Stock markets around the globe witnessed a downfall as the rising possibility of winter Covid-19 lockdowns in Europe triggered a flood of selling.
With the rising number of Covid-19 cases, major economies like France and Germany are looking forward to planning tougher coronavirus restrictions that might hinder the recovery of the region’s fragile economy.
On Wednesday, FTSE 100 fell by over 2.5% to a six-month low of 5582.82, and shares in 98 of the UK’s top 100 blue-chip firms closed the day lower in a sell-off incited by the panorama of renewed turmoil.
While the downfall was experienced by numerous sectors of the economy, travel and leisure firms listed on the FTSE 250 fell by the highest margins, with the British cruise company, Carnival and cinema company, Cineworld down by 7.6% and 6.9% respectively.
Though the 3% fall of FTSE on Wednesday was reported to be steepest in many years, it was on the19th worst of 2020. In March, the market jumped by over 10% at a point. As the sell-off reflected across the world, the concerns about the whole northern hemisphere heading towards the second wave of coronavirus were mirrored.
The chief market analyst at a leading online trading provider, IG, Chris Beauchamp, confirmed that the indices are impacted badly by the flood of selling due to the imminent lockdown measures in Switzerland and Germany, with France expected to follow the four-week lockdown. Looking at the present course of travel across the continent, the UK lockdown seems to follow in this situation.
The European Central Bank (ECB) meets are rumored to take new actions till December, but ThinkMarkets, the online brokerage firm, claimed that it might change its mind in the situations.
A financial analyst, Laith Khalaf, expressed his surprise about markets taking so much time to react to the possibility of a second wave of the pandemic.