FTSE 100 ends Wednesday down another 4%
Performance of FTSE 100 on Wed 18 Mar 2020
Source: Google Finance
S&P 500 opens with 4% drop despite Fed’s aid
US stock market opened Wednesday’s session with a 4 per cent drop, handing back the gains made on Tuesday.
At 14:21, the S&P 500 was sitting at 2,427 points after falling 4.06 per cent in early trading. This came despite the US Federal Reserve’s announcement last night of an aggressive stimulus package to allow dealers to lend against stocks and bonds.
It was also announced that the White House would begin talks with Congress about a $1trn fiscal stimulus package, the FT reported, in efforts to stem the economic damage caused by the coronavirus.
The US market’s falls mirror weak trading in its UK and European peers; the FTSE 100 also opened on a 3.4 per cent down in spite of a new economic £350bn stimulus package for UK companies.
Supermarkets rallying thanks to increased demand
Performance of FTSE 100 members on 18 Mar 2020
More property fund closures on the horizon
Three more property funds suspended: ‘More will follow’ say experts
‘Flurry of stock market warnings are first signal of Covid-19 impact on companies’
Ed Monk, associate director from Fidelity Personal Investing’s share dealing service, said: “The damage to the corporate world from the Covid-19 outbreak is beginning to be laid out via a host of warnings to the stock market this morning. Along with airlines and travel, hospitality will be among the first hit. Brewer Marston’s, Wagamama owner The Restaurant Group and Revolutions Bars all warned that trading will be significantly impacted this year.
“Fashion retailer Superdry also confirmed that not only will it not meet profit guidance issued as recently as January, but that it will now not issue guidance for this year. Software firm MicroFocus confirmed that it will now not pay a final dividend. Even supermarket Morrisons - which is in a sector that enjoys some insulation in the crisis - confirmed that a planned special dividend now won’t be paid.
“This is just the beginning of the impact of the crisis on companies. We should expect more companies to follow suit in the coming days as companies alter plans to reduce costs in this period of maximum uncertainty.”
FTSE down 3.4% despite giant rescue packages
The FTSE 100 has started another trading session in the red, despite moves by chancellor Rishi Sunak to support UK businesses through the coronavirus crisis.
As at 08:46, the index of London-listed mega-caps was down 3.35 per cent at 5,117 points, while markets on the continent were also down. US markets had closed overnight with gains, although Japan’s Nikkei 225 lost 1.68 per cent.
Yesterday evening, Sunak announced a £350bn stimulus package for UK companies – which included £330bn in loans, £20bn in other aid, a business rates holiday and grants for retailers and pubs.
He told reporters that the coronavirus pandemic and its impact was an “economic emergency. Never in peacetime have we faced an economic fight like this one”.
The US has also pushing for its own aid package, which at $1trn would be roughly the same size as the entire UK budget and bigger than the US response to the 2008 financial crisis.
It could include a form of ‘helicopter money’, or handing cash directly to citizens. US Treasury Secretary Steven Mnuchin said: “We're looking at sending cheques to Americans immediately.”