The Dow Jones index plummeted by almost 1,500 points as Wall Street traders got the jitters while the FTSE 100 was down almost 170 points
The Dow Jones index plummeted by almost 1,500 points as Wall Street traders got the jitters on the day the World Health Organisation declared the ongoing coronavirus outbreak a global pandemic – while shares on this side of the Atlantic also took a pasting, with the FTSE 100 down almost 170 points.
In a grim day of trading on both sides of the Atlantic, the FTSE 100 fell in the red after the Chancellor’s 2020 Budget in the House of Commons on Wednesday. The index was trading about 0.2 percent lower but fell by as much as 0.5 percent while Mr Sunak was speaking. Then the Dow Jones has plummeted by roughly 1,000 points within the first hour of opening, and continue to drop throughout the day, putting it firmly in “bear” territory after losing more than 20 percent of its value compared with its record closing high last month.
The Dow Jones has plummeted by around 1,000 points within the first hour.
It plunged further by 200 points after the World Health Organisation (WHO) declared the coronavirus outbreak a global pandemic, further denting confidence.
It comes as markets have plunged this week – triggering fears of a global recession, as coronavirus impacts the globe.
David Spika, the president of GuideStone Capital Management, admitted: We have no idea when the coronavirus, the spread, is going to subside. That uncertainty is going to continue to create a lot of volatility. We have no idea how to model it, we have no idea what to expect from it.
At the start of trading today, the FTSE 100 stood at 5,960.23 points.
Possibly in anticipation of Rishi Sunak’s budget, it rallied past 6,000, to 6,068.79 points in the first 15 minutes of trading.
However, reality began to bite shortly afterwards, with the index falling steadily throughout the day.
As of close of business at 4pm, it stood at 5,892.21, down more than 170 points on its highs earlier in the day, and almost 70 points below its starting point.
In New York, the Dow Jones average as of 11.30am today local time stands at 23,921.29, 1,096.87 points down on the figure at close of business the previous day, when it stood at 25,018.16, representing a drop of 4.38 percent.
As of 2.20pm, it stood at 23,656.17, down 1384.83, equating to 5.54 percent.
With the Federal Reserve having already cut rates this month, the pressure is now on the European Central Bank (ECB) to act when it meets on Thursday.
Speaking about the coronavirus outbreak earlier today, Neil Dwane, global strategist and portfolio manager at Allianz Global Investors said, it is the only thing central banks can do in a public health crisis. They are trying to take the shackles off the banks to ensure we don’t get a cash crunch.
The Bank of England, which today cut rates by 50 basis points to 0.25 percent, did not announce new quantitative easing measures.
However, it did launch a new scheme to support lending to small businesses.
Speaking at a press conference this afternoon, WHO director-general Dr Tedros Ghebreyesus said: We are deeply concerned both by the alarming levels of spread and severity and by the alarming levels of inaction. We have therefore made the assessment that COVID-19 can be characterised as a pandemic.
There are more than 118,000 cases in 114 countries and 4,291 people have died, Dr Ghebreyesus said, with the numbers expected to climb.