MARKET REPORT: Global markets plunge into turmoil

Global markets were plunged into turmoil as Covid cases surged in Europe and the US. 

Wall Street followed European indexes into the red as fears rose that spiking infection rates will lead to tougher restrictions, piling more pressure onto damaged economies and killing off more businesses. 

The Dow Jones fell by 2.3 per cent, while the S&P 500 was down 1.9 per cent, and tech-heavy Nasdaq dropped by 1.6 per cent. 

European continental bourses had also closed lower, with Germany’s Dax falling by a bruising 3.7 per cent after leaked comments from German Chancellor Angela Merkel showed she had warned colleagues the ‘situation is threatening’ and the country is facing ‘very, very difficult months ahead’. 

Italy and Spain, which were the hardest hit by the pandemic’s first wave, introduced wide-ranging measures that included new curfews and, for Spain, the triggering of emergency powers. 

In London, the sell-off hammered travel and energy stocks, sending the FTSE 100 1.2 per cent lower, down 68.27 points, to 5792.01, while the FTSE 250 fell 1.4 per cent, or 256.27 points, to 17853.30. 

British Airways-owner IAG (down 7.6 per cent, or 8.3p, to 100.7p), plane engine maintainer Rolls-Royce (down 7.2 per cent, or 17.6p, to 226.1p) and Premier Inn-owner Whitbread (down 6 per cent, or 142p, to 2244p) were among the top bluechip fallers. 

And on the FTSE250 Tui (down 8.9 per cent, or 28.7p, to 294.2p), Carnival (down 10 per cent, or 102.3p, to 925.2p) and Cineworld (down 9.1 per cent, or 2.64p, to 26.54p) plunged as traders priced in the looming threat of greater restrictions both at home and made it less likely people will travel abroad. This also knocked oil prices by 3 per cent. 

Brent crude was trading at $40.50 a barrel last night – and the drop dragged down BP (down 2.7 per cent, or 5.5p, to 200p) ahead of results today and Shell (down 2.6 per cent, or 24.8p, to 915.8p). 

Even though policymakers and the public are bracing for a long and difficult winter, a ray of hope yesterday came from drugs giant Astrazeneca, which reported its experimental Covid vaccine had made more progress. 

An interim study found the potential vaccine prompted participants’ immune systems to react against the virus. 

This was found in both adults and the elderly – and there were reported to be ‘low levels’ of side effects, or what the scientists called ‘adverse reactions’. 

The market cheered the news – sending Astrazeneca to the second highest spot on the FTSE100 leaderboard. It rose 1.7 per cent or 134p, to 8077p. 

An upgrade to ‘buy’ from brokers at UBS sent education publisher Pearson to the top of the Footsie leaderboard. It rose 3 per cent, or 15.2p, to 527.6p as analysts said it could reap rewards from the US higher education sector. 

Wagamama-owner The Restaurant Group and doorstep lender Provident Financial were boosted by investments from hedge fund Coltrane Asset Management. 

Coltrane upped its stake in the Provvy (up 0.6 per cent, or 1.4p, to 229.6p) from 5.8 per cent to 6 per cent, and disclosed a 3.8 per cent holding in The Restaurant Group (up 5 per cent, or 2.2p, to 46p). 

Student accommodation provider Unite Group and advertising behemoth WPP both started the week by announcing new appointments. Unite hired Richard Huntingford, the chairman of media group Future, as its chairman. Unite shares fell 1.9 per cent, or 17p, to 869p, while Future’s fell 0.5 per cent, or 10p, to 2015p. 

And WPP has beefed up its board with Chinese technology expert and professor Dr Ya-Qin Zhang, a former chairman of Microsoft China. 

WPP fell 1 per cent, or 6.8p, to 658.6p.