The FTSE 100 is down 2% on diminishing Fed talk and renewed virus fears

[ad_1]

The FTSE 100 fell 143 points at the open as oil reached its lowest level since May

8.20 a.m.: ex-divs between the fallen

The market is not helped by a large number of stocks – 13 unlucky as it happens – go without profits.

Among those companies, Phoenix Group Holdings PLC, which fell by 4.61%, M&G PLC, which fell by 4.33%, and Abrdn PLC, which fell by 3.78%.

On the positive side, Richard Hunter, Head of Markets at Interactive Investor, said: “Despite a wall of anxiety forcing investors up and another weak round of opening trades, major indices remain comfortable in positive territory for the year, with the FTSE100 remaining 2% ahead. 9% and the FTSE250 Index at 15%.”

8.12 a.m.: Leading stocks rattled at open

Markets have certainly been shaken by the growing possibility that the Federal Reserve will ease its support for the economy, as evidenced by the minutes of the recent central bank meeting.

Falls on Wall Street and Asia are frequent in Europe, with the FTSE 100 dropping 143.13 points, or 2%, at the open to 7,026.19.

The locally focused FTSE 250 Index is also under pressure, falling 1.32%, or 313.74 points, at 23,522.63.

It’s not just the Federal Reserve that is causing concern, however, as analysts worry about a spike in COVID-19 cases around the world.

One of the symptoms of this is the continued decline in oil prices. They are down for the sixth day in a row, their worst losing streak since February of last year.

The spread of variable delta has renewed concerns about another slowdown in the economy and thus lower fuel demand.

This was underlined by the sudden rise in US gasoline stocks, which increased by 696,000 barrels last week, the first increase in more than a month.

“US official crude inventories are down more than expected, as are distillates, but traders chose to focus on the unexpected rise in gasoline stocks,” said Jeffrey Haley, senior market analyst for Asia Pacific at OANDA.

“Oil markets usually tend to pick the data they want to match their preferred narrative with official crude oil inventories. The fact that they are focusing on rising gasoline inventories confirms growth/recovery concerns and underscores this as the prevailing market sentiment.”

So Brent crude fell 1.69% to $67.08 a barrel, its lowest since May.

6.45 a.m.: Leading stocks under the couch

Thursday’s FTSE 100 is set to start trending backwards as equity markets eased sentiment after the Federal Reserve’s policy meeting minutes confirming the travel trend toward stimulus cuts.

London Leading Stock Index is seen down around 60 pips with IG Markets CFDs ticking from 7,084 to 7,087 with just over an hour remaining until the open.

The central bank asset purchase appears to be over, although the guessing game continues regarding market expectations regarding timing as most commentators are forecasting either Q4 2021 or Q1 2022 depending on the relative strength of major US economic indicators.

“The Fed’s minutes last nights did not add anything significant to the aggregate knowledge about the future intentions of central banks regarding monetary policy that was previously unknown,” said Michael Hewson, an analyst at CMC Markets.

The analyst added: “The minutes certainly do not alter the expectation that tapering is on its way, and the now accepted wisdom is that discussions about tapering are likely to begin soon, with a slowdown in purchases starting sometime in the fourth quarter, despite concerns about some Weakness in more recent data, particularly retail sales and consumer confidence.”

On Wall Street, all US stock indices were lit up in red.

The Dow Jones fell 382 points, or 1.08%, to close at 34,960 while the S&P 500 similarly fell 1.07% to end Wednesday’s session at 4,400.

The Nasdaq lost 130 points, or 0.89%, to 14,525 and the Russell 2000 index focused on small businesses shed 0.84% ​​to 2,158.

In Asia, Japan’s Nikkei fell 0.67% to 27400, Hong Kong’s Hang Seng fell 1.4% to 25505 and the Shanghai Composite fell 0.24% to 3477.

About the markets

Pound: $1.3715, down 0.3%.

Gold: $1,778 an ounce, down 0.51%

Silver: $23.26 an ounce, down 1.05%

Brent crude: $67.40 a barrel, down 2.3%

West Texas Intermediate: $64.45 a barrel, down 3.2%

Bitcoin: $44,474, down 1.96%

Ethereum: $3,012, down 1.93%

6.50 a.m.: Early Markets – Asia/Australia

Shares in the Asia-Pacific region fell on Thursday as Australian mining stocks fell after an overnight drop in iron ore prices.

Rio Tinto shares are down 5.95% while () shares are down 6.78% and BHP shares are down 6.38%.

Australia’s S&P/ASX 200 is down, with the index trading 0.33% lower.

China’s Shanghai Composite fell 0.2% and Hong Kong’s Hang Seng fell 1.41% as regulatory concerns continued to weigh on investor sentiment.

In Japan, the Nikkei 225 is down 0.73% while the Kospi in South Korea is down 1.30%.

Read our ASX report here

[ad_2]