FTSE and Asian markets crawl back but traders remain rattled
SHARES across Europe steadied today following Monday’s spectacular Wall Street plunge, but City trading rooms remain nervous.
Yesterday, the Dow Jones regained almost half of its 1200 point tumble.
In London, the FTSE 100 was up 46 points to 7187, but brokers said volatility was likely to remain at least for the rest of the week.
City Index market analyst Fiona Cincotta said: “After three days of heavy selling and taking the lead from the US and Asia overnight, equity indices across Europe finally rebound. It is difficult to call the bottom and judge whether stocks have fallen sufficiently for investors to see value once again.”
John Husselbee at Liontrust Asset Management said: “While fear of missing out has been a driver of market exuberance, this looks to have given way — at least for now — to fear of inflation. Our view remains that the three Cs are key to shortterm market sentiment, China, commodities and central banks.
“While rising oil prices and hard landing concerns around China have failed to spook markets, fears that rising inflation may force policymakers into hiking rates quicker than predicted seems to have triggered the recent panic.”
Shares in US and Asia were at record levels. Many analysts had been predicting a correction of some sort for several months.
Economists note that most world economies are growing steadily, at least, so there is no real reason why stock markets should plunge for any prolonged period.
@SimonEngStand