Stock markets across the world tumble amid mounting fears about a global recession
There were nervous scenes across London’s brokering floors today as trading screens around the globe turned red amid mounting fears about a global recession.
The FTSE 100 lost 25.83 points to 7181.76 after overnight carnage in Asia where Japan’s Nikkei fell by 3%, Hong Kong’s Hang Seng lost 2.1% and Korea’s Kospi dropped 1.92%.
The market plunges come in the wake of last week’s filthy data from leading economies such as Germany, Japan and China, and caution from the US Federal Reserve on the strength of its economy.
As a result investors have dumped risky assets and rushed from stocks and into bonds.
The stampede has seen US yields collapse with three-month government bonds now trading below 10-year debt for the first time since 2007. This shows that, at present, investors think the Fed will cut rather than raise interest rates this year.
In London, US-focused stocks were the hardest hit with industrial equipment rental company Ashtead losing 56p to 1805p, and plumbing and heating equipment seller Ferguson fell 97p to 5172p.
Asia-focused stocks and funds were also feeling the strain: Aston Martin, popular with Chinese car buyers, was down 28.6p at 1038p and Fidelity China Special Situations lost 4p to 222p.
There was no respite for oil investors either as Brent crude fell 1% to $66.42 per barrel, sending shares in BP down 2.6p to 549.5p and Shell off 7.5p to 2398.5p.
Gold was the only commodity making gains, rising to $1316 per ounce, up $3.6. This sent gold miner Fresnillo to the top of the FTSE 100 leaderboard — up 6p at 839.6p.
Downgrades were also doing their bit to dent sentiment after analysts at Jefferies questioned whether oil company Wood Group could meet its dividend payment. The business has been focusing on disposals rather than cash generation and this session it announced it would be selling another non-core business unit for $38 million (£28 million) to Cementation Americas. Shares fell 25.8p to 520p.
But there were some risers among the sea of red as medical devices-maker ConvaTec rose 4.2p to 138.4p after naming Genus chief Karim Bitar as its chief executive. The company — which makes colostomy bags — has struggled since its float in October 2016 and has been without a chief executive since a profit warning last October.
Bitar has a reputation for turning companies around and Genus shares fell 132p to 2230p as the animal genetics group said it will now have to look for a new boss.