Ebola fears have been blamed for the largest one-day fall on the London stock market in a year yesterday, which wiped a colossal £46 billion from the value of British businesses, as a bad week got even worse for investors.
The LSE fell by 2.8 percent yesterday, taking the total seven-day fall to around 10 percent amid a “perfect storm” of investor-spooking factors, reports the Daily Mail. London isn’t the only city to have taken fright at current events, as exchanges in Europe and the United States also reacted negatively to global crises.
American index Dow Jones was hit hard after the concerning revelation by the Centre for Disease Control in Atlanta this week that “we don’t know how within the isolation unit” it was possible for the Ebola virus to pass between patient and nurse.
Ebola has been impacting stock market prices for months, as large market-listed concerns operating mines and industrial operations in West Africa have seen their productivity severely affected as the virus ravages their workforces, or locals become too scared to report for duty. Despite this, the ‘Ebola effect’ on markets is really only exacerbating already poor performance, based on fears about global slowdown and political instability.
The end of quantitative easing in the United States this month is a significant concern to many investors, who fear that after the stimulation ends, the fundamental problems it has been masking will remain, and will cause further damage. Poor growth in the Eurozone and fresh polls in Greece showing the national radical left-wing, anti austerity party on course to win elections has also caused panic, with Greek bonds reaching a recent high. It is thought if the Syriza party takes hold in Greece, the country will inevitably crash out of the Eurozone as their government would refuse cooperation with other European states on spending.
Not everyone has lost out on recent events, though. As investors turn away from risky European bonds, they are looking more to traditional investments such as Gold, which means shares in rare-mineral mining concerns have bounced.