This is why coronavirus is affecting the stock markets
The FTSE 100 dropped by nearly 10% on Thursday, wiping almost £143 billion off its value.
The dramatic fall came as investors reacted to the World Health Organisation's upgrade of the Covid-19 outbreak to a global pandemic.
What has happened to stock markets around the world?
The index, made up of 100 of the UK’s biggest companies, hit an eight-year low after markets opened down in the US and the European Central Bank unveiled a coronavirus stimulus package, but kept interest rates steady.
By 2pm, all 350 companies listed on the wider FTSE 350 were in negative territory, with shares in Cineworld slumping 17%, Travelex owner Finablr down 65%, train operator Go-Ahead down 36% and a whole host of oil, travel and retail businesses suffering.
The New York Stock Exchange was temporarily suspended after recording a 7% drop on opening.
The Dow Jones, an index of 30 of the largest companies in the United Staes, dropped more than 1,600 points, or 7%, and the S&P 500 fell a similar amount. Trading resumed after 15 minutes.
The falls have seen the FTSE enter a “bear market”, a market in which share prices are falling over a sustained period of time, encouraging selling.
Why are the markets behaving this way?
Covid-19’s classification as a global pandemic and its threat to major sectors of the global economy, such as travel, has stoked fears that the disease could tip economies around the world into a recession.
Warnings from airlines and technology manufacturers that their earnings could take a hit has seen has sparked fears of widespread economic pain.
Trump’s surprise travel ban created even greater panic among US investors, resulting in the frantic scenes on Wall Street today.
The drop of the price of crude oil earlier this week, caused by a price war between Saudi Arabia and Russia, creates an even bleaker economic picture.
Coronavirus: the facts
What is coronavirus?
COVID-19 is a respiratory illness that can affect lungs and airways. It is caused by a virus called coronavirus.
What caused coronavirus?
The outbreak started in Wuhan in China in December 2019 and it is thought that the virus, like others of its kind, has come from animals.
How is it spread?
As this is such a new illness, experts still aren’t sure how it is spread. But.similar viruses are spread in cough droplets. Therefore covering your nose and mouth when sneezing and coughing, and disposing of used tissues straight away is advised. Viruses like coronavirus cannot live outside the body for very long.
What are the symptoms?
The NHS states that the symptoms are: a dry cough, high temperature and shortness of breath - but these symptoms do not necessarily mean you have the illness. Look out for flu-like symptoms, such as aches and pains, nasal congestion, runny nose and a sore throat. It’s important to remember that some people may become infected but won’t develop any symptoms or feel unwell.
What precautions can be taken?
Washing your hands with soap and water thoroughly. The NHS also advises to cover your mouth and nose with a tissue or your sleeve (not your hands) when you cough or sneeze; put used tissues in the bin immediately and try to avoid close contact with people who are unwell. Also avoiding touching eyes, nose and mouth unless your hands are clean.
Should I avoid public places?
Most people who feel well can continue to go to work, school and public places and should only stay at home and self isolate if advised by a medical professional or the coronavirus service.
What should I do if I feel unwell?
Don’t go to your GP but instead call NHS 111 or look online at the coronavirus service that can tell you if you need medical help and what to do next.
When to call NHS 111
NHS 111 should be used if you feel unwell with coronavirus symptoms, have been in a country with a high risk of coronavirus in the last 14 days or if you have been in close contact with someone with the virus.