Carnage on global markets despite stimulus packages

Iseq finishes down almost 8% as European shares see worst close in nearly seven years

Trading was briefly halted on Wall Street, while European shares marked their worst close in nearly seven years on Wednesday as recent stimulus measures failed to placate investors seeking to exit equities in the face of the coronavirus pandemic.

Britain’s stock markets also fell for the eighth day in 10, as more companies warned of a severe hit to earnings from the coronavirus outbreak.

Dublin

The Iseq finished down almost 8 per cent as the Irish stock exchange was roiled along with its peers.

Heavyweight stocks dragged the Iseq deep into the red. CRH, the building materials giant, fell more than 14 per cent to €17.42 on fears of a global recession and moves by an activist investor.

The banks also performed particularly poorly, as institutions were leaned on by Government to show forbearance to SMEs and people caught up in the crisis. AIB was down 18 per cent to €1.01, while Bank of Ireland was down almost 10 per cent to €1.84.

London

The blue-chip Ftse 100 fell 4 per cent, with travel stocks such as Easyjet and InterContinental Hotels under pressure. Aerospace engineers Meggitt, Senior and Rolls-Royce dropped between 11 per cent and 25 per cent as evidence grew of the severe damage the crisis is doing to global airlines.

IT company Micro Focus International slumped 22.6 per cent as it scrapped its final dividend as part of its plan to prepare for the fallout from the crisis.

Car retailer Pendragon dropped 12 per cent as it warned the virus spread in Britain could reduce footfall and worsen results that already show it losing money.

Wagamama owner Restaurant Brands and another pub operator, Mitchells and Butler also outlined severe falls in sales and efforts to shore up their financial situation for later in the year.

British fashion brand Superdry tumbled 30 per cent after warning it would miss its 2020 targets, but also said it had a strong capital position and was in talks with lenders about additional flexibility and liquidity.

Among the few gainers were supermarket chains, with WM Morrison Supermarkets and Sainbury's gaining more than 10 per cent amid panic buying by shoppers.

Europe

The pan-European Stoxx 600 index closed down 3.9 per cent, negating all of Tuesday’s gains when a bumper stimulus plan from the Spanish government had spurred some buying in regional equities. The Stoxx 600 has lost a quarter of its value in March, and is set for its worst month ever after the epicentre of the outbreak shifted from China to Europe.

Given that several European players depend on US demand for engineering services and parts, a slowdown in US industrial activity will send ripples across Europe. Airbus tumbled 22.2 per cent to its lowest since 2016. France's Safran, which supplies Boeing, ended nearly 23per cent down.

Among other movers reeling from the impact of the outbreak is cruise operator Carnival, which bottomed out the Stoxx 600, plunging 34 per cent as the global tourism industry saw demand flat-lining.

New York

By early afternoon, the Dow was down 9.06 per cent, the S&P 8.35 per cent, Nasdaq 7.66 per cent

After the S&P 500 fell more than 7 per cent, it triggered a 15-minute pause, with stocks adding to losses when trading resumed. The next halt would occur at a 13 per cent decline.

The Dow Jones Industrial Average wiped out all the gains logged since Donald Trump’s inauguration, dropping as much as 10 per cent, with investors craving more government spending to offset the virus impact.

With airports and hotels emptying and airlines asking staff to take unpaid leave to stem losses, the S&P 1500 airlines index sank 27.6 per cent, in what could be its worst day on record. Shares in Hilton, Marriott and Hyatt hotels fell 20 per cent to 30 per cent.

Additional reporting: Reuters, Bloomberg

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