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FTSE 100 slumps to its lowest level since May


The FTSE 100 index slid to a two-month low today following rising worries about the surge in Covid-19 infections and the number of British workers self-isolating.

It was 2.2 per cent down at 6,852.9 at around 2:45pm today as almost firms registered on the blue-chip index saw their share price decline, with the biggest faller being International Airlines Group (IAG).

Engineering companies were among some of the biggest fallers, with aircraft engine manufacturer Rolls-Royce Holdings, Johnson Matthey and Melrose Industries all among the top ten.

Bad day: Almost firms registered on the blue-chip FTSE 100 index saw their share price decline, with the biggest faller as of 2:30pm today being International Airlines Group (IAG)

Financial services giants such as Lloyds Banking Group and mining multinationals like Anglo American and Glencore also witnessed their share prices decline by more than 4 per cent.

At the same time, the FTSE 250 was 2.1 per cent lower at 21,995.25p as major travel firms saw significant drops over concerns that spiralling coronavirus rates in the UK will lead to restrictions being reintroduced.

These worries have been amplified by the UK Government implementing stage four of the roadmap out of lockdown, which lifts most Covid-19 rules from today.

These include the reopening of nightclubs for the first time in 16 months, the ending of the one-metre plus rule on social distancing, and sports stadiums being allowed to operate at full capacity for events.

According to the latest government data, there were 48,161 positive tests for the coronavirus in the most recent 24-hour period, the highest number since January 12 and a 43.3 per cent rise on the previous week. 

Imperial College’s Neil Ferguson, whose modelling initially shaped much of the UK Government’s lockdown strategy, has warned that the positive case numbers could reach 200,000 a day this year.

Major warning: Imperial College's Neil Ferguson has warned that positive case numbers among the UK public could reach 200,000 a day later this year

Major warning: Imperial College’s Neil Ferguson has warned that positive case numbers among the UK public could reach 200,000 a day later this year

He also told the BBC’s Andrew Marr show yesterday that it was ‘almost certain’ that hospitalisations will reach 1,000 per day and ‘inevitable’ that the country would hit 100,000 cases per day after restrictions are relaxed.

He additionally warned that as many as 2,000 people could be hospitalised for coronavirus each day and cause ‘major disruption’ to services and worsen the backlog for elective surgeries on the NHS. 

Businesses and trade organisations are increasingly fretting that the growth in infection rates and the number of Britons ‘pinged’ on the NHS Covid app will force them to curtail their operations as staff self-isolate. 

PureGym chief executive Humphrey Cobbold has said up to a quarter of staff in some areas have had to self-isolate while British Retail Consortium’s boss said the jump in those self-isolating is having a ‘significant impact’ on retail outlets.

Businesses and trade organisations are increasingly fretting that the number of Britons 'pinged' on the NHS Covid app will force them to curtail their operations

Businesses and trade organisations are increasingly fretting that the number of Britons ‘pinged’ on the NHS Covid app will force them to curtail their operations

Russ Mould, an investment analyst at AJ Bell, said: ‘Lots of people have been vaccinated and assumed they had become invincible. Reality is now striking as many of these individuals get a wake-up call by catching Covid or being pinged and told to isolate.

‘Pictures from UK airports would suggest some increase in flying but certainly nowhere near the levels one might have expected a few months ago. Then, everyone was talking about their big plans to celebrate once Freedom Day came around, and now it’s proved to be a damp squib.

‘The big concern for the market is whether we going to see a slowdown in the global economic recovery, and this could be the overriding force which results in a bad period for equities in the weeks ahead.’

Aside from rising Covid cases, oil companies also took a big tumble on the FTSE following oil prices falling after the Organisation of Petroleum Exporting Countries (OPEC) agreed to hike output in the coming months.

BP’s shares were 3.9 per cent down this afternoon; Royal Dutch Shell had a 3.2 per cent loss and Smiths Group, the owner of oil services firm John Crane, was 3.6 per cent lower.

Meanwhile, a warehouse fire at Ocado’s fulfilment centre in Erith in southeast London sent the online grocer’s share price tumbling to its weakest in more than a year this morning.

Ocado has been a major beneficiary since the pandemic began as hundreds of thousands more consumers decided to buy their supermarket shopping online.

Since the start of the year, though, its share price has fallen by around a quarter. By contrast, the FTSE 100 has grown by 4.3 per cent. 

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