Stock markets have endured a renewed rout in values as investors fret over the extent of coronavirus damage expected to be inflicted on the global economy.
The brakes were firmly applied on Friday after a three-day rally for major indices in Europe and the United States which had raised hopes, in some quarters, that the worst was over after five weeks of turmoil.
The collapse began as COVID-19 took hold in Europe and losses on Monday, over the year to date, averaged more than 30% for the likes of the FTSE 100 and Dow Jones Industrial Average.
As the weekend market closure neared, analysts said investors were moving to protect their positions ahead of the two-day shutdown when they are unable to react to the news flow.
The FTSE 100 in London was 6.5% lower by mid-afternoon, with every constituent company trading in the red.
It closed the day 5.3% lower at 5,510. It meant just shy of £77bn had been erased from the value of the index but it ended the week 300 points above where it had started.
The CAC in France lost 4.2% on Friday while the German DAX was 3.7% off.
On Wall Street, the Dow was 3% down having recovered some losses earlier in the session.
Only on Tuesday, the US index had enjoyed its best single day percentage gain since 1933 as the market eagerly awaited details of the $2trn relief plan for the US economy agreed between Donald Trump’s White House and Capitol Hill.
The House of Representatives is due to vote on the package later on Friday, allowing the president to sign the bill over the weekend.
Stimulus from governments and central banks over the past few weeks have helped bolster sentiment but there are fears it will not be enough to offset the damage left behind – given there is so much uncertainty over what is to come.
Craig Erlam, senior market analyst for the UK and Europe at Oanda, said in a note: “Rallies don’t last forever and clearly investors are happy to call time on this one as we head into another uncertain weekend.
“We may have had a good run this week but the weekend can feel like a long time at moments like this and the numbers we’re getting from the US, which now has more cases than China or Italy, are getting uglier by the day.”
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