Blue-chip shares plunge at the open in a bloody start to 2019 but regain some ground as a rollercoaster session for FTSE 100 plays out
- The FTSE 100 sunk nearly 2% after the bell in early trading to 6,601
- By midday on Wednesday the index had recovered some ground to reach 6,682
- The London market suffered its biggest fall in a decade in 2018 – down 12.5%
- Global markets have been soured by weak economic data from China
The Footsie got off to a sorry start to 2019 today, sinking like a stone in the first trading session of the new year.
The London-based index shed nearly 2 per cent of its value after the bell to briefly skim 6,600 – close to the two-year lows it hit in the week before Christmas.
It regained some ground as the morning’s session progressed, however, reaching 6,682.51 by lunch time – down just 0.7 per cent.
The FTSE 100 lost nearly 2 per cent in early trading today after a sell-off in Asia
As the session progressed, the blue chip index recovered some lost ground
Far from delivering a Santa Rally in December, markets crumbled in the run-up to the holidays. This rounded off a disappointing 2018 for investors, during which the FTSE 100 lost 12.5 per cent of its value, its biggest annual fall for a decade.
2019 looks set to be an equally frustrating year for stock market investors as tensions between the US and China rumble on.
This morning’s fall was triggered specifically by weak manufacturing data out of China, which added to concerns about a global economic slowdown in 2019.
The country’s Caixin PMI came in at 49.7, signalling contraction for the first time in a year and a half.
Markets.com senior analyst Neil Wilson said: ‘This is not a good indicator as we eye tariffs biting even harder in 2019 than they did last year.’
Weak oil prices soured the markets further with the FTSE 100’s big miners and oil producers suffering the biggest losses on Wednesday morning, along with banks and insurers.
The slump in the London market followed a sharp sell off overnight in Hong Kong, with the Hang Seng Index closing down 2.9 per cent, while China’s CSI coughed up 1.4 per cent.
Investors are bracing for another volatile year in the markets as trade war tensions mount
Although the Footsie has stemmed some of the decay morning, it is still tracking well below its key long term support level and ‘already starting to call for a retreat to 6500’, Wilson added.
He warned that there could be worse to come too.
‘Following the worst year in a decade for global equities, it’s little surprise to see a tentative start to 2019 and this does create opportunities, but investors should be prepared for more volatility ahead,’ he said.