Once the Dow Jones et al. got involved Wednesday’s trading took another dive southwards, following some nasty data out of the US.
The headline number was a 5.4% slump in industrial production in March – the worst contraction since 1946. Couple that with retail sales falling by a sharper than forecast 8.7% – not to mention the various recession warnings that have been coming thick and fast – and the US markets were perhaps forced to swallow a bitter dose of reality following last week’s hopeful, naive rebound.
If investors are now willing to pay attention to all this alarming data – they haven’t been too keen in recent weeks – Thursday’s US unemployment claims and Friday’s Q1 GDP reading from China could make waves.
Having briefly struck 24000 on Tuesday, the Dow Jones sank more than 600 points, the index hurtling back towards 23300 in the process.
This then had the side effect of accelerating the losses elsewhere. With Brent Crude now down 8.6%, sitting under $27.50 per barrel, the FTSE fell 180 points to 5620 – more than a fourfold increase on the losses the UK index incurred just after the bell.
As for the Eurozone, the DAX shed 400 points as it found itself barely hanging on above 10300, with the CAC slumping 3.7% to 4370.
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