FTSE 100 falls over 8% at market open to slip below 6,000 points
The FTSE 100 has slumped heavily in response to the oil price plummeting by almost a third overnight.
9th March 2020 09:23
by Kyle Caldwell from interactive investor
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The FTSE 100 has slumped heavily in response to the oil price plummeting by almost a third overnight.
The FTSE 100 has slumped heavily on the opening bell, as equity markets reacted to the oil price plummeting by almost a third overnight.
Oil tanked in response to Saudi Arabia launching the start of a price war by increasing production and drastically cutting its export prices on crude oil. The move came after OPEC members failed at the end of last week to come to an agreement with allies (including Russia) to cut oil production in response to the coronavirus outbreak.
The oil price fell nearly 30% to $31, which represents the biggest single day fall since the start of the first Gulf war in 1991. It has since staged a small recovery to $36 a barrel.
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In response the FTSE 100 tanked when trading kicked off this morning (8am), with the index slumping over 8% to fall below 6,000 points. European markets also slumped, with the German DAX declining 7.36% and the French CAC dropping 6.38%.
The falls were mirrored overnight by Asian markets, with Japan’s Nikkei 225 index down 5.07%, Hong Kong’s Hang Seng giving up 4.23%, while China’s Shanghai Composite index declined 3.01%.
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In January the FTSE 100 was trading at over 7,600 points, which is over 20% higher than its current level. An 8% plus one day decline would represent one of its biggest daily falls on record.
At the time of writing (8.30am) every UK stock in the FTSE 100 index was in the red, amid fears a global recession will take hold. Oil firms BP and Royal Dutch Shell have seen their share prices slump the most, both down around 20%.
This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
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