THE FTSE 100 opened 1% down this morning after Donald Trump and First Lady Melania tested positive for coronavirus.
The Footsie dropped to 5,810.00 shortly after the London Stock Exchange opened at 8am, down from the 5,879.45 it closed at on Thursday.
The stock exchange has since recovered some ground and is now at 5,844.54 points, or 0.62% down, as of 10.15am.
Despite the drop, the FTSE is trading higher compared to when it crashed 10.9% in one day to finish on 5,237.00 points on March 12.
The plunge was described as the worst day since "Black Monday" in 1987, with the fall wiping £160billion off shares.
But the index is still down compared to the 6,484.300 points it registered on June 5 – it's highest mark over the last six months.
How the FTSE 100 falling affects your personal finances
FALLS in the stock market can affect your finances in a number of ways, here we explain how.
Pensions – If you save cash into a pension scheme where the provider invests your money, you'll likely see the value of your pension drop when the FTSE 100 falls.
But keep in mind that with retirement savings, you’re investing for the long-term so the drop in value isn’t likely to be permanent.
Instead, you’ll see your retirement savings grow again once the stock market recovers.
Savings and mortgages – There is no direct link between the stock market and your mortgage or savings accounts.
But if panic on the stock market spreads to the wider economy, the Bank of England may cut interest rates – and it's done so twice in recent weeks.
This means your mortgage is likely to get cheaper, while savers will suffer from lower interest rates.
We’ve explained how the interest rate cut will affect your finances here.
Sterling – The value of the pound often rises if the FTSE 100 falls, as many of the firms on the index earns a significant amount of cash in the US.
But this hasn't been the case recently as markets around the world are in "panic mode", Jeremy Thomson Cook, chief economist of Equals, said a couple of weeks ago.
He added: "Sterling is caught in the middle; a currency that has lost its haven status courtesy of Brexit while investors hold dollars as the global reserve currency."
The FTSE 100 consists of shares from the 100 biggest companies by market capitalisation on the London Stock Exchange – so it's performance is often seen as an indicator of business activity in the UK.
We explain how changes in the stock market can affect your finances in the box above.
As well as the President testing positive for coronavirus, market commentators suggest stocks may have also been spooked by weak oil prices.
At the time of writing, the price of Brent crude oil and West Texas Intermediate was down 3%.
It was better news for the pound though, as sterling was trading $1.2934, up 0.38% compared to yesterday.
Against the euro, the pound was trading €1.1048, up 0.76%.
Russ Mould, investment director at AJ Bell, said: "Donald Trump catching coronavirus has put the markets in a mild state of disarray. One could view the market reaction as investors increasing the probability that Biden will win the election.
"Oil prices were also weak on Friday, two signals that suggest the latest decline in equity markets may not entirely be caused by Trump testing positive.
"This commodity is an economic bellwether and a decline in the price could be a red flag that the global economic recovery faces some near-term headwinds."
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