Daily Telegraph - Markets5 Aug 2024 10:20
The global rout in stock markets has deepened as the FTSE 100 suffered its worst drop in more than a year amid fears of a US recession.
European markets were red across the board, following another brutal sell-off in Asia as Japan’s benchmark index suffered its worst day since Black Monday.
Tokyo’s Nikkei 225 closed down 12.4pc and suffered biggest ever points loss overnight - also taking its worst hammering in one day since the fateful Black Monday trading session in October 1987.
Traders are ramping up bets on an emergency interest rate cut by the US Federal Reserve next week in an effort to quell a sell-off in global markets, which has seen the FTSE 100 plunge by as much as 2.5pc in early trading and the Dax in Frankfurt fall 3pc.
Weaker than expected jobs and manufacturing figures in the US have raised concerns that the Federal Reserve has left it too late to begin cutting interest rates without damaging the world’s largest economy.
Daniela Hathorn, senior market analyst at Capital.com, said: “A lot of it comes from faith that the Federal Reserve has gone a little bit too far with its monetary policy in terms of keeping rates restrictive for too long.
“That negative sentiment has spilled over into other markets.”
Tan Boon Heng of Mizuho Bank in Singapore said: “The scenario of higher unemployment constraining spending and further restraining hiring and incomes and economic activity leading to a recession is the feared scenario here.”