Blue chips blush as recession fears mount: FTSE, Dow, S&P 500, Nasdaq, Dax, CAC 40 and Nikkei all plummet on the first trading day of September
Global equity markets began September with a widespread sell-off as growing fears of a recession hit stocks.
The FTSE 100 ended the first session of the month down 1.9 percent or 135.65 points at 7148.5.
the lowest in seven weeks and the more domestically oriented FTSE 250 fell 3 percent or 570.01 points to 18,493.74.
September slump: The FTSE 100 ended the first session of the month down 1.9% from its lowest level in seven weeks and the more domestically oriented FTSE 250 fell 3%.
The gloomy mood on Wall Street continued in early trade as the Dow Jones Industrial Average fell 0.2 percent, the S&P 500 fell 0.7 percent and the tech-heavy Nasdaq fell 0.4 percent.
It looked similarly bleak on the continent, Germany’s leading index Dax closed by 1.6 percent and the French CAC 40 by 1.5 percent.
Asia also posted losses, with Japan’s Nikkei 225 down 1.5 percent and Hong Kong’s Hang Seng index down 1.8 percent.
Traders are growing concerned about the prospect of further rate hikes by central banks following last week’s Jackson Hole conference in Wyoming, US.
At the gathering, Federal Reserve Chair Jerome Powell said the Federal Reserve would “stick to it” to bring down inflation and announced stronger interest rate hikes, warning that lowering inflation has “unfortunate costs” after would drag.
Peter Garnry, head of equity strategy at investment firm Saxo Bank, said global equity markets rallied in June and August as investors became convinced the world was “turning a curve for the better in terms of inflation” and that the Rate hikes could begin to slow down so as not to derail the economy.
But he said the “door to reality” finally opened after Powell’s speech.
“The Jackson Hole conference made it clear to the market that inflationary pressures are still way too high,” Garnry said.