FTSE falls on US and bird flu fears
Fears over the health of the US economy and worries over a possible bird flu pandemic sent investors crashing down to earth today as global stock markets plunged.
The FTSE 100 Index was down 1.7% after figures showed the world’s biggest economy created far fewer jobs in March than expected.
The London market was 109 points lower at 6233, while on Wall Street the Dow Jones fell 0.9%, after new figures showed American employers added jobs at the slowest rate in nine months in March.
Falls were replicated in Europe, with the Cac 40 in Paris and the Dax in Frankfurt both down 2%.
Economic fears were compounded by nervousness about a recent outbreak of deadly bird flu in China.
Six people have died and authorities have ordered the slaughter of all poultry at a Shanghai market where the virus was detected.
That sent airline stocks diving, with British Airways owner International Airlines Group falling 7% or 18.35p to 233.95p, Thomson owner TUI Travel plunging 14.16p or 5% to 298.45p, and easyJet shedding 6% or 66p to 1031p.
The latest bleak economic data from the US follows more warning signals from the eurozone in recent days. Figures yesterday showed the eurozone’s services sector activity shrunk more than originally expected in March.
The figures heightened fears over the sustainability of America’s recovery and the prospect of Europe’s recession dragging on.
Craig Erlam, market analyst at Alpari, said: “The optimism surrounding the recovery in the US has been shattered in the space of a week. The second quarter decline in the US is well and truly under way.”
In March the blue-chip index notched up its 10th month in a row of gains but the latest economic pessimism risks bringing the FTSE 100’s rally to a juddering halt.
A third day of falls has seen the London market shed about 163 points since the opening bell on Tuesday signalled the start of the second quarter.
