LONDON, March 16 — UK shares mirrored steep declines in global stock markets today, as coordinated stimulus actions by central banks across the world failed to calm panic-stricken investors who feared deeper economic damage from the coronavirus pandemic.
London’s blue-chip FTSE 100 index dropped 7.5 per cent to its lowest since October 2011, adding to a 17 per cent slide last week, while the broader European STOXX 600 index was down 8.4 per cent.
A volatility gauge for eurozone stocks, commonly known as the fear gauge, jumped to an all-time high of 87.90 points.
Britain’s airline stocks took the biggest hit as the government looked set to discuss how to help the sector after major airlines including Virgin Atlantic and easyJet said the state would need to step in to prevent a collapse.
ICAG, the owner of British Airways, slid 24 per cent after saying it would cut its flying capacity by at least 75 per cent in April and May. Share of EasyJet and TUI AG slumped 26 per cent and 30 per cent, respectively.
London’s travel and leisure index is down for the ninth consecutive session, on course for its worst such losing streak on record
In a bid to improve liquidity and ease strains on global funding markets, the U.S Federal Reserve slashed its interest rates to near zero on Sunday, while its peers in New Zealand, Australia and Japan unveiled their own measures.
“The weight of this virus problem is so great that it’s greater than any central bank medicine,” said Keith Temperton, trader at Tavira Securities.
“What we really need is some sign that things can’t repeat. Once we even get close to peaking, the markets will rally hard. But until then, we just see selling.”
As of Sunday, the number of deaths of Britons with coronavirus jumped by 14 to 35, while the total diagnosed rose by 20 per cent to 1,372, health authorities said.
Adding to slowdown fears, a survey showed manufacturing in Britain weakened sharply in early 2020 even before concerns about the coronavirus crisis escalated, adding urgency to the need for a trade deal with the European Union.
Feeling the heat from lower rates, shares in major lenders including Barclays, Royal Bank of Scotland and Lloyds Banking Group fell between 10 per cent and 14 per cent.
Among other virus casualties, luxury carmaker Aston Martin tumbled 30.5 per cent to an all-time low after it said it was increasing a £500-million (RM25 billion) capital-raising plan by 36 million pounds.
Retail chain Primark’s owner, Associated British Foods, said it had shut 20 per cent of its store space and would not provide a full-year forecast due to the impact of the pandemic. — Reuters
