The UK benchmark index is expected to kick off the last trading week of August in negative territory, extending last week’s hefty losses, with investors taking cues from the US and Asia where stocks tumbled to multi-year lows this morning. The Footsie closed deep in the red on Friday, posting its worst week this year.
CNBC reports that Britain’s blue-chip index is expected to open 236 points lower at 5951. Asian stocks have slumped to multi-year lows this morning, with the Shanghai Composite slumping more than eight percent.
“Markets are panicking. Things are starting look like the Asian financial crisis in the late 1990s,” Takako Masai, the head of research at Shinsei Bank in Tokyo, told Reuters. “Speculators are selling assets that seem the most vulnerable.” US stocks closed lower on Friday, with the Dow Jones and the Nasdaq sliding into correction territory.
At home, the Footsie shed 180.24 points to close 2.83 percent lower at 6,187.65, posting its worst week this year. Precious metals miners Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) outperformed the broader market, with investors turning to safe havens such as gold. Randgold’s share price closed 0.31 percent lower at 4,242.00p, while shares in Fresnillo lost 0.44 percent to close at 681.50p.
“There are many, and legitimate, contributing factors to the global economic slowdown narrative. These include China-related issues, such as the recent devaluation of its currency, the stock market's boom and bust in recent months, and slower GDP growth,” Nigel Green, CEO of deVere Group said, as quoted by Reuters. He, however, added that “for most long-term investors, fears of a near-term financial apocalypse are overdone”.
There are no major macroeconomic releases due out this morning. In the US, Federal Reserve member Dennis Lockhart is scheduled to speak in Berkeley after the London market closes. Bunzl (LON:BNZL) is the only FTSE 100 company scheduled to release results this morning.