Global stock markets have crashed, with trading even briefly suspended in the US, as worries over the coronavirus crisis intensify amid a collapse in oil prices.

The FTSE 100 saw more than £130bn wiped from the value of its constituent companies within minutes on Monday morning as the latest sell-off began in Europe following sharp falls in Asia overnight.

The nightmare start to the week came as the price of Brent crude fell to near $30 a barrel, to record its worst daily plunge in percentage terms since the build-up to the 1991 Gulf War - hitting levels not seen since early 2016.

Not since the dawn of modern capitalism has the UK government been able to borrow as cheaply as it can today.

This chart shows you long-term UK govt bond yields since 1703

(consols then and 30yr bond in more recent yrs) pic.twitter.com/GNGDgFrPUy — Ed Conway (@EdConwaySky) March 9, 2020

It was blamed on Saudi Arabia starting a price war with Russia following their failure last week to agree a deal to curb output and help stabilise prices - hit by a plunge in demand because of the COVID-19 outbreak.

Good for the consumer, gasoline prices coming down! — Donald J. Trump (@realDonaldTrump) March 9, 2020

Saudi Arabia and Russia are arguing over the price and flow of oil. That, and the Fake News, is the reason for the market drop! — Donald J. Trump (@realDonaldTrump) March 9, 2020

The dive in stock market values over the past fortnight also reflects fears that measures to contain the virus - such as factory shutdowns and restrictions on movement - will cripple global economic growth.


In a risk-off environment such as this, investors usually turn to safe havens such as gold and government bonds.

So it proved on Monday as the two-year gilt yield turned negative for the first time ever early in the day, meaning investors were effectively paying the UK government for the right to hold its debt.

The FTSE 100 fell more than 500 points at the open in London to below 6,000 points - its fastest drop since the Brexit referendum result was declared.

How virus share price crash compares to 2008

It left the index in so-called bear market territory - more than 20% down on its peak value - and at a four-year low.

Energy stocks felt the worst pain with BP down by 24% while Royal Dutch Shell saw its value sink by a fifth.

The FTSE 100 closed 7.7% down.

The more domestic-focused FTSE 250 was 6.4% down, taking its value into a bear market.

It was a similar story in Germany and France but the MIB in Milan - currently subject to a COVID-19 lockdown - was more than 11% lower.

Trading on the S&P 500 and Dow Jones was suspended minutes after the open on Wall St after values fell by 7% - the trigger for a 15 minute pause in dealing - leaving them on track for their worst session since December 2008.

After trading resumed the Dow Jones was down by 5.4% and the S&P 500 was down by almost 6%.

How coronavirus has spread

Market analysts see no sign of an end to the bleeding in sight as Europe and the US risk following China and other parts of Asia in implementing virus containment measures.

In the UK, the budget on Wednesday is expected to be used to pledge extra money to the NHS while the Bank of England is examining an action plan in co-ordination with the Treasury.

NatWest announced £5bn of working capital support for business customers seeing disruption.

The tipping point for Monday's market mayhem, however, was the threat of a new price war following last week's bitter meeting of major oil-producing nations involving the Opec cartel, led by Saudi Arabia, and non-member Russia.

Together they had formed, for the past three years, a group known as "Opec+" as old rivalries were cast aside to take on the challenge to their dominance posed by US shale producers.

The nations had been expected to agree a deal that would have seen output cut by more than a million barrels per day combined, in a bid to prop up prices.

Saudi Arabia responded to Russia's failure to adhere to cuts by threatening during the weekend to raise Brent crude production from next month, to force Moscow into line.

Most recent coronavirus developments in the UK:

Chris Beauchamp, chief market analyst at IG, said of the crash: "Equity markets continue to react to the spread of coronavirus, which has seen Italy put its most prosperous regions on lockdown, but it is the collapse of the oil price and the end of Opec+ (and of OPEC itself?) that is providing a fresh reason to head for the exits.

"Oil firms, and US shale oil companies too, will face serious pressures with oil now trading around $30 for WTI (West Texas Intermediate) and $33 for Brent.

"Such pressures will include funding problems, spreading through the broader economy and ramping up expectations of more rate cuts, and potentially monetary easing."

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