Red Haze Across Global Markets

Tuesday, 6 February: The global sell off continued for a fourth day, as a turbulent overnight trade in Asia extending losses and feeding through to European indices to open Tuesday trade in the same negative fashion. Those who avoided the losses on the main UK index were few and far between, with no individual stock ending the day with >1% gains. The FTSE did recover from c.3% losses at the open, building up to -1% losses intra-day before selling off again to close down by 2.64%. Tesco and easyJet managed to escape the wrath of investor woes to close slightly higher. Meanwhile, in Europe the CAC 40 and DAX closed -2.35% and 2.48% respectively.

In the US, futures pointed to a steep decline at the open, however, these were sharply reversed as markets climbed. Demonstrating the high volatility across the day, major US markets have fluctuated between reversal and gains over the course of the afternoon. The Dow Jones is currently in +0.3% while the S&P 500 sits 0.1% lower.

After initially benefiting from the steep falls in equity markets, Gold failed to add to gains as a stronger dollar pared back the safe haven’s climb, spending most of Tuesday flirting between small gains and losses as the US dollar recorded slight gains, although these were then eroded to the greenback falling slightly against major currencies at the time of writing. As global economic data remains strong, the lack of traction in Gold potentially demonstrates investor confidence that stock-market declines are set to be short-lived.

In more stock specific news, BP have announced annual profits more than doubling in 2017, benefiting from the rising price of crude oil which hit $70/bbl in early January for the first time since December 2014 following OPEC efforts to cap production. The oil giant opened 7 new oil and gas fields in 2017, with oil production rising 12% to 2.47m barrels of oil per day. BP closed -1.46% after suffering from its first quarterly loss since mid-2016 due to charges from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico and the recently announced tax overhaul in the US.

Stagecoach are set to end their contract of running the East Coast Mainline “earlier than expected”, only 3 months after announcing they are set to withdraw from running the service in 2020, after “getting its numbers wrong”. Transport Secretary Chris Gayling has said Stagecoach would continue running the service from Edinburgh to London “for a small number of months and no more”, adding the government may step in to run the service. It is claimed the day-to-day operation of line would be unaffected, great news for those who suffer daily delays and inconvenience.

Leave a Reply