US recession fears spark fresh stock market rout

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US recession fears spark fresh stock market rout

The FTSE 100 slipped on Friday (Kirsty O’Connor/PA) (PA Archive)

The global stock market rout accelerated today after

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’s Nikkei 225 endured its worst session since 1987 and the FTSE 100 index slumped 2%. The selling followed Friday’s poor

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figures in the US, which appeared to dash hopes of a soft landing for the world’s largest economy.

Tokyo’s stock market was also impacted by sharp currency moves as heavy losses for the country’s multinationals left the Nikkei 225 down by 12.5%. Traders expect a fresh wave of selling on

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later after the Nasdaq Composite closed 2.4% lower and the S&P 500 index lost 1.8% on Friday.

Poorly-received results impacted the tech sector before the weekend, leaving

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shares down 9% and Intel off 26%.

The risk averse mood also swept through the cryptocurrency market as Bitcoin slumped by 10% to $52,729.

In London,

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and the ***-focused FTSE 250 index reversed by 3%.

IG’s chief market analyst Chris Beauchamp said: “This is a perfect demonstration of what happens when everyone tries to sell at once.

“Such moves don’t stop in a single day and we likely have a summer of volatility ahead of us, particularly as we await developments in the Middle East.”

Big fallers in the

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included the tech sector backers Pershing Square Holdings and Scottish Mortgage Investment Trust after their shares fell 8%. Baillie Gifford Japan Trust reversed 7% in the FTSE 250.

Recession fears were fuelled on Friday after US payroll growth of 114,000 came in short of Wall Street’s 175,000 forecast and June figures were revised lower.

The unemployment rate also hit a three-year peak of 4.3%, above the 4.1% expected although the figure may have been distorted by hurricane disruption.

The figures prompted a sharp surge in bets on

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interest rate cuts, with markets now seeing a 200 basis points reduction over the next 12 months.

Deutsche Bank strategist Jim Reid said: “Markets were on edge before Friday but a weak payrolls figure has really escalated a profound move across the globe.”

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#recession #fears #spark #fresh #stock #market #rout

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