Not a great start to the year! FTSE suffers its worst quarter since 1987 as coronavirus crisis sees shares tumble
Britain’s stock market has suffered its worst run for more than three decades as the coronavirus crisis sends shares tumbling.
Despite steady gains yesterday, the FTSE100 fell 24.8 per cent, or 1870.48 points, in the first three months of the year to end the first quarter at 5671.96.
That was the biggest quarterly percentage fall since the final three months of 1987 and the biggest quarterly points fall on record.
Despite steady gains yesterday, the FTSE100 fell 24.8 per cent, or 1870.48 points, in the first three months of the year to end the first quarter at 5671.96
The rout has wiped £470billion off the value of Britain’s blue-chip companies and £615billion off the wider FTSE All-Share – leaving savers with pensions and other investments nursing heavy losses.
Most of the losses – some 23.4 per cent – have come in little over five weeks as the spread of Covid-19 around the world accelerated.
Economy in the mire
Britain’s economy is plunging deep into recession having ground to a halt before the coronavirus struck.
Figures from the Office for National Statistics showed output stagnated in the final three months of 2019 as worries about global trade wars, Brexit and the general election dampened confidence.
That means the economy was struggling even before the Covid-19 outbreak reached the UK.
Capital Economics warned that Britain faces a 15 per cent slump in output in the second quarter of this year with the overall downturn far deeper than during the financial crisis of 2008-09.
The sell-off has been the worst since the Black Monday stock market crash of October 1987 when the FTSE100 fell 23 per cent in two days.
David Buik, a consultant to Aquis Exchange, said: ‘The recovery process for business could take a long time and it is likely that dividends will be cut or cancelled by many companies. This will damage pension values for years.’
Although the market has fallen significantly in recent weeks, the FTSE100 has risen 13.6 per cent since crashing to a nine year low below the 5000 mark last week.
The blue-chip index was up nearly 2 per cent yesterday after China’s official purchasing managers’ index (PMI) of manufacturing activity – where scores below 50 show decline and above show growth – rose to 52 in March, having plunged to a record low of 35.7 in February as factories across the country were shut to stop the spread of the virus.