Bitcoin and US tech stocks hammered as global flight from risk intensifies | Business News

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Cryptocurrencies and US tech stocks were taking a hammering on Monday night amid a continuing flight from risk as a toxic cocktail of worries for the global economy grip investors.

Values ​​for so-called growth assets have been falling particularly sharply since the day after the US Central Bank raised interest rates last week by 0.5% and signaled more were on the way as policymakers across the world battle the effects of surging inflation.

There are also growing worries that the inflation problem – made worse by Russia’s invasion of Ukraine – will result in recession for major economies as the Bank of England warned, last Thursday, was a growing risk for the UK.

There was a broad-based sell-off globally on Monday, also aided by a tightened COVID lockdown in Shanghai and heightened curbs in Beijing.

While that forced down oil costs, with Brent crude falling 6% on expectations of lower demand, it meant that BP and Shell led the FTSE 100 in London down by 2.3%.

There were similar falls across European markets though the tech-focused Nasdaq on Wall Street was 4% down in late trading.

Analysts said it meant US stocks were on course to collectively deliver their lowest level of value for more than a year.

Investors have been stripping cash from the darlings of the pandemic era this year amid fears they are over-valued when faced with an easing of public health restrictions in the West and rising interest rates.

Crypocurrencies have felt big pain too.

Bitcoin, which hit a high of $69,000 last November, has since crashed to trade at little over $30,000 as of Monday evening, according to data from Refinitiv. It was more than 15% down on Friday’s figure.

The FTSE 100, which has outperformed most global stock markets this year after it lagged the general recovery for values ​​during 2021, saw its strong list of mining constituents come under renewed pressure on Monday.

It is just over 2% down in the year to date while the Nasdaq has lost a quarter of its value.

As a majority of its constituent companies are export-focused, the UK’s top flight index has been less exposed to the reaction generated by the Bank of England’s update when it warned of inflation above 10% by the year’s end and the possibility of a recession ahead .

The pound has felt the bulk of the pain instead – hitting lows versus the stronger dollar not seen since the early days of the pandemic at around $1.22. It is also three cents lower versus the euro over the past week.

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