Global stock market values are continuing to decline sharply as investors digest the implications of the coronavirus outbreak and a growing number of companies warn of financial hits.
Trading across Asia and Europe on Wednesday saw values firmly in the red – with the FTSE 100 in London down again as drinks Diageo put a figure on lost sales in China to date.
Two days of heavy losses this week had already seen £100bn erased from the value of the top flight index as cases of COVID-19, the disease caused by the coronavirus, accelerate in European nations including Italy, Spain, Austria and Croatia.
Steep falls on US markets on Tuesday were exacerbated, traders said, by a Centers for Disease Control and Prevention warning on Tuesday that Americans should prepare for the spread of coronavirus in the United States.
Wednesday began with the Nikkei in Japan among the notable fallers as the Tokyo Olympics came into sharp focus.
It lost a further 0.8% though businesses exposed to a possible postponement or cancellation of the summer games took a hammering, analysts said.
The FTSE 100 was at levels not seen since January last year – below the 7,000 points barrier – 1.7% down at one stage in volatile trading.
At 6969 down 48 points the FTSE 100 is now below the Plimsoll line of 31st December 1999 – the gains for 21st century ex dividends all gone!
— David Buik (@truemagic68) February 26, 2020
The market moves prompted authorities in City history to highlight facts connected with the unwelcome milestone.
David Buik of Aquis Exchange noted that the FTSE 100 was trading at levels witnessed at the start of the 21st Century.
Travel stocks such as easyJet and TUI were again among the major contributors.
Shares in Diageo – the global drinks giant with brands including Guinness and Johnnie Walker whisky – fell almost 3% after it warned that the COVID-19 outbreak could hit sales in Asia by up to £325m during 2020.
Its statement pointed to the impact of restrictions on the movement of people to date and, pointedly, did not include a global estimate at this stage.
“The COVID-19 situation is dynamic and continues to evolve and these ranges exclude any impact of the COVID-19 situation on other markets beyond those mentioned… We will continue to monitor the situation closely,” Diageo said.
Food group Danone also cut its 2020 guidance because of supply problems in China while miner Rio Tinto told investors it expected a short-term impact.
Another UK-listed firm to warn of woes was SSP, which operates restaurants and bars in airports and train stations.
It forecast a 50% plunge in February sales across the Asia-Pacific region which accounts for 8% of its business.
Travel and holiday company stocks have taken the hardest beating this week over fears resorts could be declared off-limits for travellers amid efforts to contain the outbreak.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, saw no end to the sell-off in sight.
He said of the market mood: “In the dearth of important economic data, investors will continue gauging the impacts of the coronavirus on the economy.
“We expect to see a bigger crowd of sellers due to the mounting coronavirus crisis in Europe.”