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05-Feb-2018
FTSE 100 tumbles to eight-week low
Yahoo! Finance (UK)
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9:10AMStocks sell-off intensifies as market volatility returns
Great intellectual exercise going on on CNBC as to why markets have fallen quite sharply. I
think it is quite simple. Valuations were very rich after a massive rally in January. A
correction is healthy, exacerbated by threat of inflation and a potentially higher interest
rates!
— David Buik (@truemagic68) February 5, 2018
After the Dow Jones suffered its worst plunge since June 2016 on Friday, European and
Asian stocks across the board have slipped into the red this morning.
Safe havens gold and yen are fairly stagnant this morning, suggesting that the sharp move
lower has not been caused by a "major risk-off collapse in sentiment", according to ETX
Capital analyst Neil Wilson.
He added:
"So for now it’s an equity storm, created by the pressure from bonds, but still a fairly
localised one. We’ll have to see the Dow back at 24,000 for this to be a full-on correction."
Volatility returns to the markets
Market volatility has soared back to a 19-month high after sinking to all-time lows at the end
of 2017. Since tumbling to just over 9 points, the VIX Index, also known as the Fear Index,
has soared 101pc to 18.40 points, its highest level since July 2016. 8:42AMRyanair
launches £662m share buyback but forecasts 'adverse PR' aheadRyanair has launched a
€750m (£662m) share buyback and sought to reassure shareholders that it is equipped to
remain Europe’s biggest low-cost airline after caving in to a unionisation drive from pilots.
Staff costs will increase by €45m this year as the Irish company lifts pay for its flight crews,
and there may be further disruption to operations as the pilot dispute plays itself out,
Ryanair said in a statement on Monday.
The carrier pledged to remain the most competitive in Europe, saying extra-dense Boeing
737 Max planes will help retain that advantage.
“After 30 years of successfully dealing directly with our people it became clear in December
that a majority of pilots wanted to be represented by unions,” said chief executive Michael
O’Leary, adding that the decision to ground planes in order to cope with rostering issues
that triggered the spat had been a “painful” one. 8:31AMAgenda: as markets gripped by
fears of rising interest ratesStory ContinuesThe FTSE 100 has tumbled to an eight-week low
after global stocks plunged on fears that central banks could soon accelerate plans to
tighten monetary policy.
Rising US Treasury yields caused a sharp pullback in US stocks on Friday and European
markets are still feeling the ripples from the investor jitters this morning.
An acceleration in wage growth in the US indicating that inflation could soon push higher
and force the hand of the Federal Reserve on interest rates sparked the jitters on bond and
stock markets. The FTSE 100 has shed 1.2pc early on with the DAX in Frankfurt and CAC
40 in Paris also sliding over 1pc apiece.
Global equity slump deepens as rate fears grow. Asia shares in largest daily fall since late
2016. 10y Treasury yield rises to 4y high, around 2.87% as inflation shadow spooks bonds.
Emerging markets pressured as borrowing costs rise globally.
pic.twitter.com/QXhkpZWURN
— Holger Zschaepitz (@Schuldensuehner) February 5, 2018
Elsewhere, the sell-off in Bitcoin has extended into the new week after Lloyds Bank banned
its customers from using its credit cards to trade cryptocurrencies amid concerns that UK
investors are racking up huge debts.
After fears of regulatory clampdowns in the US and India wiped as much as $250bn off the
cryptocurrency market in last week’s plunge, news that Lloyds Bank, Bank of Scotland,
Halifax and MBNA customers will be affected by the changes enforced today caused Bitcoin
to slump 7.5pc to below $8,000. Full-year results: Randgold ResourcesTrading statement:
Electrocomponents, RyanairEconomics: Services PMI (UK, US & EU), Retail sales (EU)