European markets are in shock after the US decided to suspend all flights in and out of Europe for the next month, except for flights from the UK. The FTSE plunged more than 6% this morning to trade just above 5,500. The index has now lost 2,000 points in the space of only a month.
Now that all bets are off it is maybe not a surprise that Flutter Entertainment, formerly Paddy Power Betfair, is leading the FTSE fallers with a 12% decline.
Airlines, travel firms and hotel chains are among the worst hit by the flight suspension but banks and insurers are also seeing fierce declines. More worryingly, where normally utility firms and gold miners would provide a counterbalance to a declining market, this morning there is not a single FTSE stock in the black.
Frankfurt and Paris are not doing any better with both DAX and CAC trading more than 6% lower. The US decision on the flights has moved the coronavirus onto another level which will cut deep into more industries than just the travel sector.
Unsurprisingly Brent crude also plunged as the flight suspension will affect demand for jet fuel, one of the major “end destinations” for crude oil. Oil prices have already been eroded by a decline in demand from China and the decision by Saudi Arabia to pump more oil from April. The latest news will make it very hard for oil prices to come out of the doldrums.