US stocks plunged at the opening bell, mirroring stock markets in Asia and across Europe, as fears played out about a second wave of coronavirus infections.
US, Japan and China were among countries reporting a spike in cases. Meanwhile, in the UK, health secretary Matt Hancock tweeted: “Yesterday, across the UK, only 36 deaths were recorded with coronavirus – the lowest since 21 March.”
There are fears in the UK of a second spike as it reopens its shops.
The S&P 500 dropped 1.9 percent, while the Dow Jones Industrial Average lost 2.4 percent.
Parts of Beijing were shut down once again, after it recorded a number of new infections linked to a food market.
Oil also giant BP took a major hit this morning, as it wrote down the value of its assets by up to £14billion, citing long-term factors such as a shift away from fossil fuels.
On the news, crude oil futures plunged by around five percent, recovering slightly in the hour that followed. BP said coronavirus is having a lasting impact on its business, alongside the global economy.
Its long-term price assumptions are down by around 30 percent.
Portugal’s Prime Minister Antonio Costa said the European Commission’s recovery plan, worth £673billion (€750billion) is robust and balanced enough to tackle the economic impact caused by the coronavirus outbreak.
Costa told a news conference in Lisbon: “Our opinion is the Commission’s proposal is timely and smart.
“It is robust enough to respond to this crisis. It is balanced.”
The downturn in the Swedish economy has not been as bad as the Riksbank feared in it’s latest monetary policy report according to central bank deputy governor Anna Breman.
Ms Breman said: “Economic statistics have shown that in the first quarter the downturn was not quite as big as expected but we still expect at severe downturn in the second quarter.”
At its latest policy meeting in April the Riksbank laid out two scenarios, one had Swedish GDP declining 6.9 percent in 2020, whereas the more negative had a drop of 9.7 percent
The pound at was 1.2534 dollars compared to 1.2526 dollars at the previous close. A small move signalling distress in the market is equal on both sides of the Atlantic.
The euro at was 0.8974 pounds compared to 0.8984 pounds at the previous close.
European markets recovered slightly but were still trading lower than levels seen on Friday. The FTSE hovered around one percent lower, as Downing Street officially announced its plans to review social distancing measures.
The Prime Minister said a review was on the cards at the weekend.
“It will be completed in the coming weeks,” a spokesman told reporters, adding that the review would be chaired by Simon Case, permanent secretary at Number 10, and would report to Johnson.
US stock futures continued to look grim ahead of the opening bell later on.
Crude futures made a slight recovery, still trading around 3.4 percent lower.
After news trickled out over the weekend of deals drug company AstraZeneca has struck with governments, the costs were revealed today by a spokesman for Italy’s health ministry.
Italy, Germany, the Netherlands and France are buying 300 million doses of AstraZeneca’s potential COVID-19 vaccine as part of a European deal to secure supplies of the drug, costing 750 million euros, the spokesman said.
The countries also have an option to buy a further 100 million doses.
Bitcoin has shed around five percent in the last 24 hours, dropping below its price of $9,000 for the first time since the end of May.
The cryptocurrency is following wider market trends, as indexes round the world face a coronavirus-related selloff.
US stock futures are still on shaky ground for when US markets open later on, and European stocks were still down by lunchtime trading.
BP shares were down four percent as investors parse its recent revelations about the future of oil demand.
Crude oil has been under pressure in recent weeks as global demand plummeted amid shutdowns.
At one point, the price dipped below zero, as the price to store oil outstripped its value.
BP said it would have to become a “leaner, faster-moving and lower cost organisation”.
Metro Bank’s share price fell by 5.6 percent, as news was confirmed that it is considering a tie up with peer-to-peer lender RateSetter. The bank confirmed talks are at an early stage.
Metro has been in recovery mode since an accounting scandal caused its share price to plummet 90 percent last year.
A statement released by the company this morning said: “The company regularly assesses various opportunities in the market.
