Intensifying coronavirus fears wipe 拢44bn off the value of the FTSE 100
London's main share index lost more than 2% while US stocks also opened sharply lower, after China saw a sharp rise in cases.
Monday 27 January 2020 21:29, UK
Global stock markets have tumbled as concerns over the impact of China's coronavirus intensify, with the FTSE 100 seeing nearly 拢44bn wiped off the value of its constituent companies.
Trading screens from Tokyo to London and New York turned red after China - the world's second biggest economy - announced a sharp rise in cases of the illness.
Fears that the spread of the virus could put the brakes on global growth saw the price of oil slide, with Brent crude dipping below $60 a barrel to reach its lowest level since October.
That sent London-listed oil heavyweights such as Royal Dutch Shell and BP lower - helping the FTSE 100 lose 2.3%, or 174 points, by the close on Monday.
That was its biggest percentage fall since October.
British Airways owner International Airlines Group was hardest hit - down more than 5% - with rival airline easyJet down by just under 5%.
Cruise ship operator Carnival and Holiday Inn to Crowne Plaza owner Intercontinental Hotels Group each fell by 5% too.
Mining giants such as Rio Tinto and Anglo American, whose fortunes are closely linked to the rise of China and its appetite for resources, saw similar falls.
Other Asia-linked stocks, from HSBC and Standard Chartered in the banking sector to fashion house Burberry, also saw significant share price dips.
In Europe, luxury groups such as Louis Vuitton Moet Hennessy (LVMH), Christian Dior, Hermes and Gucci owner Kering - all reliant on Chinese demand - turned lower too.
On Wall Street, the Dow Jones Industrial Average closed 1.6%, or 453 points, lower, with casino and hotel groups among the worst hit together with airlines such as United and American Airlines.
The markets rout began in Asia overnight, where Japan's Nikkei fell 2%, before spreading to Europe where indices in Paris, Frankfurt, Madrid and Milan saw similar sell-offs.
Chinese stock markets were closed for the Lunar New Year holiday.
With the oil price under pressure, Saudi energy minister Prince Abdulaziz bin Salman al Saud said members of OPEC (the Organisation of the Petroleum Exporting Countries) could respond to steady the oil market if necessary.
He said markets were being "primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite [the virus's] very limited impact on global oil demand".
Andy Critchlow, head of news in EMEA for S&P Global Platts, told Sky's Ian King Live that, compared to when the SARS outbreak hit in 2002/03, China has a larger consumer base and it is, as a result, a larger consumer of crude oil.
He said: "It really is the strong narrative behind the oil market at the moment - in many respects it is the only narrative in the oil market.
"That's why oil traders are so worried about this: if China's economy wobbles as a result of this virus then over 2020 all the forecasts about Chinese oil demand growth will have to be revised."
The market reaction came as China tightened travel restrictions in an effort to contain the virus.
With an increasing number of Chinese cities in lockdown, analysts at S&P Global estimated that if spending on new year holiday-related services in the country falls 10% over the period, the country's growth will slow by 1.2 percentage points.