm GMT

With less than an hour until European stock markets close, here's the state of play....

Shares are plunging on both sides of the Atlantic, as rising Covid-19 cases force governments to impose tighter restrictions.

3.32pm GMT

Germany's stock market has now slumped by 12% in little more than a fortnight, amid the sharp jump in Covid-19 cases.

Global markets sink in a sea of red on lockdown fears. Germany's Dax now in correction territory, down 12% from Oct 12th high. pic.twitter.com/ooUsorKFft

3.30pm GMT

Germany's stock market could post its biggest one-day loss since the crash of mid-March, points out Reuters.

3.25pm GMT

Reuters is reporting that its sources say talks between Angela Merkel and German state leaders have resulted in an agreement on a partial lockdown with bars and restaurants closing from 2 November - this coming Monday.

Our main Covid-19 liveblog has more details:

The new rules will allow shops to remain open on condition of allowing only one customer per 10 sq metres of space available.

The closure of bars and restaurants will apply until 30 November, the report claims.

#FTSE 5537.15 -3.35%#DAX 11515.14 -4.55%#CAC 4532.84 -4.18%#AEX 529.43 -2.97%#MIB 17897.12 -4.06%#IBEX 6436.8 -3.22%#OMX 1719.103 -2.55%#STOXX 2942.21 -4.18%

3.19pm GMT

Peter Garnry, Head of Equity Strategy at Saxo Bank, reckons more short-term pain' is ahead for the markets,as Europe battles the second wave of the pandemic.

Global equities are in risk-off mode driven by rapidly rising Covid-19 cases in the US and Europe suggesting a violent second wave as winter is approaching.

In Europe, several countries are close to maximum intensive care unit capacity and France is considering a new national lockdown for one month starting on Friday. Germany is tightening its mobility restrictions and overall, it increases the risk of another dip in the European economy.

3.00pm GMT

Oof! After nearly 90 minutes of trading, the Dow Jones industrial average is down 830 points, or 3%.

The S&P 500 (a broader gauge of the US market) and the Nasdaq are also down around 3%, putting Wall Street on track for its worst day since early September.

BREAKING: Dow plunges 830 points or 3%https://t.co/EszM0ucKBN pic.twitter.com/zukM5z93YM

Fresh lows here:#DOW 26633.58 -3.02%#SPX 3291.99 -2.91%#NDX 11240.7 -3.09%#RTY 1547.77 -2.69%#VIX 40.03 +20.03%

2.56pm GMT

Panic selling has returned to Wall Street, says Edward Moya of OANDA, and it's all down to the Covid-19 pandemic.

It is getting very ugly out there and it has nothing to do with the election. COVID-19 anxiety is back as hospital capacity concerns across the northern hemisphere will likely mean lockdowns will firmly be back in place.

Last night felt like it may have been the end of the path towards the return of normalcy. Baseball was able to finish the World Series, albeit in a bubble, but the focus for many fell with the LA Dodger third baseman, Justin Turner getting pulled in the middle of the game due to testing positive for COVID-19. The Dodgers' World Series title celebration quickly drew scrutiny after Turner joined his teammates and their family's celebration on the field, possibly becoming a superspreading event. Virus fatigue is growing for many Americans, Europeans too and the pessimism for the stock market is just accelerating as too many regions are unable to contain the virus spread.

2.45pm GMT

Wall Street's slump has acted like a punch in the solar plexus for European markets.

Germany's DAX is now down 4% and France's CAC is down 3.8%, while Britain's FTSE 100 is now down 183 points or 3.2% at a new six month low.

2.34pm GMT

Canada's central bank has warned that the coronavirus pandemic will hit many economies in the coming months.

Looking ahead, rising COVID-19 infections are likely to weigh on the economic outlook in many countries, and growth will continue to rely heavily on policy support.

In the United States, GDP growth rebounded strongly but appears to be slowing considerably. China's economic output is back to pre-pandemic levels and its recovery continues to broaden. Emerging-market economies have been hit harder, especially those with severe outbreaks. The recovery in Europe is slowing amid mounting lockdowns.

In the fourth quarter, growth is expected to slow markedly, due in part to rising COVID-19 case numbers. The economic effects of the pandemic are highly uneven across sectors and are particularly affecting low-income workers

2.19pm GMT

Back in London, the FTSE 100 has just hit a new six-month low - down 163 points or 2.85% at 5,565.

That's the lowest point since early April, and leaves the Footsie down 26% for the year.

2.14pm GMT

Wall Street's selloff is gathering pace, with the Dow Jones industrial average now down 607 points at 26,855 (-2.2%).

That's a new one-month low (going back to 25th September), and means the Dow is down 6% this year (and over 3% this month).

