FTSE 100 set for another bloody session after US interest rate cut to near zero sends markets into panic mode

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FTSE 100 set for another bloody session after US interest rate cut to near zero sends markets into panic mode

The FTSE 100 looks set to open in the red again after the US Federal Reserve’s decision to cut interest rates to near zero sent a wave of panic across Asia’s main markets.

Global recession would also seem to be a cast iron certainty, with China revealing the early economic scars from the coronavirus.

Industrial output hit its lowest level on record, retail sales fell by a fifth and urban unemployment was the worst on record, according to official figures.

The Hang Seng and Shanghai Composite were 3.7% and 2.3% lower respectively. China-reliant Australia saw the ASX200 tumble an almost unprecedented 9.7% in a bloody opening to the week.

“The bigger question now being asked is how much further do these declines have to go in the wake of the prospect that we’re on the cusp of coming to a juddering halt for the global economy,” said Michael Hewson, analyst at CMC Markets.

“This in turn will plunge most of the global economy into a sharp recession. 

“Barely a month ago, markets across the globe were trading at, or within record or multi year highs, on misplaced optimism that this outbreak might be contained.

“Now here we are a month later, and it’s hard to envisage how we might get back anywhere close to these levels.”

Before the Fed pre-empted the meeting, Wednesday’s update from America’s interest rate setters was to be the big set-piece event.

Now we are looking at largely home-grown fodder.

Morrison’s (LON:MRW) and Ocado (LON:OCDO) will tell us whether the grocers have been net e beneficiaries of coronavirus panic buying, while Next’s (LON:NXT) online presence should act as a partial buffer to the dry up in High Street spending.

Around the markets: Pound worth US$1.2322; gold trading at US$1,542.70 an ounce, up US$26; Brent crude changing hads for US$32.27 a barrel, down US$1.58.

Monday’s significant corporate news

Finals: Diaceutics PLC (LON:DXRX)

Interims: Ceres Power Holdings (LON:CWR), Cap-XX Limited (LON:CPX), Volution Group PLC (LON:FAN)

Proactiveinvestors.co.uk

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