Markets hit by further losses despite US interest rate cut
Global financial markets have suffered fresh losses despite the US Federal Reserve slashing interest rates to near zero to shore up the US economy in the face of the escalating Covid-19 crisis.
Asian stock markets plummeted overnight, with Japan’s Nikkei down by almost 2.5%, Hong Kong’s Hang Seng by 3.7% and Australian shares by almost 10%. Shares in Europe and the US are also expected to drop sharply when markets open.
The FTSE 100 index is expected to plunge towards 5,100 points for the first time since November 2011. On Wall Street, futures for the benchmark S&P 500 index fell 5%, triggering a halt in trading.
Global recession fears drive markets down again despite Fed rate cut – business live
Alongside its second emergency rate cut, the Fed also said it would buy $700bn in Treasury and mortgage-backed securities as it attempts to head off a severe slowdown.
The Reserve Bank of New Zealand also stepped in, lowering its rate by 75 basis points to 0.25% at an emergency meeting. The Bank of Japan brought forward its 18-19 March meeting and kept borrowing costs unchanged, but pumped more money into markets, by doubling purchases of exchange-traded funds from to 6 to 12 trillion yen and other measures.
Data from China showed industrial production declined 13.5%, fixed asset investment tanked 24.5% and retail sales fell 20.5% in February, as the coronavirus outbreak brought the country to a standstill.
What to do if you have coronavirus symptoms in the UK
Stay at home for 7 days if you have either:
- a high temperature
- a new continuous cough
This will help to protect others in your community while you are infectious.
Do not go to a GP surgery, pharmacy or hospital.
You do not need to contact NHS 111 to tell them you’re staying at home.
People who are self-isolating with mild symptoms will not be tested.
Source: NHS England
The pandemic is taking a mounting toll on businesses, with a number of warnings from companies on Monday. The owner of British Airways, IAG, and easyJet, Europe’s No 3 and No 4 airlines, said they would cut capacity drastically to try to survive the coronavirus outbreak, which has stopped people travelling around the world.
IAG said it would cut its flying capacity by at least 75% in April and May and its outgoing boss Willie Walsh is deferring his retirement.
IAG has already suspended flights to China and cancelled all flights to and from Italy. To cut costs, it will ground surplus aircraft, freeze recruitment and reduce working hours.
Walsh said: “We have seen a substantial decline in bookings across our airlines and global network over the past few weeks and we expect demand to remain weak until well into the summer. We are therefore making significant reductions to our flying schedules.”
UK airline bosses are calling on the government to step in with an immediate multibillion-pound emergency bailout. The holiday firm TUI Group announced at the weekend that it was temporarily suspending the “vast majority of all travel operations until further notice”.
The gambling company Flutter, which owns Paddy Power and Betfair, issued a profit warning after sports events around the world were cancelled or postponed in recent days.
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