2.06pm GMT

Boeing is also among the fallers, down 2.2% after posting its fourth quarterly loss in a row - and outlining further job cuts.

1.58pm GMT

Every stock on the Dow Jones industrial average has fallen in early trading, as investors ditch shares in favour of safe havens like cash and government bonds.

Visa are leading the rout, down 4.5%, followed by chemicals firm Dow Inc (-3%) and oil producer Chevron (-2.8%).

1.39pm GMT

A wave of selling has send stocks sliding on Wall Street, at the start of trading.

The fact that there won't be any fiscal stimulus package before the US election is out of the way, is one of the reasons.

But more to the point, it is the rising levels of virus infections and deaths, resulting in tougher restrictions and lockdowns. This in turn has revived worries about the economic impact of the pandemic, just when things were starting to look positive. Investors are forced to re-assess their optimistic projections on growth and are thus reducing their risk exposures accordingly.

1.26pm GMT

Back in the UK, the whole of Nottinghamshire is expected to enter England's strictest coronavirus restrictions by the end of the week.

My colleague Josh Halliday explains:

It is understood that pubs, bars and other venues will be forced to close across the Midlands county from Friday.

It had been thought that only the city of Nottingham and three other council areas would enter tier 3 this week, but rising infection rates mean this has been expanded to the whole of Nottinghamshire, a region of more than 828,000 people.

1.21pm GMT

The FTSE 100 is heading back to this morning's lowest points as the City braces for a bumpy Wall Street open.

It's now down 143 points or 2.5% at 5584, with nearly every stock down.

1.15pm GMT

The surge in US coronavirus cases in the last week is also weighing on markets.

Nearly 500,000 people have contracted Covid-19 in the United States over the last seven days, according to Johns Hopkins University, with record numbers of new cases and hospitalizations in the Midwest.

Whether you call it a continuation of the pandemic or a third wave of new case discovery - it is the largest concern,"

Unless and until we get through this pandemic, it is hard for investors to imagine a better economic time."

1.09pm GMT

Tin hats may be required on Wall Street today. With 20 minutes until the open, the Dow Jones industrial average is down 600 points, or over 2%, in the futures market.

Oil is weakening too, with US crude down almost 5% at below $37.70 per barrel - a new three-week low.

12.52pm GMT

Economic news: the US trade deficit has narrowed, thanks to a pick-up in exports.

The Commerce Department reports that the gap between the amount of goods bought by Americans, and the amount sold overseas, fell by 4.5% in September.

The September 2020 advance #international_trade_deficit in goods was $79.4b, down 4.5% from August 2020. #Census #Advance_Economic_Indicator pic.twitter.com/XXaPbwC3wo

12.35pm GMT

Jet airline maker Boeing has posted its fourth quarterly loss in a row -- and is planning to cut thousand more jobs too.

Boeing will cut more jobs as it continues to bleed money and lose revenue during a pandemic that has smothered demand for new airline planes.

The company said Wednesday that it expects to cut its workforce to about 130,000 employees by the end of next year, down 30,000 from the start of this year. That is far deeper than the 19,000 reduction that the company announced three months ago.

12.20pm GMT

Brad Bechtel of Jefferies agrees that US election fears are weighing on the markets, as well as the prospect of new lockdowns in Europe.

France is set to announce further lockdown measures this evening that are not quite full lockdown but definitely severely limiting. Germany's seem even more strict with more business types slated to go back into a lockdown phase. Both countries contemplating 1 month time horizons to try to get in front of the surging virus case count.

The hospitalization rate probably more critical than the case count but unfortunately that too is rising in Europe as well as in the US.

12.08pm GMT

Every sector of Europe's Stoxx 600 index is down today.

Property companies, consumer-focused firms and miners are worst hit by the prospect of tougher Covid-19 restrictions:

11.44am GMT

Back in Europe, stocks are still being pummelled - keeping the Stoxx 600 index at a five-month low.

Here's the latest:

Expectations of a fresh bout of restrictions in France and Germany have sparked yet another selloff in Europe, with the DAX entering correction territory once again.

Mainland European markets are once again at the forefront of a collapse in equity valuations, with a second bout of nationwide lockdowns raising the chance of a double-dip recession.

11.28am GMT

Wall Street's fear guage' is also rising today.

The VIX index has jumped 10% today to its highest level since early September. That indicates investors are getting spooked by rising Covid-19 cases and the US election

11.09am GMT

The latest word from Paris is that French president, Emmanuel Macron, is expected to impose a new four-week national lockdown to halt the spread of Covid-19.

