You are here: Home - Investing - Experienced Investor - News -

Recession ‘almost inevitable’ as FTSE 100 plummets  

0
Written by:
09/03/2020
The UK blue-chip index plummeted in early morning trading after oil prices plunged and fears around coronavirus intensified.

The FTSE 100 index opened at 6,462.55 and immediately fell by just over 8%.

More than £130bn was wiped off the value of the companies listed on the FTSE 100.

Crude oil prices fell overnight after Saudi Arabia started a price war with Russia. The price of a barrel of crude oil fell to near $30, one of its biggest daily falls on record.

Global stock markets have been suffering bouts of volatility not seen since the 2008 financial crisis over the past fortnight due to the coronavirus outbreak.

Ayush Ansal, chief investment officer at Crimson Black Capital, said: “The FTSE’s collapse on Monday morning shows the markets have passed from panic mode into pure hysteria.

“Markets were at breaking point before Saudia Arabia’s decision to launch an oil price war, but this latest development has taken them beyond that.

“Any positive news around the coronavirus is being ignored outright, while negative developments are being catastrophised.

“Markets will always be irrational but Monday morning saw the end of reason.”

Recession inevitable

Nigel Green, chief executive and founder of financial advice firm deVere Group, said a global recession is now “almost inevitable” this year.

He said: “Every major stock market is getting hammered as oil prices plunge due to a price war following the breakdown of Saudi Arabia’s oil-cutting alliance with Russia over the weekend.

“This is an issue that will not be resolved overnight and it can be expected to have far-reaching consequences.

“It comes as the world scrambles to deal with the market mayhem and economic fallout caused by the relentless global spread of coronavirus.

“With the combination of the implications of the oil stand-off and the outbreak, I now believe that it’s almost inevitable that there will be a global recession this year.”

Adrian Lowcock, head of personal investing at investment platform Willis Owen, said: The scale of the fall means the UK has entered bear market territory for 2020, and only an end to coronavirus panic is likely to reverse its trajectory as confidence has completely evaporated.”

What should investors do?

The overall message to investors is not to panic.

Helal Miah, investment research analyst at The Share Centre, said: “For investors who have structured their portfolio well then the only thing to really do is sit tight. Markets will recover over the medium to longer term which is what investors should be targeting as trying to be active in choppy markets could cause even more damage.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

Low-income pensioner? You could gain £3k top-up

Hundreds of thousands of retirees struggling with a low income are missing out on Pension Credit worth £3,300...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week