FTSE 100 and sterling slump amid UK Covid-19 freight blockade – as it happened | Business

Sentiment on global markets has been dominated today by the news from the UK that the new coronavirus strain is more transmissible than previous versions – although not thought so far to be any more deadly.

For British would-be travellers and transport companies the news and subsequent restrictions were a blow, but the subsequent ban on all human travel from the UK to France, including lorry drivers, has prompted the first major test of the UK’s no-deal Brexit plans, with queues of lorries on the M20 motorway in Kent.

The UK is in talks with France over lifting the ban, and Prime Minister Boris Johnson is due to chair a meeting of the Cobra emergency committee this afternoon. You can read a full report here:

There is still significant disruption to get through at the ports: remember that seconds of delays can add up to a major blockage, so a total ban on drivers and the backlog of lorries will not be cleared quickly. Here is the Port of Dover’s latest.

In the US stock markets have fallen – albeit not quite as heavily as in Europe – as the uncertainty over what the new strain will mean takes hold.

Indeed, around the world the mood is thoroughly “risk off”, with investors moving money from equities around the world towards safe-haven bonds:

Tesla, the newest entrant to the S&P 500 in the US, has lost 5% in early trading or about $38 to reach $656. And remember, Tesla’s enormous market capitalisation means that it has an inordinate effect on the index: a move of $11 roughly translates to a point on the S&P 500.

You can continue to follow our live coverage of the coronavirus response from around the world:

Spain joins countries banning flights from UK as Boris Johnson holds crisis talks

Thank you for following our live coverage of business, economics and financial markets today, and please do come back tomorrow for more of the same. JJ

Investors in US companies have responded to concerns about the new strain of the virus by selling their stocks, mirroring European markets.

Via Reuters (expect some volatility around these numbers in the first few minutes):

The Dow Jones Industrial Average fell 20.05 points, or 0.07%, at the open to 30,159. The S&P 500 opened lower by 25.13 points, or 0.68%, at 3,684.28. The Nasdaq Composite dropped 159.49 points, or 1.25%, to 12,596.14 at the opening bell.

Five minutes to go until the Wall Street opening bell, and futures are showing that it will be a steep selloff – although not quite as dramatic as earlier moves suggested.

The S&P 500 is expected to drop by 1.4%, while the Dow Jones industrial average and the Nasdaq are both pegged for a 1% decline.

Some more detail on the £23m Evans sale: hundreds of jobs are at risk across the country in its various outlets, writes the Guardian’s Sarah Butler:

Buyer City Chic Collective plans to operate Evans, which made sales of £26m online and via wholesale last year, as an online-only brand. That will mean the closure of more than 100 Evans concessions and outlets within other Arcadia stores as well as its five standalone shops. The concessions and other outlets will not close immediately but hundreds of jobs are at risk at those outlets.

Arcadia, which employs 13,000 people at about 500 outlets, collapsed into administration last month as high street lockdowns prompted by the coronavirus pandemic piled on pressure after years of flagging sales amid heavy competition from rivals such as Boohoo and Primark.

A note for central bank/regulation watchers: the former chief executive of Barclays is among three banking insiders appointed to the Bank of England’s prudential regulation committee by chancellor Rishi Sunak.

Antony Jenkins, John Taylor, and Tanya Castell will join the committee, replacing Sandra Boss, Mark Yallop and David Belshamat various points next year.

Jenkins was forced out as Barclays boss in 2015. Since then he started a banking technology startup, 10x, and joined the board of Fannie Mae, the US government mortgage securitisation company.

Taylor previously held senior roles at Standard Life and Lloyds Banking Group, while Castell has served in senior roles at Handelsbanken, Lloyds Banking Group and UBS.

The prime minister’s spokesman has repeated requests from the food industry for people to refrain from panic buying. The UK has resilient supply chains and people should shop normally, the spokesman said.

The government is in close contact with France to get freight traffic moving again, the spokesman said.

However, on Brexit talks the spokesman said there are significant gaps remaining, and confirmed that the transition will end on 1 January come what may. (An extension of the transition would be difficult because it would require the UK and EU to actively support it.)

The FTSE 100 has lost more ground once more: the index is down by 2.6%. It’s also notable that the mid-cap FTSE 250 index has lost 2.9%.

Across Europe the Stoxx 600 index has lost 2.7%.

The pound is hovering near the $1.33 mark against the US dollar, a decline of 1.7% for the day.

An hour before Wall Street opens futures for the S&P 500 have lost 2%.

Today is something of a red-letter day for Tesla, the US electric car pioneer, as it belatedly joins the S&P 500 index.

It is not quite panning out as planned, with shares down by about 4% in pre-market trading ahead of its big entrance, but with the stock closing on Friday at a record high of $695, the company’s backers and chief executive Elon Musk won’t mind a small pullback.

The reshuffle will mean a host of index-tracking funds around the world – including those held by a large proportion of pensions – will have to buy the stock (and sell Aimco, the Apartment Investment and Management Company). Usually this is just a matter of course, but Tesla’s extraordinary stock price boom will mean that there is an unusually high volume of movement to adjust for what is now one of the world’s most valuable companies – even though it makes a fraction of the cars made by rivals such as Volkswagen or Toyota.

Tesla, which faced questions over whether it could avoid a cash crunch only 18 months ago, will account for 1.69% of the S&P 500, at a valuation of more than $650bn on Friday. For every $11.11 Tesla’s share price moves, the S&P 500 will change by a point.

The selloff in the UK has abated somewhat, after the French government indicated that it was looking at ways to restart the movement of hauliers across the Channel.

The FTSE 100 is now down by 2.1% – although that it still a hefty 135-point drop – at 6,393 points.

The pound is down against the US dollar by 1.8%, at $1.3280. Against the euro the pound has lost 0.7%, at €1.2168.

Crude oil prices have also come back a bit, after earlier dropping by as much as 5%. Brent crude futures are down by 3.7% at $50.37.

Stena Line Group, one of the ferry companies that transports freight across the Irish Sea, is moving one of its ships that regularly serves Belfast port to a French-Irish route instead.

The new route from Rosslare in the south of the Republic of Ireland to Cherbourg in northern France will allow some freight to avoid the UK, amid significant uncertainty over what the rules governing trade and customs will be on 1 January – not to mention the new restrictions on travel between the UK and many other nations.

It looks like investors looking at the US are gearing up to sell the fact of the stimulus package being agreed, after buying the rumour. In layman’s terms that means that US stock markets are on course for a heavy drop when they open in a few hours.

Stock market futures for the S&P 500 suggest the US benchmark will lose 2.2%. The Dow Jones industrial average is pegged down by 1.9%, while the Nasdaq (whose tech stocks provide a fairly good hedge against further coronavirus restrictions) is looking like a 1.4% decline is likely.

Here is an interesting perspective on where we are from a market volatility point of view. The Vix, known by journalist and commentator types as Wall Street’s fear gauge, has risen sharply. The Vix measures investors’ bets on stock market volatility.