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22nd of October 2018

Economy



Europe markets in CHAOS: Europe SLUMPS as FTSE 100 drops to new SIX-MONTH low

As of 15:10 GMT, the UK stock index had clawed back gains to reach 7,069.39 – down only 1 percent.

The pan-European Euro Stoxx 600 Index was down by 1.2 percent in early deals.

In Italy, where markets have been rattled by the fallout from the government’s deficit budget proposals, the FTSE MIB had tumbled by 1.5 percent.

Paris saw its Cac 40 share index fall 1.2 percent earlier today, while in Germany the Dax index sunk by 0.9 percent.

Back in the UK, WH Smith shares plummeted more than 12 percent after the British chain announced plans to restructure its stores.

Recruitment agency Hays saw a decline of over 11 percent.

British fund supermarket Hargreaves Lansdown was also among the big losers of the day, retreating 4.8 percent.

The chaotic start for traders in Europe comes after the US stock market plunged last night, as Wall Street witnessed its sharpest one-day fall in months.

The Dow Jones Industrial Average dropped by more than 800 points, while the S&P 500 fell to a fifth-day straight loss.

Markets in Asia also suffered, with Japan's benchmark Nikkei 225 losing 3.9 per cent – logging its biggest daily drop since March.

While in China, the Shanghai Composite ended the day down 5.2 percent.

The global market chaos comes as investors continued to be spooked by rising interest rates and fears surrounding global economic growth.

The Federal Reserve is raising interest rates which makes it more expensive for companies to borrow and harms share prices.

The rout suggests businesses are not able to sustain the runaway growth that is marked 2018 so far.

Investors are nervous a trade war would slash profits.

While in Europe, the eurozone has been squeezed after Italy unveiled a deficit target of 2.4 percent of gross domestic product (GDP) next year.

The announcement unnerved investors and sparked sharp swipes from EU chiefs, with the target being triple the previous goal for heavily indebted Rome.

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