“There can be no certainty at this stage that a formal agreement will be reached, nor as to the terms of any agreement. A further announcement will be made if and when appropriate.”
Read more on Metro Bank here.
The first EasyJet flight since March 30th took off this morning, bound for Glasgow from Gatwick, as airlines resume some kind of service post-coronavirus lockdowns.
Reuters reported that passengers flying under new rules must wear face masks.
Chief Executive Johan Lundgren said the airline was “super excited” to restart flights.
The airline is resuming domastic flights to cities such as Edinburgh and Belfast. Flights from France, Switzerland, Italy and Portugal will also be gracing the skies.
Last week, UK airlines started legal processes, taking the UK government to court over 14-day quarantine rules for passengers arriving in the UK. The return to skies will be seen as a win, however the aviation industry is also worried that quarantine plans will crimp demand.
Public trust in Europe’s central bank appears to have deteriorated, dropping by more than other governing bodies over the past ten years, a new ECB paper said this morning.
This is despite high public confidence in the bloc’s currency.
The ECB has been pushed to its limits in the past ten years, having introduced new measures following the economic crisis.
The paper raises questions about policy and the way it communicates with the public, said a report by Reuters.
The bank has launched a strategy review, but the exercise had to be postponed due to the coronavirus crisis – which also forced the bank to take even more radical measures.
Hao Hong, head of research at Bocom International in Hong Kong told Reuters: “You basically now have a situation where, as the countries ease the lockdown, the number of cases will go up. In a market, which was already in the over-bought zone, any news on that front can trigger a sell-off.
“It’s unrealistic for the markets to factor in a V-shaped recovery, look at the Chinese numbers today … retail sales are still down.”
Lee Won, analyst at Bookook Securities in Seoul also said: “The fall is heavier in South Korea today because second-wave concerns added to the escalating of tensions with North Korea. North Korea made it clear its next step will be taken by the military, so there’s certainly heightened geopolitical risks.
“More may dump shares in the coming days as second-wave fears in China and the U.S. are clouding the outlook. South Korea may or may not prove resilient again, but certainly more and more are bracing for longer-term uncertainties.”
European markets opened more than two percent down across the board. The FTSE moved 2.2 percent lower, while Germany’s DAX sank 2.6 percent.
New coronavirus infections in China have raised the prospect of fresh lockdowns. When the country first went into lockdown markets around the world faced a punishing selloff.
The pound remained steady against the euro, as prime minister Boris Johnson prepared for his showdown with Brussels.
Crude oil plunged around 5 percent as news broke that BP is set to take a hit of up to £14billion, as the coronavirus crisis hits oil demand.
This will take the form of a series of non-cash write downs and charges as it navigates sapped oil demand.
Long-term price assumptions are shifting, due to what BP calls “the pace of transition to a lower carbon economy and energy system”.
The FTSE 100 is set to open around 1 percent lower later on, as investors parse the news on a spike in virus cases.
US stock futures suggest the Dow Jones Industrial Average will drop by 3.4 percent when it opens later on.
The S&P 500 was also set to drop nearly 3 percent.
7am: This is Lucy Harley-McKeown, taking over from Rachel Russell
Oil fell more than 2 percent on Monday, extending losses from last week, as new coronavirus infections hit China and the United States, raising the prospect that renewed outbreaks of the virus could weigh on the recovery of fuel demand.
Brent crude futures fell 89 cents, or 2.3 percent to $37.84 a barrel by 0302 GMT, while US West Texas Intermediate crude futures were down $1.18, or 3.3 percent, to $35.08 a barrel.
The coronavirus pandemic started at the end of last year in the Chinese city of Wuhan.
The oil benchmarks fell about eight percent last week, their first weekly declines since April, as US coronavirus cases started increasing. Over the weekend, more than 25,000 new US cases were reported on Saturday alone as more states reported record new infections and hospitalizations.