FTSE 100 down: Markets in the RED on global economy SLOWDOWN fears and US recession worry
Shares across Europe and Asia were in the red earlier today as investors were left on edge from mounting fears over the state of the global economy. The benchmark UK share index slipped to 7.149.50 shortly after the open before recovering some initial losses to 7,200.76 just after 11:00AM UK time. The FTSE 100 bounce-back came after the release of better-than-expected German confidence data, which came as a surprise to investors after weak manufacturing data fuelled concerns over the state of Europe’s largest economy. The German IFO expectations survey rose to 95.6, while the business climate index rose to 99.6, and both of these better than forecast figures were the highest readings in three months.
In Germany, the DAX was down 0.14 percent at the same time of writing.
The CAC 40 in France had lost 0.15 percent.
Meanwhile, the FTSE 250 was at one point down to its lowest since mid-February.
CMC Markets analyst Michael Hewson said: “Having seen a decent recovery from the lows at the end of last year, global stocks appear to have run out of steam, if Friday’s sharp declines are anything to go by.”
Having seen a decent recovery from the lows at the end of last year, global stocks appear to have run out of steam, if Friday’s sharp declines are anything to go by
Michael Hewson, CMC Markets analyst
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.4 percent in a broad sell-off in equities in the region.
The Nikkei in Japan tumbled 3.2 percent, while South Korea’s Kospi index declined 1.6 percent and Australian shares faltered 1.3 percent.
Chinese shares also declined with the blue-chip CSI 300 index down 0.8 percent.
Concerns about the health of the world economy heightened last week after cautious remarks by the US Federal Reserve sent 10-year treasury yields to the lowest since early 2018.
US 10-year treasury yields were last 1.9 basis points below three-month rates after yields inverted for the first time since 2007 on Friday.
Analysts have often seen an inverted yield curve – where long-term rates fall below short-term – as a sign of an recession looming.
Concerns over a US recession saw the Dow Jones end the trading week 460 points down on Friday.
JPMorgan analysts said in a note to clients: “The bond market price action is an enormous blaring siren to anyone trying to be optimistic on stocks.
“Growth, and bonds/yield curves, will be the only thing stocks should be focused on going forward and it’s very hard to envision any type of rally until economic confidence stabilizes and bonds reverse.”
Shares in Britain have also been impacted by ongoing uncertainty from Brexit, with Britain’s departure from the European Union still posing questions for investors.
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