FTSE tumbles in global stock rout, Cryptos lower

imageEconomy9 hours ago (Jul 08, 2021 16:30)

© Reuters.

Key Points

  • FTSE 100 closing price of 7034.04, -1.64%
  • Stocks fall in global rout
  • Yields drop on growth fears
  • Oil falls as markets digest OPEC+ decision
  • Bitcoin falls below $33,000

By Samuel Indyk

Investing.com – The FTSE 100 tumbled on Thursday alongside a sell-off in most of the major global stock indices. The blue-chip index dropped back below 7,000 for the first time since 21st June amid fears that the global economic recovery could be set to stall, although closed back above that level.

Part of the fear of a slowdown stems from an increase in Covid cases in Asia and the UK, the latter of which has had one of the most effective vaccination programmes in the world.

Meanwhile, the decline in yields, particularly in the US may also be spooking some investors. Banking stocks, including Lloyds (LON:LLOY), Barclays (LON:BARC) and NatWest (LON:NWG), have been weak amid the falling global yield picture which has seen the United States 10-Year drop as low as 1.25%. Earlier this year, traders were spooked by the prospect of rising yields, with many calling for 2.0% in the 10 year amid fears of runaway inflation.

In individual stocks news, Entain (LON:ENT) was one of the better performers and lone bright spots after the company said was upbeat regarding recent performance. The company said it was experiencing positive trends despite the market reopening and upgraded full year expectations. The update was at odds with 888 Holdings (LON:888) on Wednesday who said they had noticed a 20% decline in average daily revenue since the UK reopened retail and leisure venues.

Airlines, including EasyJet (LON:EZJ) and IAG (LON:ICAG) were also some of the better performers after the UK government confirmed that fully vaccinated passengers could avoid having to quarantine upon their return from countries on the ‘amber’ list. The most popular tourist destinations for UK passengers are on the ‘amber’ list, including Spain, France, Italy, and Greece.

In FX markets, the EUR outperformed after the European Central Bank (ECB) announced a conclusion to its Strategy Review. The central bank has adopted a new symmetric 2.0% inflation target over the medium term, versus their previous mandate of keeping inflation at or below 2.0% in the medium term.

GBP was weak against the USD with GBP/USD moving further below 1.3800. EUR/GBP rose above 0.8600 for the first time since 1st July.

Oil prices continued to pullback following the OPEC+ meeting which ended with the UAE blocking a potential deal to boost output, as markets fret about the future of the cartel.

The weekly crude inventory data was delayed until today following the Independence Day holiday in the US on Monday. The EIA said crude stocks fell 6.866 million barrels in the latest week, more than the forecast drawdown of 4.033 million. The larger than expected drawdown supported prices which moved back into positive territory following the release.

Cryptocurrencies were weak amid the broad risk-off tone. Bitcoin fell below key trendline support around $33,000 but continues to trade in the $30,000-$40,000 range.


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FTSE tumbles in global stock rout, Cryptos lower

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