FTSE 100 dragged lower by plunge in oil prices
The London market fell deeper into the red on Monday after oil prices dived to an 18-year low and coronavirus continued to spread across the UK.
Travel and aerospace firms led the fallers due to the plunging price of oil, as more planes were grounded due to the virus.
The FTSE 100 slipped 0.74% lower to 5,470 points by 11am on Monday as trading sentiment remained weak.
Plane part manufacturers Meggitt and Rolls-Royce were two of the hardest-hit firms, with their shares plunging 16% and 8.5% respectively as demand for aircraft continued to wane.
Travel firms such as easyJet and British Airways owner IAG also declined further due to the continuing lockdown.
Russ Mould, investment director at AJ Bell, said: “It’s a miserable time to be a transport operator given that lockdown measures deny a large number of individuals from having a ticket to ride.
“The idea that easyJet grounds its entire fleet would have seemed unimaginable six months ago, but sadly that is now reality.
“Other forms of transport are operating on a reduced schedule as there are still people who need to get to work to do essential jobs.
“It seems unlikely that trains and buses will grind to a halt, although their timetables can be severely cut back.”
The price of Brent crude oil also plunged as the Saudi Arabia-Russia price war continued to drive supply despite travel restrictions hitting demand.
Oil slipped below 20 US dollars a barrel overnight to its lowest figure since 2002. Despite recovering slightly on Monday morning, it still remained 10.8% lower for the day at 22.9 dollars.
Fiona Cincotta, analyst at CityIndex, said: “Oil has lost more than half its value over the past month as widespread lockdowns in Europe and North America has slashed oil demand.
“Around a quarter of normal global consumption could be lost.
“Expectations that lockdowns will be extended will keep pressure on oil demand outlook.”
All European markets were weighed down, with the German Dax drifting 0.3% lower and the French Cac slipping 0.76%.