On the international financial news beat they’re calling it ‘Freefall Friday’ as the FTSE 100 dropped to its lowest level since July 2016.
Mail Online reports today that Bank of England boss Mark Carney has warned “Britain could be set for an economic growth downgrade as the coronavirus crisis causes chaos in global markets”.
“The index opened the day 3.2 percent down, more than 200 points worse off than yesterday, and continued dropping continued dropping through the morning and was trading down 4 percent at 9.45am.
“With stocks in freefall, the latest figures mean that more than £200 billion has been wiped off London shares this week.
“A growing list of major companies are issuing profit warnings and say factory shutdowns in China are disrupting supply chains.
“Among them are British Airways and easyJet, who have admitted the crisis is having a damaging effect on profits.
“Rolls-Royce also admits the coronavirus could affect profits, with bosses ‘paranoid’ about its impact.
“School and business closures are also set to ravage the economy, as are potential travel bans and cancellations of holidays and flights.
“Bank of England Chief Mr Carney believes that these virus protection measures could devastate growth in the UK.
He said: “There’s less tourism – as you can see on our streets here in the UK. That’s lower activity as well.
“We would expect world growth would be lower than it otherwise would be, and that has a knock-on effect on the UK.”
The report continued: “The coronavirus outbreak has devastated markets around the world with London, Frankfurt, Tokyo and Hong Kong all hit hard overnight and this morning
“As of 8.15am, the FTSE-100 index was down 188.99 at 6607.41.
“Europe was also hit, with the Dax 30 in Frankfurt opening at 3.6 per cent down.
“And Asian stock markets also plunged, deepening a global rout after Wall Street endured its biggest one-day drop in nine years.
“And while the panic has already caused a bloodbath on trading floors, there are warnings that today will see the worst falls yet.
“Yesterday, the New York stock exchange suffered its biggest ever drop and £152billion was wiped off FTSE shares.
“The Dow suffered its worst points loss on record, shedding almost 1,200 points.”
A senior analyst at Swiss quote Bank said: “The panic mode is full on.”
“The coronavirus outbreak has certainly hit businesses, and it might have a longer-than-expected negative impact on company earnings and global growth,” he added.
Meanwhile British Airways and EasyJet profits were hit by coronavirus this week.
The parent company of BA – IAG said on Friday that their annual net profit dived 41 percent on higher fuel costs and strikes at BA, adding that the outlook was also ‘adversely affected’ by the coronavirus.
“Profit after tax slumped to 1.72 billion euros ($1.89 billion) last year from almost 2.9 billion euros in 2018, IAG said in an earnings statement.”
EasyJet said on Friday that “in order to ‘mitigate the impact from COVID-19’, the airline would deliver ‘operational efficiency and cost savings across a number of areas of the business’, including recruitment.
“‘Following the increased incidence of COVID-19 cases in northern Italy, we have seen a significant softening of demand,’ EasyJet said in a statement.
“Further, we are also seeing some slower demand across our other European markets.
“As a result we will be making decisions to cancel some flights, particularly those into and out of Italy, while continuing to monitor the situation and adapting our flying programme to support demand,’ EasyJet added.”
In the US, President Donald Trump “blamed the market plunge on the media coverage of the coronavirus and worries about Democrats winning the White House race”.
“European and US stock markets slumped painfully on Thursday as new coronavirus infections spread outside China, exacerbating fears of a global slowdown.
“London, Frankfurt and Paris all posted losses of more than three percent on the day.
“Wall Street also took a beating, with major indices shedding more than four percent in what is shaping up to be the US market’s worst week since the 2008 financial crisis.
“The Dow shed nearly 1,200 points, or 4.4 percent, taking its losses for the week to more than 11 percent.
“Oil prices plunged by more than four percent at one point before recovering somewhat, while the yen gained as traders turned to a traditional haven in times of economic turbulence.”
Another analyst added: “There was more coronavirus carnage on the markets.
“This is ‘one of the worst weeks in recent memory and terrifyingly, it’s not over yet,’ he said. ‘Friday is a tricky proposition.”