Monday began to turn into another one of those sessions, investors’ fears of a global recession unshakeable despite – or maybe even because of – wave upon wave of central bank action in the last few weeks.
Under intense pressure due to a complete collapse in demand – just look at China’s 13.5% industrial production contraction – Brent Crude plunged 12.4% to $30.35 per barrel. That’s less than half of the $70 per barrel seen at the start of 2020.
This, of course, created a major headache for the commodity-heavy FTSE, especially since copper itself was down 5.3%. The UK index tumbled 6.2% as the day went on, taking it under 5000 for the first time in 8 and a half years.
In a sign of just how bad things are at the moment, that percentage decline meant the FTSE was actually one of Monday’s better performers. The DAX shed 7.8% as it sank to 8450, while the CAC really let rip with a 9.3% slump following reports that France is considering a Spain and Italy-like nationwide lockdown.
The worrying thing is, there is still the US open to come. The sound of the Wall Street bell has tended to act as an accelerator for European losses, which, given their current levels, could cause an orgy of selling.
The Dow Jones is expected to lose around 5.7% when trading gets underway, leaving it the wrong side of 21800 but above the 20400 lows struck at points last Friday.
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