The FTSE 100 has seen more than £130bn wiped from the value of its constituent companies within minutes, in a renewed coronavirus-linked sell-off.
The nightmare start to the week came as the price of Brent crude fell to near $30 a barrel at one stage, to record its worst daily plunge in percentage terms since the build-up to the 1991 Gulf War.- hitting levels not seen since early 2016.
It was blamed on Saudi Arabia starting a price war with Russia following their failure last week to agree a deal to curb output and help stabilise prices – hit by a plunge in demand because of the COVID-19 outbreak.
The dive in stock market values over the past fortnight also reflects fears that measures to contain the virus will cripple global economic growth.
The FTSE 100 fell more than 500 points at the open in London to below 6,000 points, with energy stocks feeling the worst of the pain.
BP was down by 24% while Royal Dutch Shell saw its value sink by a fifth.
It was a similar story in Germany where the DAX was more than 7% lower.
The latest stock market rout began in Asia where the Nikkei in Tokyo lost 5%. Hong Kong’s Hang Seng was down by 4%.
US futures suggested the Dow Jones Industrial Average would lose almost 5% of its value – falling more than 1,200 points at the open, due at 1.30pm UK time.
Market analysts pointed to the fallout from last week’s meeting of major oil-producing nations involving the Opec cartel led by Saudi Arabia and non-member Russia.
A deal had been expected that would have seen output cut by more than a million barrels per day combined, in a bid to prop up prices.
Saudi Arabia responded to the failure of the talks by threatening to raise Brent crude production from next month, to force Russia into line.
– Sky News