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Code: 47196 Visited: 318 Publish Date: Feb 06 2018 - 1:50
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Stock Market Carnage: FTSE and European Indexes Brace for Big Falls
Tehran, Feb. 06 (SENA) - Stock markets across Europe are bracing themselves for big falls after what was described as “carnage” in indexes across Asia overnight.

Tehran, Feb. 06 (SENA) - Stock markets across Europe are bracing themselves for big falls after what was described as “carnage” in indexes across Asia overnight.

Falls in Japan and Australia were prompted by a plunging markets in the the US – with the Dow Jones on Monday experiencing its greatest one-day points fall in history. TheGaurdian reported.

 “This was volatility unleashed,” said Jack Ablin, chief investment officer at at Cresset Wealth. “It’s partially fear of interest rates, partially this new Fed chairman Jerome Powell, partially the market is overvalued relative to fundamentals.”

While market fear may not be based in any change in economic fundamentals, in its last meeting under chair Yellen, the Federal Reserve indicated it expects inflation pressures to increase through the year.

According to projections released in December, officials expect three rate hikes in 2018 – so long as market conditions remain broadly as they are – but some economists believe the central bank could add another increase at its final meeting of the year.

If the market falls continue they could prove problematic for Donald Trump who has consistently touted record high stock markets as proof that his presidency is boosting the economy.

US stocks have now lost $1tn in value in the first five days of February. However, the White House, responding to the market drop insisted on Monday night that long-term economic fundamentals “remain exceptionally strong”.

Vice President Mike Pence characterised the stock market’s Monday plunge as “simply the ebb and flow of our stock market”.

In London, shares in Britain’s top 100 publicly listed companies on Monday suffered their worst single-day slump since Theresa May called the snap election last April.

The index of Britain’s top 100 companies stretched its longest losing streak since last November into a fifth day, following a 1.3% fall. The FTSE 100 index tumbled to 7,345, having peaked at almost 7,800 last month.

“The era of cheap money is ending, and for markets who got addicted to it, it’s undoubtedly bad news,” said Hussein Sayed, the chief market strategist at currency dealer FXTM.

The Reserve Bank of Australia announced on Tuesday that it would leave interest rates on hold.

 

 

 
By: Security and Exchange News Agency (SENA)
 
 
 
 
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