My colleague Kim Willsher explains that the details aren't clear yet, though:

There had been speculation the government would introduce an earlier curfew or partial lockdowns in areas worst hit by Covid-19. However, on Tuesday evening it was widely reported that Macron would announce a four-week national confinement similar to the two-month lockdown imposed in March and April.

The details were a matter of speculation but it was suggested all bars and restaurants across the country would be required to close. It was not clear if all shops would be allowed to remain open or only those selling essential goods, as during the spring lockdown.

10.54am GMT

Wall Street is currently on track to open sharply lower, with the Dow Jones industrial average down 1.5% or 423 points in the futures market.

That would take the Dow to a one-month low low.

Dow futures sink 400 points as Wall Street grapples with rising Covid cases #COVID #coronavirus #economy #economics #money #business #StockMarket #StockMarketUpdate #wallstreet #NASDAQ #Finance #DowJones #invest #marketwatch pic.twitter.com/d75p0Cqi0Z

10.52am GMT

As well as Covid-19, European stock markets are being weighed down by anxiety over US politics.

Last night, Republicans and Democrats conceded that a stimulus package wouldn't be agreed before next week's election - and both blamed each other.

For a long time now, Congressional Democrats have laid out a strategic plan to crush the virus.

The White House and Mitch McConnell have resisted, and on Sunday, Mark Meadows told us why saying We're not going to control the pandemic.'

Nancy Pelosi is only interested in bailing out badly-run, crime-ridden Democrat cities and states. That's all she is interested in. She is not interested in helping the people."

After the election, we will get the best stimulus package you have ever seen.

10.34am GMT

Next shares had now jumped by 4%, despite the wider gloom, after it hiked its profit forecast this morning. Here's the story:

10.03am GMT

French consumer confidence has already taken a hit.

Statistics body INSEE reported this morning that households' confidence in the economic situation has declined slightly this month.

French October Consumer Confidence Report - Inseehttps://t.co/J7TGjDGCuE pic.twitter.com/y9l6aekmLg

French Oct Consumer Confidence 94 Vs September 95.
But the full report tells a story of confidence being steadily eroded.

9.58am GMT

Mohamed El-Erian, chief economic adviser at Allianz, tweets that Europe is now paying the price for not doing more to prevent new Covid-19 outbreaks:

As Europe's covid situation worsens, there's recognition of what was/wasn't achieved in the period between the 2 waves:
Was: significant progress in treating the virus;
Wasn't: enough efforts to prevent new outbreaks.
This should be a critical input for needed policy adjustments.

9.41am GMT

After 90 minutes of volatile trading, European stock markets are off the lows, but still at their lowest levels in months.

The FTSE 100 is currently down 98 points, or 1.7%, at 5,630 - still the lowest since April.

9.30am GMT

UK high street and online retailer Next is bucking today's selloff, after reporting better-than-expected sales over the last three months.

The biggest single unknown is whether England, Scotland and Northern Ireland will follow Wales' decision to shut non-essential retail shops. A two week lockdown in England, Scotland and Northern Ireland in November would reduce Retail full price sales by around 57m³ (depending on timing), representing 17% of Retail full price sales and 6% of the Group's full price sales in the quarter.

We have found no evidence of the virus being transmitted in our stores; nor are we aware of any studies that suggest clothing and homeware retail presents a significant risk of infection.

8.59am GMT

Covid-19 vaccine anxiety is also hitting the markets today, on top of reports that Boris Johnson is under pressure to impose a new lockdown.

Reuters explains:

London's FTSE 100 fell to its lowest level in six months on Wednesday as investors took cash off the table on worries of more virus curbs and uncertainty over a coronavirus vaccine, with homebuilders and energy stocks leading the declines....

[The] UK Vaccine Taskforce Chair said on Tuesday that the first generation of vaccines is likely to be imperfect", a day after a study found that antibodies against the novel coronavirus declined rapidly in the British population during the summer.

FTSE 100 hits six-month low on lockdown fears, vaccine uncertainty https://t.co/BjIaPDX605 pic.twitter.com/lFqGLEJuvM

It's ugly out there

BRITAIN'S FTSE 100 HITS LOWEST POINT SINCE APRIL 16, LAST DOWN 2.1%

FRANCE'S CAC 40 AT LOWEST POINT SINCE MAY 26, LAST DOWN 3%

8.55am GMT

Britain's FTSE 250 index of smaller, UK-focused companies is also having a morning to forget.

Cinema chain Cineworld is the top faller, down 7% this morning. It has already temporarily closed its outlets in the UK and US, but prolonged lockdowns would intensify its need for fresh funds.

8.45am GMT

The selloff is gathering pace across Europe's stock markets, as lockdown fears rattle trading floors (and home offices).

