LAST UPDATE | 9 Mar 2020

TRADING ON THE New York Stock Exchange was halted for 15 minutes after US stocks joined a global rout on crashing oil prices and mounting worries over the coronavirus.

Trading has now resumed on Wall Street but not before the halt was forced by a 7% slump on the S&P 500 Index.

Similar crashes were observed across the world with the UK seeing more than £140 billion wiped off the value of UK companies in early trading. 

By 10am the fall had stabilised slightly but £96 billion was still wiped off the value of stocks.

The financial chaos was prompted by an all-out oil price war between Saudi Arabia and Russia sent stock markets across the world plunging.

Driving the declines was a ferocious sell-off in the oil markets, sparked by top exporter Saudi Arabia slashing prices — in some cases to unprecedented levels — after a bust-up with Russia over production.

Demand for oil has slumped after China has imposed quarantines in large swathes of the country, with many factories shuttered and millions of people in lockdown in response to the coronavirus crisis.  

While some factories have resumed production, global supply chains have already been badly disrupted in some industries.

Travel has also been hard hit, with international airlines slashing services to areas affected by outbreak, both in response to restrictions imposed by authorities and to a decline in customers.

To give context to the decline, the International Energy Agency today released a report stating that this year is likely to see the first annual decline in oil consumption since 2009.

With the slump in oil demand beginning to bite, the major producers were forced to speak to one another about a reduction in production.

Russia was, however, resistant to efforts to come to an agreement and in response Saudi Arabia slashed the cost of oil over the weekend and actually announced a ramping up production. 

“Saudi Arabia and Russia have shown a complete unwillingness to work together in this time of crisis,” explains Spreadex analyst Connor Campbell.

Unable to reach an agreement regarding an oil production cut, the Saudis slashed crude prices by their most in at least 20 years while preparing to ramp up its output, setting the scene for an all-out price war with Putin’s superpower.

Overnight, a barrel of Brent Crude oil fell 30%, settling down 25.8% at 33.60 dollars (£25.57) per barrel as European markets opened.

The 30% fall marked the worst drop since the 1991 Gulf War and the second biggest fall on record, according to Bloomberg News.

Saudi Arabia also today closed off air and sea travel to nine countries affected by the new coronavirus, further sending markets tumbling. 

“US equity markets have resumed trading following the Market Wide Circuit Breaker trading halt,” the NYSE tweeted this morning.

The NYSE president Stacey Cunningham told CNBC that the Market Wide Circuit Breakers are designed to slow trading. 

“It gives inverstos the ability to understand what’s happening in the market, consume the information and make decisions based on market conditions,” she said. 

Market collapse

The dizzying oil drop sent investors fleeing for safety alongside mounting fears over the global economic impact of the worsening coronavirus, which has seen Italy lock down a swathe of its north.

While governments and central banks have unleashed or prepared stimulus measures, the spread of Covid-19 is putting a huge strain on economies and stoking concerns of a worldwide recession.

“This will be remembered as Black Monday,” said analyst Neil Wilson at trading site Markets.com.

“If you thought it couldn’t get any worse than the last fortnight, think again. The blood really is running in the streets, it’s utter carnage out there.”

Australia has seen some of the biggest falls, with the Australian dollar shedding more than 7% of its value against the US dollar since the beginning of the year.

Today brought the steepest fall for the Australian share market since October 2008, with major energy producers worst-hit amid a crash in global oil prices. 

- With reporting by © – AFP, Press Association and and Associated Press