The FTSE 100 has slumped more than 100 points to fall below the 7,000 mark as fears over the spread of the coronavirus continued to take their toll on global stock markets.
The UK blue-chip index lost 102 points, or 1.5%, to trade at 6,916, dropping below the 7,000 mark for the first time since December 2018.
The fall follows heavy losses for overseas stock markets overnight. In the US, the S&P 500 fell 3%, the Dow Jones dropped 3.2% and the Nasdaq was down 2.8%. In Asia, Japan’s Nikkei 225 fell 0.8% and Hong Kong’s Hang Seng was down 0.7%.
European markets also fell at the open. Germany’s DAX 30 was down 1.5% and France’s CAC 40 fell 1.2%.
The yield on US 10-year government debt, which moves in the opposite direction to prices, has fallen to a record low amid a flight to safety. After dropping below 1.31%, the yield has now edged higher to 1.32%.
Gold is trading close to seven-year highs, rising to $1,652 an ounce this morning, though down from a spike to $1,660 on Monday.
‘What we appear to be seeing is the realisation that global economic growth could well come to a halt as the combined effects of a flu virus and belated attempts to stem the spread of it across the globe raise the prospect of an economic sneeze, as consumers stop spending and supply chains seize up due to workers and consumers staying at home,’ said Michael Hewson, chief market analyst at CMC Markets UK.
On the FTSE 100, travel stocks were again hardest hit. Budget airline group EasyJet (EZJ) was down 2.9% at £11.78, TUI (TUI) fell 2.3% to 713.2p and cruise ship operator Carnival (CCL) was down 1.9% at £25.88.