More than £62 billion was wiped off the value of Britain’s top index on Monday, as global traders reacted with fear to the first major outbreak of coronavirus in Europe.
The FTSE 100 lost 247.09 points to 7156.83, a 3.3% drop, its biggest one-day fall in more than four years.
The rout happened after Italy said it had diagnosed more than 150 cases of coronavirus in the country, the biggest outbreak outside China.
The World Health Organisation (WHO) on Monday warned that the world must prepare for the spread of the virus, but stopped short of calling it a pandemic.
More than 2,600 people have died in China.
The drop was the biggest points fall on the blue chip index since August 2015, when nearly 289 points were wiped off the FTSE 100, in reaction to what China’s official news agency called a “Black Monday” for the country’s stock markets.
Britain’s biggest airlines were some of the losers on the day as investors ran scared of the travel industry.
Shares in easyJet lost almost 17%, or 251.8p, Tui was down 9.8%, and British Airways owner IAG lost more than 9%.
But the FTSE 100 was fairly lucky compared with some of its European peers. Germany’s Dax fell more than 4%, the Paris-based Cac fell 3.9%, while Italy’s MIB dropped a astonishing 5.4%.
The S&P 500 and the Dow Jones in the US were both down about 3.3% at about 5pm UK time.
As investors flocked away from the stock markets, they gravitated towards the safe havens. Gold gained 1.8% to 1673.23 US dollars per ounce, while silver was up about 1.9% to 18.82 dollars per ounce.
Investors also fled from oil, with Brent crude down 5.4% to 55.32 dollars per barrel.
In company news, Countrywide remained rather isolated from the chaos raging on the markets, as its shares dropped a mere 0.6p to 339.6p after the business announced it is in talks with LSL over a merger deal which could create the UK’s largest estate agency business.
LSL, which has brands including Your Move and Marsh & Parsons, confirmed it is in discussions over a deal with Bairstow Eves owner Countrywide, in a short statement.
Associated British Foods, the company behind Primark, saw shares drop 40p, or 1.6%, to 2,543p after it warned that there is a risk of supply shortages on some of the retailer’s lines later in the year if factory delays in China caused by the coronavirus outbreak are prolonged.
However, it said the high street giant, which sources numerous products from China, is “well stocked with cover for several months” and does not expect any “short-term impact” as a result of the virus.
Tobacco giant Philip Morris International (PMI) dropped 1.01p to 87.27p as it was blasted by health campaigners over reports that it drew up a £1 billion “tobacco transition fund”, to be spent by Public Health England and local authorities, to persuade smokers to quit and switch to heated tobacco products.
The company, which has heavily invested in its IQOS heated tobacco brand, has been accused of talking to a leading anti-tobacco MP to present a smoke-free bill proposing the fund to the House of Commons, as part of an investigation by Dispatches and The Guardian.
There were only three risers on the FTSE 100 on Monday. They were Pearson, up 18.2p to 579.6p, Bunzl, up 52.5p to 2,001p, and Polymetal, up 1p to 1,345p.
The biggest fallers on the FTSE 100 were easyJet, down 251.5p to 1,257p, Tui, down 83.4p to 767.60p, International Consolidated Airlines, down 57p to 566p, Anglo American, down 182.2p to 1,942.8p, and Melrose, down 18.4p to 226.2p.