12.01pm – UPDATE – FTSE fatigue
The FTSE 100 is down at 7,167.05 a fall of 167.93 points.
The FTSE 250 has fallen a long way to 19,290.03 a loss of 400.46 points on the day so far.
11.45am – UPDATE – Bloody morning for FTSE
Conor Campbell from SpreadEx said: “Despite the bloody scenes there wasn’t exactly a lot to talk about this Tuesday morning – any semblance of nuance got tossed out the window as the Dow Jones plunged more than 1000 points last night.
“The European indices settled into a uniform decline as the day went on, with the FTSE, DAX and CAC all down 2.1 percent.
“The prospect of the Dow Jones falling a further 450 points when the bell rings on Wall Street is keeping those losses at stomach-churning levels – and the worry is that the Dow’s decline will only gather pace as the session goes on, much like it did last night (remember just after the US open on Monday the Dow was only down half a percent or so).
Concern at the LSE
11.08am – UPDATE – FTSE fighting back?
The FTSE 100 stands at 7,211.64 a fall of 123.34 on the day so far.
10.16am – UPDATE – Dow Jones does its best bitcoin impression and Europe follows suit
James Hughes, Chief Market Analyst, AxiTrader, said:
“This morning we have seen Europe follow suit by posting big downside losses with the FTSE and Dax both down over 3 percent.
“Dow futures are also showing signs that this downside is likely to continue into Tuesday’s session with the Dow already down another 400 points.
“There is very little due out on a macroeconomic front today, which is actually bad news. In situations like this we would want to find something to take the attention away from the downside, and maybe see a positive number.
“One thing to remember about the recent falls is that the economy is in a good place in the US, with Christine Lagarde only raising the outlook for global GDP two weeks ago in Davos. The question will be asked whether this is a market correction or a something more sinister for the global economy?
“A 1000+ fall will give people flash backs of 2007-2008, however economically we are not in the same position so I do not think that is a fear. So far this is just a long awaited stock market correction, one that could have a lot further to go. When an asset flies higher in value so aggressively, the fall is always equally as quick.”
9.54am – UPDATE – Analysis – ‘more a sobering correction than a rout’
Jacob Deppe, Head of Trading at online trading platform, Infinox, said: “While the fall in global equity markets looks dramatic, it is no more dramatic than the record rises we have seen since the end of November. For that reason alone many would argue a correction was on the cards.
“The party may be over for now but this could be more of a sobering correction than a rout.
“Meanwhile, aside from the FTSE 100, which is populated by a large number of Dollar-denominated firms, there’s little economic reason for the contagion to spread to other European indices.
“There is no indication that the European Central Bank (ECB) is prepared to raise interest rates or bring its monthly bond buying programme to an end early. In fact, ECB President Mario Draghi’s speech on Monday indicated the exact opposite.
“And despite some forecasts that we might see a UK rate hike in the Spring, Brexit negotiations, if nothing else, will stay the Monetary Policy Committee’s (MPC) hand.”
What a day! The City of London is having a day to remember
9.45am – UPDATE – Finger hovering
The FTSE 100 is at 7,218.82 down 116.16 on the day so far.
The BBC’s Economics editor Kamal Ahmed says that “fingers are hovering over the ‘sell’ button.
Adding: “And once investors start looking at their portfolio and selling out of the froth, automatic algorithmic trading tends to ‘chase the dip’.”
9.42am – UPDATE – Analysis on a bad day
Peter Garnry, Head of Equity Strategy at Saxo Bank, said: “The low volatility regime is likely dead – 2017 and early 2018 were a crazy anomaly.
“So far the blow up is scary but has been relatively contained. This is the largest two-day selloff since the flash crash of August 2015.
“A 12 percent top-to-bottom move in S&P 500 futures is likely the product of a chain reaction that started last Friday when unexpectedly strong US wage growth figures pushed US rates higher. S&P 500 futures are now up 2.6 percent from their lows.”
9.04am – UPDATE – Why is this happening?
In short, investors move from stocks to bonds after US job data sent intetest rates north.
The US stock market sell-off gained pace on Friday when the US Labour Department released employment numbers which showed stronger growth in wages than was anticipated.
CMC Markets analyst Michael McCarthy told the BBC that the wage numbers “blew lower interest rates out of the water”.
“The share selling….reflects a higher than previously anticipated interest rate environment.”
Investors then moved to sell out of stocks and put money into other assets like bonds which benefit from higher interest rates.
Erin Gibbs, portfolio manager for S&P Global Market Intelligence told the BBC: “This is concern that the economy is actually doing much better than expected and so we need to re-evaluate.”
8.50am – UPDATE – European rout continues
It’s not just the FTSE – European stock markets look like having their worst day since the Brexit vote as the global equity rout continues.
In Germany, the Dax index is down 3.4 percent, while in France the Cac 40 index has fallen 3.2 percent.
The Stoxx 600 index of Europe’s biggest companies has dropped by over 3.1 percent this morning.
Concern at the LSE
8.38am – UPDATE – Correction, not a collapse (yet)
The UK’s FTSE 100 gained 7.6 percent last year and many analysts say that this is not yet a crash, but a timely correction.
Yesterday, James Hughes of AxiTrader said: “Stocks look like they are set for a correction of some sorts after huge losses over the last few sessions that has left many bulls worried that the bull run may have come to an end.”
8.23am – UPDATE – Big fallers
Scottish Mort are the biggest fallers on the day so far.
The investment trust has lost 6.17 percent so far today.
8.20am – UPDATE – 7 percent
After hitting its record high in early January, the FTSE 100 has now lost 7 percent of its value so far this year.
8.02am – UPDATE – FTSE OPENS DOWN 3.5 percent
Trading starts at the London stock market and the benchmark FTSE 100 index has opened down 253.95 points, or 3.5 percent, at 7,081.03.
7.53am – UPDATE – More losses expected
The FTSE is set to open a huge 4.7 percent down according to online trading company IG.
It was a harrowing day’s trading for the UK’s blue chip firms after more than £27 billion was wiped off the value of London’s top-flight index as a sell-off ripped through global markets, culminating with a huge slump in the Dow Jones.
The FTSE 100 lost 1.4 percent as it fell to its lowest level in around two months.
This session was the fifth consecutive day of losses for the index, its longest losing streak since November, in a broad-based sell-off where only a handful of stocks were trading in positive territory.
The Nikkei closed down 4.7 percent
After dipping by 7.1 percent, Japan’s Nikkei 225 index bounced back a tad to finish on -4.7 percent at 21,610.24 points.
In Australia, the ASX200 ended the day down 3.2 percent, with the All Ordinaries was down 3.23 percent.
The Aussies lost A$60 billion from the index.
The FTSE fall is a ‘correction’ and not a ‘collapse’