The London stock market has witnessed its largest drop since November 2008 after traders were unnerved by new fears of a global recession and by the European leader’s sluggish reaction to the Eurozone debt crisis.
Every stock in the FTSE 100 fell
Every stock in the FTSE 100 index fell in a depressing day of trading, with not one stock able to find itself in the risers board showing how bad the reaction has been to the news today.
As world markets panicked and retreated the FTSE 100, UK’s leading index, fell by 4.5% a drop of 239.4 points finishing the day on 5092.2. Today £62.3m was wiped away from the value of the UK’s 100 biggest companies with banks and miners being affected the most and thus influencing the rest of the market.
The increasing concern regarding the outlook for the world’s economic growth and the ability of the political leaders in the eurozone to the protect the region remained in doubt and the new proposals for a trading tax to be created on transactions continued to cast a dark cloud over the financial markets.
The threatening fluctuations of the previous week which appeared to have eased down look as if they are turning into a full blown move down for the FTSE 100.
Concern for the world’s first and second biggest economies
The concern about the world’s biggest economy were again at top level with an increase in the number of US jobless claimants back above 400,000, inflation also achieved its biggest gain since March. Another sting in the tail was the news that China’s central bank is set to raise interest rates and this could dent the demand in the world’s second largest economy which itself is having internal problems.
“Volatility is certainly ebbing out of equity markets right now. With the flow of corporate news slowing too. Volumes could well remain subdued in the near term.”