COVID-19 and Oil Disputes Compound Fears
– My financial investment advisor on WhatsApp first thing this morning
“Saudis and Russians just started oil price war to screw Americans. FTSE fell 9% this am. Feels like Lehman all over again today… Complete carnage!!”
On top of the fears from Coronavirus, a row between Russia and Saudi Arabia saw oil prices plunge by more than a fifth overnight. This issue compounds fears and panic in the markets.
The day has already been dubbed “Black Monday” by analysts who described the market reaction as “utter carnage”.
The FTSE 100 index fell more than 8% in the first few minutes of trade, before recovering slightly.
Oil prices are down more than 20% with Brent crude trading at $35.98 a barrel.
“It shows a level of nervousness in the market which I haven’t seen in a long time,” said Justin Urquhart-Stewart, co-founder of Seven Investment Management.
Investors are selling stocks at such a rate because they cannot quantify what Saudi Arabia and Russia might do, he said.
Oil firms saw the biggest falls, with shares in Shell and BP both down by about 15%, while Premier Oil saw its shares more than halve in value.
The hefty falls were also seen elsewhere in Europe, with stock markets in France and Germany also opening more than 7% lower. Norway – a major oil exporter – saw its main stock exchange fall 12% in early trade.