In London, the FTSE 100 has now shed 148 points, or 2.5%, leaving the index firmly at a six-month low. Property companies, hotel groups, and travel firms continue to be worst hit.

It is becoming increasingly apparent that rising infection rates across Europe are now translating into a rise in hospitalisations, as well as a rising death count with both the UK and France posting their highest fatality levels since May as the second coronavirus wave continued to spread across Europe.

Concerns about a second national lockdown in France are also rising ahead of a scheduled national address later this evening by French President Emmanuel Macron. In Germany it is also being reported that Chancellor Merkel is proposing the closure of bars and restaurants for one month, in a move that could well last a lot longer as the weather gets colder.

8.38am GMT

The Covid-19 pandemic has also forced London's Heathrow to relinquish its title as Europe's busiest airport, to Paris's Charles de Gaulle.

The number of passengers passing through Charles de Gaulle has surpassed Heathrow, and the UK airport heavily criticised the government for slow progress" relative to its rivals in instituting a coronavirus testing regime for passengers.

The aviation industry has focused on a rapid testing regime as the best hope for reviving its fortunes until an effective vaccine is widespread.

8.19am GMT

Companies most at risk from a second Covid-19 lockdown are leading the stock markets selloff.

Property companies British Land (-5.5%) and Land Securities (-4.2%) are being hit by concerns that new Covid-19 restrictions will hit demand for offices.

8.12am GMT

In London, the FTSE 100 has sunk to its lowest level since April, when the UK was under lockdown.

The blue-chip index has shed 85 points, or nearly 1.5%, in early trading - dragging it down to 5644 points.

8.07am GMT

As feared, European stock markets have opened sharply lower.

France's CAC index has dropped 2%, as traders brace for president Macron's speech to the nation tonight.

Another day, another grim start for European stocks - Stoxx 600 down 0.8%, FTSE 100 down 1.2%, DAX down 1.8%, CAC down 2.0%, IBEX down 1.4%

Stoxx 600 at lowest since mid-June

8.01am GMT

The UK government is also under pressure to consider a new national lockdown, after Covid-19 deaths jumped alarmingly.

Yesterday evening, the number of people killed by coronavirus in the UK passed 60,000, with the daily death toll rising to 367. That means the country has passed the 200-a-day death toll weeks earlier than feared by the government's chief scientific adviser.

It is understood that the projection - provided by the Scientific Advisory Group for Emergencies (Sage) - has led to intense lobbying from Sir Patrick Vallance and other Government advisers for Boris Johnson to take more drastic action.

It's going to be worse this time, more deaths," said one well-placed source. That is the projection that has been put in front of the Prime Minister, and he is now being put under a lot of pressure to lock down again."

Tomorrow's Telegraph front page: Second wave forecast to be more deadly than first"#TomorrowsPapersToday

Read here: https://t.co/sMld6YHMEl pic.twitter.com/Dmw3nUiw65

7.53am GMT

The oil price is also being hit by fears of new Covid-19 lockdowns.

The return of the Sudden Stop" economic nightmare will play a considerable role in the market's mindscapes over the next few weeks even if Macron and Merkel don't introduce national lockdowns.

As far as international travel, you can write this year's holiday season off as no one is going to take the chance of getting stranded anywhere in a nationwide lockdown.

7.23am GMT

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

European stock markets are sliding towards their lowest levels since the spring, as the second wave of Covid-19 infections force governments to impose tough restrictions again.

***Revised*** European Opening Calls:#FTSE 5657 -1.26%#DAX 11830 -1.94%#CAC 4632 -2.08%#AEX 539 -1.19%#MIB 18258 -2.13%#IBEX 6545 -1.59%#OMX 1737 -1.51%#STOXX 3013 -1.89%#IGOpeningCall

[A draft resolution...] said an exponential increase in infections in almost all regions of Germany meant that many local health authorities could not track and trace all infections so it was necessary to significantly reduce contact between people now in the hope that extensive restrictions are not required over Christmas.

If the leaders of Germany's 16 states agree to the draft during a telephone conference later on Wednesday, fitness studios, discos and cinemas will close along with theatres, opera houses and concert venues.

Merkel proposing one month lockdown.#DAX 11882 -1.50% pic.twitter.com/7HMwsSX7M1

The Euro will almost certainly come under more pressure, already on the back foot as investors reduce pre-US-election risk. The chill winds would be felt in European equities as well. The fall-out is unlikely to be confined to just Europe.

Source	RSS or Atom Feed
Feed Location	http://feeds.theguardian.com/theguardian/business/economics/rss
Feed Title
Feed Link	http://feeds.theguardian.com/