Financial market experts are calling today ‘Black Monday’ due to the “utter carnage” unfolding in global markets following the outbreak of the coronavirus and a row over oil prices.
The FTSE 100 saw more than £130bn stripped from the value within minutes following a dispute between Russia and Saudi Arabia, which has seen oil prices drop by almost a quarter.
Brent crude saw its price fall to almost $30 a barrel early in the day.
It marked the markets worst daily dip in share price in percentage terms since the build-up to the 1991 Gulf War.
Major oil firms BP and Shell, which have their headquarters in London and The Hague respectively, both fell by 15%.
Shares were already faltering due to the growing concerns surrounding the coronavirus, as it continues to spread worldwide.
STOCK MARKETS IN FREE FALL
– OPEC fails to strike deal, coronavirus concerns
– Oil prices fall more than 25%
– Biggest drop since 1991 Gulf War
– Tokyo closes down 5.4%
– London down 8.5%
– Germany down 7.4%
– Dow futures down 4.8%
— BNO News (@BNONews) March 9, 2020
There are growing fears that global economic growth will be hit hard because of the coronavirus, as workplaces and factories may be forced to shut down.
The market dip could mean bad news for those living with pensions, as many pension owners let experts choose where to invest their money in order to see it grow.
— Bloomberg Markets (@markets) March 9, 2020
The value of their pensions depends on the market prices and the performance of the investments – however it is worth remembering that pensions are long-terms investments and are not necessarily deeply impacted by short-term market dips.
The BBC’s World Service Economics Correspondent Andrew Walker said: “The price of crude oil is about half the level it hit in early January.
“The root cause of that is the coronavirus. It has hit demand for oil and some of the big exporters have been trying to stabilise its price. Last week a group of them discussed production cuts.
“But the biggest producer among them, Russia refused and the oil price fell further.
“Then at the weekend, Saudi Arabia, the biggest of the producers that were pressing Russia to agree output cuts, announced it would increase supplies and offered discounts to its buyers. That sent the oil price into freefall.
“That in turn undermined stock markets, although it wasn’t the only factor. The lower oil price is a problem for the credit markets.”