FTSE 100 falls to seven-month low amid Europe-wide sell-off of stocks
The FTSE 100 fell to a seven-month low this morning as a Europe-wide sell-off of stocks saw shares drop 1.1 per cent.
The index opened below the 7,000 mark today as investors were rattled by world events including Italy’s expansionary budget, Brexit, Saudi oil prices and a poor run of third quarter results this morning.
It later fell to its lowest since March, before recovering some of its losses to find itself down 51.94 points, or 0.74 per cent at 6,990.86.
Meanwhile Asia shares slumped by up to three per cent this morning amid a wider sell-off of shares in Europe and Asia.
“The sell-off has resumed across markets, as yesterday’s brief bounce passes quickly into history,” said Chris Beauchamp, chief market analyst at IG.
Fallers today include Whitbread, whose impending sale of Costa coffee leaves it to focus on Premier Inn, while BAE, Aveva and BT are all down.
“Utilities and precious metal stocks are in favour in London as investors look for the usual safe havens,” Beauchamp added.
“Whitbread’s fall would probably have occurred without the general market rout, since it now faces a tougher future without Costa Coffee and its oddly-compelling hold over the UK coffee market.”
Laith Khalaf, senior analyst at Hargreaves Lansdown, said the investment firm’s investor confidence marker has sunk to a 23-year low.
“Investors are in grim mood, as time is running out on Brexit negotiations with little progress on show. Sentiment was dented by the financial crisis, but not to the extent we are seeing today,” he said.
“That’s perhaps because the crisis unfolded in an unscheduled fashion, while the timeline on the UK’s withdrawal from the EU is there for all to see. A looming early Budget and a stormy October on the markets will do little to settle nerves.
“These are challenging times for investors who are faced with a significant known unknown in the form of Brexit. In such circumstances, it’s worth falling back on the basics of investing. That means taking a long term perspective, keeping diversified, and drip feeding money into the markets to take advantage of any dips.”
But Beauchamp added that there will be some bargain stock purchases to be made for the savvy investor.
“At times like this, when the sky seems to be falling in, it is important to note that these kind of sell-offs usually result in some great bargains, it is the timing that is the tricky thing,” he said.