Stock markets in the US and Europe plunged into correction territory. On Thursday, the panic over the spread of Coronavirus (aka COVID-19) triggered a wave of fresh sell-offs.
What We Know:
- On Wall Street, the Dow Jones recorded its biggest one-day point drop ever, closing down 1,191 points at 25,760, while in London the FTSE 100 dropped another 3.5pc to 6796.4.
- The blue chip index’s fall wiped £62bn off the value of British blue-chip companies, hitting millions of savers’ pensions, and dragging the index into a correction. American Dow, pan-European Stoxx 600 and French and German markets all entered corrections too in another brutal day of selling, according to the Telegraph.
- Despite concerns about the COVID-19 outbreak’s impact on the global economy, markets have still been pushing upwards for weeks. The Coronavirus’ recent rapid spread into Italy this week broke the morale of Western investors, who have been brutally selling off since the weekend.
- This week alone, the Dow Jones has shed 12pc, or almost 3,600 points. US shares have also plummeted from recent highs as Wall Street’s investment banking giants slashed their outlooks for corporate growth in the coming year.
Analysts at Goldman Sachs now expect top US companies to generate very little profit growth this year due to the virus crushing demand and trade begins to come to a halt. JP Morgan analysts have the same general outlook over US profits but do say that if government spending persists towards combating the disease, it could later boost markets once more.