It starts of a price war between oil-producing countries increasing to fears over coronavirus.
Because of coronavirus, oil prices jump down to biggest drop in decades and makes markets in meltdown. It starts of a price war between oil-producing countries increasing to fears over coronavirus.
Coronavirus, oil prices plunge to biggest drop
When market opened on Sunday evening, oil prices fall down by almost a third. It because traders were scared by Saudi Arabia launching price war with Russia. Actually, it happens because Saudi Arabia and other OPEC member failde to reach an agreement with Russia which is not a member. Hopping it attempts to curb oil output in the wake of the coronavirus outbreak.
Since the start of the 1991 Gulf War, Brent crude, the international benchmark, at one stage went below $30 per barrel, signalling the biggest one-day drop in percentage terms. Investor reaction has caused stocks markets around the world to fall with the FTSE 10 falling by more than 8 per cent in early trading. FTSE 10 is the leading index of London-listed businesses,
The collapse wiped billions of pounds from the FTSE 100, leaving it at a four-year low and falling to levels not seen since the Brexit referendum result. Neil Wilson, chief market analyst at Markets.com, said: “This will be remembered as Black Monday. If you thought it couldn’t get any worse than the last fortnight, think again. The blood really is running in the streets, it’s utter carnage out there.
“The oil price shock has totally unnerved investors, while Italy’s decision to quarantine 16 million citizens in the north of the country has left markets feeling like the coronavirus outbreak is out of control – where next? The UK is preparing for the worst.” Within the first half an hour of trading, around 15 FTSE 100 companies lost more than 10 per cent of their value, Elsewhere, the ASX 200 in Australia tumbled by over seven percentage points, while the Nikkei 225 in Japan dropped by more than five per cent.